Nigeria’s finance minister, Ngozi Okonjo-Iweala, has blamed the ongoing fuel crisis on “disruption of pipelines and logistical issues”, apparently invalidating earlier reasons given by the government agency responsible for pricing and regulation of petroleum products.
The minister also contradicted the ruling Peoples Democratic Party, which accused the opposition All Progressives Congress of compelling marketers to either divert or refuse to sell petrol to embarrass the government.
At a news briefing Tuesday, Mrs. Okonjo-Iweala strongly denied any link between the scarcity that has left long queues at filling stations across the country, and a failure by the government to pay fuel marketers — a reason given by the Petroleum Products Pricing and Regulatory Agency, PPPRA.
“I want to emphasize that contrary to some unfounded speculations, the queues are not caused by payment issues,” Mrs. Okonjo-Iweala said.
With the scarcity in its seventh day, relevant federal agencies appear either unable to ascertain the actual cause of the crisis yet, or deliberately attempting to distort information released to the public.
Depending on the government organ speaking, the cause of the scarcity has ranged from government’s indebtedness to fuel marketers, pipeline vandalism to sabotage by the opposition APC.
The APC blames the government’s refusal to pay marketers and corruption.
After queues resurfaced last Thursday, the Nigeria National Petroleum Corporation assured the problem will not extend beyond weekend, saying the scarcity was caused by “panic buying”.
On Friday, petroleum marketers announced that the government’s failure to clear subsidy backlog, made worse by the recent devaluation of the naira, was behind the crisis.
By Monday, the PDP accused the opposition APC of sabotaging fuel supply to humiliate the government weeks before national elections.
As with similar allegations in the past, the government has yet to provide any evidence to back that claim or take any action against the opposition party for economic sabotage, which is treasonable.
Instead, by Tuesday, the clearest contradictions from the government emerged.
At a meeting with the Senator Committee on Petroleum, the PPPRA said the scarcity was a result of issues in the sector which led to the devaluation of the naira, and confirmed that the claim of fuel marketers about subsidy backlog was correct.
“What actually complicated it was the devaluation of naira twice,” the agency’s Executive Secretary, Farouk Ahmed, told lawmakers. “The first one that took place on November 28 devalued naira from N155 to N168 to $1 while the second one that took place on February 18 brought the exchange rate to N199 to $1.”
“Marketers were not sure of the actual delivery cost and we had to draw a new template as advised by the CBN. The delay we have now is caused by the November devaluation.”
He assured that there was no cause for alarm as the Ministry of Finance, the PPPRA and other agencies were working to settle outstanding bills.
Again, on Tuesday, the Major Oil Marketers Association of Nigeria, warned that the scarcity would persist until the government facilitates payment subsidy claims.
But in her own response, Mrs. Okonjo-Iweala said the situation was due to a “mix of factors including disruption of pipelines and logistical issues”.
The minister strongly rejected suggestions that the fuel shortage was triggered by payment issues, describing that claim as “unfounded speculations”.
“As you know, we paid the marketers a total of N320.8 billion from the Excess Crude account in two instalments in December last year. This underscores the fact that we are taking payment of marketers very seriously indeed. We’ve been in constant touch and talking with the marketers and a week ago we reached an agreement with them on their core concerns which we have addressed.
Yet, while the minister dismissed the claims made by the PPPRA and oil marketers, she admitted there was an outstanding N185billion yet unpaid, and also agreed the marketers and the government have issues over differentials caused by the devaluation of naira.
Mrs. Okonjo-Iweala said both sides have agreed that marketers be paid not only the costs they incur during importation of fuel, but also “interest and forex differentials”.
To solve the problem, she announced: “DMO has issued SDNs to cover N100 billion out of the N185 billion agreed upon as balance for the next payments. CBN has also given approvals for the banks to issue letters of credit”.
The minister also raised the spectre of partisanship, perhaps in line with the allegation by the PDP, accusing some marketers of refusing to cooperate with the government in ending the crisis.
“It is clear that while the union and most members have been cooperative, some of their members are not. Some of these people have even refused to open LCs to facilitate their payments,” she said. “We salute the union and the members who are working hard to end this unfortunate situation. As for those who are working in the other direction, Nigerians should ask them what their motives are.”
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