- Goods worth millions of naira perished – traders
- Nigeria loses about N100 bn to scarcity- Experts
Goods worth about N100 billion have been lost in the last one month, business owners across the country have said.
They attributed the huge losses to scarcity of fuel and other prevailing negative economic conditions.
From February 5, 2016 to end of March 2016, the cost of premium motor spirit, popularly known as Petrol, has increased by 50 per cent in certain parts of the country and about 100 per cent in other parts like Lagos State and environs. While filling stations in Oyo, Ogun, Delta, Enugu and Abuja sell at N100 per litre, some of their counterparts in Lagos sell between N120 and N180 per litre.
OUR GOODS HAVE PERISHED, OUR CHILDREN SENT OUT OF SCHOOL- TRADERS To traders, especially the ones that sell perishables goods, this is their worst year ever. Some of them who spoke with The Point were frustrated over the persistent fuel scarcity as they count their losses.
Chairman, Frozen Foods Dealers Association of Nigeria, Magboro Chapter, Ogun State, Mr. Olushola Oni, disclosed that about 80 per cent of the members had closed shops after they lost goods worth N5 million to lack of power supply, which was as a result of fuel scarcity.
The owner of His Grace Frozen Foods told The Point that some of their children were sent back home from schools because their parents couldn’t pay their fees. Though he agreed that residents of Magboro had not had power supply for four years, he argued that the fuel scarcity had compounded their problems.
Despite the fact that some of them had to increase the price of their goods by 50 per cent, many of them still find it difficult to cope because the demand for the frozen chicken and fish have dropped while the demand for cow skin and beef increased.
“In the past three weeks, we couldn’t even sell anything because we couldn’t see fuel to buy to power our generators. The unfortunate thing is that a lot of them got spoilt and we had to dispose them. I have lost about N500, 000 to the crisis. We appeal to the Federal Government to find a common ground with the marketers and solve the crisis,” he said.
Also, the President, Abuja Chamber of Commerce and Industry, Mr. Tony Ejinkeonye, disclosed that the Micro, Small and Medium-scale Enterprises have lost about N30 billion to the persistent fuel scarcity in the last 30 days.
According to him, the loss, which was as a result of their inability to get petrol to run their companies, has stagnated business across different sectors of the economy. “We have made it clear that the development shows that we are incompetent managers of our resources. Labour productivity is low as employees have stayed off work since the hike of fares by transport providers; and when they come they are always late. These have forced some of our members to close shops,” he said.
SCARCITY WILL CRIPPLE ECONOMY- ECONOMIC EXPERTS Economic experts, who averred that the current scarcity is the worst in the history of the country, warned that unless the Federal Government is proactive in addressing the menace, the manufacturing sector and other services providing firms may lose more than N100 billion, which they lost within one month, if the scarcity persist in April 2016.
They stated that the government’s intervention had become necessary given the fact that the fortune of the economy has been dwindling before the fuel scarcity. The Managing Director, Nesbet Consult, Dr. Alaba Olusemore warned that if the crisis persists, it will eventually cripple the economy because fuel is the major component of production in Nigeria in the absent of regular power supply.
“Scarcity creates a lot of uncertainties in economic activities and the statement of the Petroleum Minister, Mr. Ibe Kachikwu that the scarcity will persists till May means that he is not sure of what will happen in the next one year and this has really caused a lot of panic and may drag the economy in the mud further,” he said.
The economist explained that the scarcity has led to the hike in operative costs of businesses, prices of goods and services. That is not all. He warned that it will lead to inflation and later trigger an increase in both the interest and exchange rates. According to him, these are signs that are not good for the ailing economy as they may scare investors from the market.
Another expert, Senator Kassim Oyofo also gave the FG a knock when he stated that the country is the only member of the Organisation of Petroleum Exporting Countries that still exports crude and is in search of refined products.
According to him, there are more than 50 refined products that can be derived from crude oil and he expect the supposedly ‘change government’ explore these opportunities and sell to neighboring countries and proceeds from such deal will boost the economy to certain level.
“But when we just sell the crude oil and then share the money, we have sold the future of the present and future generations. Right now, the economy is grounded and the government does not know what to do. The issue of subsidy cannot be considered because it bothers on imported petroleum products; knowing the cost of production in terms of refining of crude oil, subsidy is a waste,” he said.
PETROL SUPPLY LACKS CLARITY- INDUSTRY OBSERVERS While economists urged the FG to explore the untapped opportunities in the petroleum sector, industrialists called for the review of the current policy framework of the downstream sector in the oil and gas industry.
The Director General, Lagos Chambers of Commerce and Industry, Mr. Muda Yusuf is bothered about what he described as lack of clarity on deregulation and liberalisation in the sector, which has put many investments in the sector at risk. He explained that the downstream sector suffers from overregulation that has profound negative consequences for growth, investment and job creation in the sector.
The LCCI boss calls on the government to liberalise the downstream sector for unfettered private participation and investment adding that the role of the NNPC has to be defined as it cannot play the role of both an operator and a regulator.
“The roles of the Department of Petroleum Resources and the Petroleum Product Pricing and Regulatory Agency should be defined and devoid of overlapping of responsibilities while the Central Bank of Nigeria should ensure a more transparent process in the allocation of foreign exchange to petroleum products marketers,” he advised.
Also, a petroleum expert, Mr. Martin Onovo attributes the current fuel shortage to wrong leadership. He asserts that what Nigeria needs is a strong Petroleum Product Management System in order to put a halt to the scarcity.
“We need a competent and sincere hands to manage the sector because Nigerians don’t have confidence in the people managing the sector now. They deceived people claiming that the three refineries are working and they are importing,” he said.
According to him, when the leadership is wrong, the country will be faced with several teething problems like fuel scarcity that affects productivity. He said: “Where an individual spends five hours on queue for fuel, it means he has only two to three hours to work and some may not be able to work due to the scarcity. There can be no production in the absence of work and this invariably will lead to a decline in our Gross Domestic Product, which is crucial to the growth of the economy”.
SCARCITY LEADS TO JOB LOSSES- MAN The President, Manufacturers Association of Nigeria, Mr. Frank Udemba describes the scarcity as a hindrance to the economic growth, which the present government is focused on achieving.
He explained that it is important that the scarcity does not exceed this week because it affects company operations such that companies may start to downsize because they have to reduce their working hours. “In as much as I do not want to predict doom but if the scarcity is not tackled on time, there will be unrest in this country because the common man will become agitated,” he said.
IT WILL END IN FEW DAYS – NNPC However, the Nigerian National Petroleum Corporation through its Group General Manager, public affairs division, Mr. Garba Deen Muhammed told The Point that the corporation is on top of the petroleum products supply and distribution situation as it remains committed to eliminating the endemic issue within few days.
Contrary to the allegations of negligence on the part of NNPC, the group’s spokesperson disclosed that the current administration inherited a huge catalog of issues and problems in the downstream sector. Some of them are arrears of subsidy payments to oil marketers, corruption and inefficiencies in the supply and distribution chain and incessant vandalism of pipelines among others.
“So far, we have saved N100 billion from the elimination of subsidy by managing prices at current levels through price modulation. Nationwide petroleum supply and distribution have been ramped up to all states to ensure product availability in the country and monitoring has been intensified to ensure full compliance with approved prices,” he assured.