Speaking in Lagos at the town hall meeting hosted by Lai Mohammed, the Minister of Information, Ibe Kachikwu, Minister of State for Petroleum, has appealed to Nigerians not to judge his work by their difficulties in obtaining fuel, adding that the ongoing fuel crisis has persisted mainly because the Nigerian National Petroleum Corporation (NNPC) cannot track fuel trucks.
The minister urged Nigerians to be endure the hardship because his ministry and the NNPC are working hard at solutions even though the situation is blighting.
"Do not judge our work on the basis of the difficulties you have had in fuel supply. I love your patience, I appreciate it; we are working feverishly at solution. We are looking at intelligent solutions," he said.
Kachikwu said fuel trucks are being diverted to other countries rather than points of sale in Nigeria, revealing that no truck in Nigeria has a tracker and the NNPC is at the mercy of the truck drivers. "Over 30 per cent of (fuel) supply is diverted.
"For example, in the last five days, we have pumped 400 trucks of product into Lagos state. The total consumption (in the state) at the maximum is 250 trucks, and most of those trucks are diverted from Lagos to the hinterland of Chad and Cameroon. We need, literally, a whole army to stop this from happening. So I continue to supply and over-supply and so we struggle," he said.
He said Nigerians, therefore, cannot afford to live the work of tackling the fuel scarcity to the government alone, and must take initiative, including repenting from traffic indiscipline, which causes long queues, and also implored Nigerians to report incidents of diversion of fuel.
"We started publishing deliveries and telling you the filling stations they were allocated to, so if you don’t find products in those filling stations, there are hotlines to call and for police to report," he said.
Kachikwu said the NNPC has mostly dealt with the shortfall in supply resulting from debt to marketers; and then foreign exchange scarcity, has, by itself, substantially improved supply of products.
He, however, described this as a short-term solution because the private sector 'needs to drive this business… because ultimately, without doing that, we are never going to find a solution to this problem.'
Kachikwu said the NNPC is currently burdened with the entire work of supply and regulation, and takes all the loss. "That model must change. The private sector will have incentive to drive their business."
Tracing the difficulties in the oil sector to years of systematic enclosure of opportunities and lack of transparency, he said significant gains are now being made. "Contracts are awarded through open bids; monthly transactions are now being published by the NNPC with favourable business policies now in place after a 20-year lull.
"For the first time, average loss position of NNPC, which was about N300bn per month, has been reduced to about N3bn as of January 2016. The Direct Sale Direct Purchase (DSDP), which was the Offshore Processing Arrangement (OPA) which we reviewed, has saved us over $1bn.
"Payment of subsidies, which last year was over N1trn has been reduced to zero – except in April, which was prepared for because of over-recovery. Finally we are focusing on the business – not just bleeding government – and benefitting Nigerian people."
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