By Akpata Alao
The Nigerian National Petroleum Company Limited (NNPCL) on Sunday, September 1, admitted that the debts owed international oil traders are a major factor in the ongoing fuel scarcity across the country.
In a statement released by its spokesperson, Olufemi Soneye, the NNPCL confirmed that the fuel supply disruption was caused by outstanding debt obligations to international oil traders.
Though NNPCL did not reveal the exact amount owed to these oil traders, it is pertinent to state that the national oil company has demonstrated a high level of moral obligation by subscribing to the principle of full disclosure in its dealings with Nigerians. Nothing could be more heartwarming than establishing the fact that Nigerians deserve to know what is going on. And, for this singular act, the management and staff of NNPCL deserves commendation.
Whatever the amount the NNPCL is owing suppliers, whether $6.8 billion as has been speculated in some quarters or less, the point to note is that the company has been finding ways to ensure that petroleum products are made available to Nigerians at all costs. Again, the NNPCL deserves applause for this commitment.
Call it whatever name, subsidy or under recovery or anything, it is now apparent that somebody has been bearing the burnt of the availability of fuel for Nigerians consumption.
Soneye in the statement said: “NNPC Ltd has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers. This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply.
“In line with the Petroleum Industry Act (PIA), NNPC Ltd remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” Soneye said.
What this means in a layman’s language is that the NNPCL may no longer be able to maintain the fixed price of petrol following the removal of the subsidy on May 29, 2023. Besides, the NNPC has indicated that it will or is seeking financial relief from the federal government, hinting that the company might rely on government intervention, though not necessarily a return to subsidy regime, to navigate this financial crisis.
Though the return of subsidy has been a topic of intense speculation in the polity NNPCL has yet to confirm the reintroduction of the subsidy. That the statement clearly hinted that it will rely on the government does not in any way suggest that it is pushing for the reintroduction of the subsidy regime. Yet, it is fully granted that
the federal government may need to step in to help settle some of the company’s obligations to international oil traders.
The direct implications of the recent development is that Nigerians are now face to face with reality. The days of escapism or viewing everything with rose tinted glasses are gone.
For too long many have engaged in fantasy, parading a lifestyle that is clearly unsustainable under present global economic reality. It is time to deal with the hedonistic attitude that prioritizes extravagance above and beyond prudent living.
Here are some ways through which Nigerians can deal with the new reality and cut down on our lifestyle:
Car-pooling: This allows you to share fuel cost with other people who are going in the same direction. It can be a great way to save money, especially if you have a long route to commute and need to take several buses before you get to your destination. With the now obvious increased fuel prices, car-pooling becomes an effective solution to share attendant commuting expenses. Coordinate with friends, neighbours, or colleagues with similar routes and schedules and share the cost. It is also a great way to make new friends or network and strengthen old bonds.
Converting cars and generators to run on auto-gas: With the government’s push for autogas adoption in Nigeria, and has been championed by the NNPCL, converting your vehicles and generators to run on autogas like liquefied petroleum gas (LPG) can be a viable solution. Autogas is more cost-effective than traditional Premium Motor Spirit commonly called petrol and diesel fuels. It is more environmentally friendly.
Many people are simply averse to the use of public transport systems. The simple reason is their personal comfort. The status of being called and addressed as a “Car Owner” and such mundane things. In other climes, the public transport system is more valued that the private/ personal transportation system. It is a very practical and effective way to deal with the fuel price increase. It is an option that saves you a significant amount you would have spent on fuel. Buses, tricycles, commonly known as keke, trains, and other forms of public transport are generally cheaper than individual car usage.
Cutting down on social activities is yet another way to cope. It can be difficult to say no to friends when they invite us out or resist the urge to attend every social activity happening around us, but to adjust to the current reality, it is an unavailable thing to do. Instead, you can plan indoor activities that do not require you to spend on fuel, like reading, baking, cooking with friends, etc or organise meetups closer to home. This will significantly minimise your fuel consumption and save you more money.
Investing in inverters is a great investment, especially in a country like Nigeria, where electricity isn’t reliable, and fuel cost keeps increasing. They allow you to store electricity for a power outage, helping you cope with electricity supply fluctuations, reducing your dependency on generators and saving fuel costs. Although inverters are expensive, they can last up to 15 years.
More important than anything else is the need to adjust your spending. It is important to review and adjust your overall spending to deal with this fuel situation. Identify areas where you can reduce unnecessary expenses and prioritise essential needs. Budgeting and financial planning help individuals navigate challenging economic times like this.
It is something to be worried about if a family of five, sufficiently rich to the point of having five cars to put all the five cars to be on the road everyday. The father, mother, and children going about with each car.
It is arguable that the family has the means and so it could afford to put all the five cars on the road, but we must also see the flip side of the need for the family to demonstrate fiscal and social discipline. To make it convenient for the supplier, there has to be a design that will make for a reduction in the lifestyle that many of us, have chosen over the years.
The reality at hand therefore, calls for a radical review of personal and national lifestyles that will conform to the prevailing global economic situation as the government of the day moves painstakingly to address the harsh economic situation at hand.
*… Alao, a Sociologist and public affairs analyst, writes from Abuja.*