People Groan As Fuel Scarcity Bites Harder
allafrica.com Vanguard (Lagos) February 21, 2003 Posted to the web February 21, 2003 Victor Ahiuma-Young
LONG queues at filing stations, reminiscent of the Abacha era, returned to Lagos metropolis and other parts of the country, yesterday as the current fuel scarcity worsened. The re-emergence of the queues occurred on a day workers of the Department of Petroleum Resources (DPR) suspended their seven-day old strike, while US crude oil prices broke above 37 dollars a barrel for the first time in 29 months with prospect of a war in Iraq influencing fear in world market.
The queues spilled onto highways, causing traffic jams in many parts of the Lagos metropolis. Private car owners and commercial drivers in their hundreds abandoned their businesses to join in the queues with a view to buying fuel. The fuel black market which had practically disappeared is also back, with the operators hawking fuel along highways.
Yesterday, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) directed their striking members in DPR to suspend their seven-day industrial action following a meeting in Abuja with government officials.
General Secretary of PENGASSAN, Mr. Kenneth Narebor, told Vanguard on telephone that the government had now agreed to work with the two unions in the oil industry as well as the National Assembly to ensure speedy passage of the DPR Autonomy Bill, the bone of contention. DPR management and the workers had, Wednesday, in Lagos reached some understanding concerning the welfare of the workers.
"We have concluded the meeting with government officials. The Special Adviser to president Obasanjo on petroleum matters, Dr. Rilwan Lukman, has promised to work with the workers and the National Assembly to ensure speedy passage of the DPR Autonomy Bill. So, DPR workers have agreed to suspend the action. The communique reached has been taken to Dr. Lukman and other government officials. There are other issues in the communique. We shall make it available soon."
Vanguard also gathered yesterday that contractors supplying petroleum products to the country have been putting pressure on government to review the terms of their contracts in line with the rising crude oil prices in the international market. Sources close to the Nigerian National Petroleum Corporation (NNPC) said the contractors had actually reduced the volume of petroleum products they supply to the country in an effort to force government to re-negotiate with them and the reduction in supply is believed to be the cause of the re-emergence of queues at the filling stations in the last few days. The source said, however, that NNPC had so far not yielded to the pressure as that would amount to hiking the pump prices of fuel.
"Since the Venezuela crisis and the Iraq/US face-off started, which has shot up the prices of crude in the international market, the contractors supplying petroleum products to the country have been putting pressure on NNPC to re-negotiate the terms of their contracts in line with the rising crude price in the international market. You know these contractors have a ready market where they can take their products to and make the profit they are after," the source said.
"Ordinarily, the NNPC should not have bothered because a contract is a contract. They have been benefitting from the contract before this time and NNPC did not call for a re-negotiation. But the problem facing NNPC is that most of these contractors were politically appointed, hence the corporation is in a fix. Not until this issue is resolved, this fuel scarcity will persist."
-US oil prices hit fresh 29-month high
However, US crude oil prices broke above 37 dollars a barrel for the first time in 29 months, Wednesday, as the prospect of a war in Iraq instilled fear in world markets. Concern over the possibility of short fuel supplies in the United States also kept prices higher a day before the release of government and private data on US oil stocks. New York's benchmark light sweet crude contract for delivery in March advanced 20 cents to 37.16 dollars a barrel, the highest close since September 2000.
Earlier, London oil prices moved in the opposite direction. Brent North Sea crude oil for April delivery slipped 23 cents to finish at 32.31 dollars per barrel. "We're waiting for tomorrow's data (on oil stocks), said A. G. Edwards analyst Bill O'Grady, forecasting a decline of 1.5 million barrels in crude stocks. Most analysts expected stocks to rise, he said. Trade was volatile, he said. "We chopped around all day."
Analysts in London said prices were propped up by the threat of war despite a British press report that Britain was pressing the United States to give UN weapons inspections more time. "People just don't want to be short of this market ahead of a possible war and tomorrow (Thursday)'s US stocks data," said Prudential Bache oil broker Tony Machacek. The Times newspaper said British Prime Minister Tony Blair was trying to buy weapons inspectors three more weeks before the United Nations was asked to trigger military action against Iraq.
In a front-page report, it said Blair and Jack Straw, the foreign secretary, were suggesting that a crunch meeting of the UN could take place on March 14. But GNI-Man Financial analyst Lawrence Eagles said comments Tuesday by US President George W. Bush indicated that a war was unlikely to be averted for long. "War is my last choice, but the risk of doing nothing is even a worse option," Bush said, adding that while UN backing for a US-led attack on Iraq would be useful it was not necessary. Meanwhile, analysts said, the market eyed developments in Nigeria where junior oil workers joined a three-day-old strike by government inspectors. The country's oil companies said the strike had so far had no impact.