A queue that refuses to go away

The current fuel scarcity has been described as Nigeria’s most severe in recent times with Nigerians paying more than double the approved official price. The crisis is also putting increasing pressure on a stagnating economy that has been hit by slide in global oil prices which in turn created foreign exchange crisis. It is reported that some Depot and Petroleum Products Marketers Association owe international gasoline suppliers $1.2 billion due to insufficient foreign-exchange sales by the Central Bank.

The naira has been pegged at $197-199 since March 2015, causing the rationing of forex. Buhari has since reiterated his stance against calls to devalue the currency arguing it will not benefit ordinary Nigerians.

Recently the NNPC said  that under normal circumstances only 200 trucks of  33,000 litres  is  usually pushed to the market but now it has been  increased to 300 and yet there scarcity persist.

Giving a breakdown of the supply, the NNPC said 1,194 trucks of petrol were loaded nationwide last week Tuesday. Lagos got 467 trucks (15,411,000 litres); Abuja, 141 trucks (4,653,000 litres) and Kano 23 trucks of 759,000 litres. Others were Port Harcourt, 29 trucks (957,000 litres); Kaduna, 36 trucks (1,188,000 litres) while Ebonyi received four trucks of 132,000 litres. However, the queues at the fuel stations have refused to go away.

Despite the promises of the Minister of state for petroleum, Ibe Kachikwu and efforts by the Nigerian National Petroleum Corporation, NNPC, to make available fuel and end the excruciating scarcity currently being experienced across the country, it does appear the strategies are not working because the queues have refused to go at the filling stations and the hiked prices have refused to come down in most parts of the country.

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), Nigeria 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 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 both that petroleum tanker owners refused to lift products to retail outlets because marketers owed them or that marketers had not been paid their subsidy claim by the federal government or that marketers and the government indulged in claims and counter-claims over the payment of billions of naira in subsidy claims.

The underlying factor 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, an equivalent of the out of some independent oil producers in Nigeria but Singapore 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.