Recurring fuel scarcity
The recurring fuel scarcity in Nigeria remains a paradox. Nigeria’s crude oil reserve is estimated at over 35 billion barrels with production output hovering above 2 million barrels per day. The country is a member of the Organisation of Petroleum Exporting Countries (OPEC) and is ranked as Africa’s largest producer of oil and the 12th largest producer of crude oil in the world. Nigeria also has four refineries with nameplate capacity of 445,000 barrels per day. However, despite the huge hydrocarbon resources, the country has continued to witness frequent fuel scarcity. There is hardly any year that the country does not witness acute fuel shortage.
Officially, there has been myriad of reasons to explain the scarcity. It is either that petroleum tanker owners refused to lift products to retail outlets because marketers owed them or that marketers had not been paid their subsidy claims by the federal government. Sometimes, it is alleged that marketers and the government indulged in claims and counter-claims over the payment of billions of naira in subsidy claims. The reason being adduced for the present fuel scarcity is that oil marketers are finding it difficult to source for dollars to finance importation of petroleum products as the Central Bank of Nigeria cannot guarantee all the dollar demand to be used for importation by the marketers, hence most of them rely on allocations from NNPC which is currently the main importer of fuel. The underlying factor, however, is the inability of the country to refine its abundant crude oil into petroleum products for its citizens.
The frequent fuel scarcity being witnessed in the country imposed unnecessary suffering on Nigerians. The Nigerian Labour Congress (NLC) has taken a swipe at the federal government over the lingering fuel scarcity in the country warning that should the scarcity persists, it would be left with no other option than to ask workers to stay at home until government makes fuel available. The NLC through its president, Comrade Ayuba Wabba, in a statement also said the current scarcity was an attempt by invisible hands to hoodwink Nigerians into accepting the privatisation of the nation’s refineries.
Nigeria, with its exalted profile in crude oil production, is probably the only major oil producer worldwide with scant refining capacity. Ironically, some countries with little or no oil endowment boast of many state-of-the-art refineries.
Singapore, according to the World Fact book, produces about 20,170 barrels of crude oil per day and is dubbed “the undisputed oil hub in Asia”, with the country’s oil industry responsible for five percent of the country’s gross domestic product (GDP). Singapore can currently store around 11 million cubic meters of chemicals, oil and liquid fuels like gasoline and diesel in its tank farms. That is equivalent to around 68 million barrels of oil.
Until Nigeria’s refining capacity is increased tremendously, there will be no end to the recurring fuel scarcity. The current scarcity in the country should serve as a wake-up call both for the government and investors in the oil industry. Nigeria needs a policy that supports local refining and deregulation which will build investors’ confidence for new refinery projects in the country. The vision for government should not stop at ensuring adequate supply of petroleum products for its citizens but also turning Nigeria into a hub that will impact positively on the country’s GDP.