Long queues mark oil-rich Nigeria's fuel shortage
Fuel shortage is not a new phenomenon in Nigeria, the world's seventh largest oil exporter, but it still leaves citizens of the West African country baffled. Nigeria produces over 2 million barrels of crude oil per day, but for more than a decade has struggled to supply petrol to its teeming population of 160 million.
Copyright Deutsche Presse-Agentur, 2012
The country's most recent fuel shortage struck in early September and has continued into November, with 1 kilometre-long queues at many fuel stations in the country's capital. "There is just no reason why one should be going through this. It just looks like the government wants us to suffer," said a stalled taxi driver in Abuja. Some drivers in the port city of Lagos have abandoned their cars, impatient to wait for fuel stations to receive their next consignments of petrol.
Lagos, the country's economic nerve centre, as well as other cities, have seen black market prices of petrol reach as high as 250 Nigerian naira (1.60 dollars) per litre instead of the official price of 97 naira (0.62 dollars). People can be seen hawking fuel in jerry cans to motorists. The petrol drought is caused chiefly by a lack of refining capacity, a broken fuel subsidy regime and pipeline vandalism.
Nigeria finds itself in the peculiar position of sending nearly all of its oil to refineries abroad, which it then re-imports, resulting in exorbitant prices to the exchequer. The arrangement is in place because Nigeria's four major refineries can only meet 30 per cent of consumer demand. They have failed to operate at full capacity for several years due to poor maintenance.
"If the country's refineries are in good standard, shortage of petroleum products will reduce," the Nigerian news agency last week quoted Godwin Eruba, chairman of petroleum and gas workers union, as saying. The situation is further complicated by the government's fuel subsidies.
Oil marketers pay for the cost of crude export and refining. In return, the government gives them a subsidy to cover the costs. Without the subsidy, the cost of petrol would be out of reach for many Nigerians. However, marketers have complained that they do not always receive the promised government subsidy, so some have stopped importing the refined petrol. "Some oil marketers refused to import fuel over non-payment of their subsidy claims," said Eruba, contributing to fuel scarcity.
Fuel sellers say that the seemingly arbitrary petrol prices have resulted from the government's inability to provide the product to station owners at regulated prices. The fuel shortages affect not only the individual but the state. Shipping and refining the oil have cost President Goodluck Jonathan's administration more than 10 billion dollars in 2011, and the Nigerian parliament has said the subsidy is also rife with fraud.
Nigerian Finance Minister Ngozi Okonjo-Iweala said the expenses were draining the country's finances. Oil provides more than 90 per cent of foreign exchange earnings of Africa's most populous nation, and about 80 per cent of its budgetary revenues, according to the US government data.
Moreover, pipeline vandalism is a recurring problem in the petrol supply chain. In September, the Petroleum Products Marketing Company closed System 2B, one of its most important petrol delivery networks, after an attack on its engineers doing repair work on pipelines, Nigerian media reported.
The fuel shortages persist at a time when a recent report claimed that Nigeria loses 6 billion dollars annually due to oil theft, with nearly 180,000 barrels believed to be stolen daily. The stolen oil is used by local illegal refineries, which the Stop the Theft campaign says is then sold to international firms at discounted prices and retailed at pumps around the world. The campaign was launched last month by Patrick Dele Cole, international relations adviser to former Nigerian president Olusegun Obasanjo, to draw attention to the scale and consequences of illegal oil theft in the Niger Delta.