The return of fuel queues in Nigeria.
The recent resurgence of fuel queues in Nigeria, particularly in Abuja and neighboring states, is a stark reminder of the persistent challenges plaguing the country’s petroleum sector. This situation demands critical analysis and highlights several key issues:
- Supply Chain Vulnerability: The revelation by PETROAN’s president that the Nigerian National Petroleum Company Limited (NNPCL) is not supplying fuel exposes the fragility of Nigeria’s fuel supply chain. Despite being an oil-producing nation, Nigeria continues to rely heavily on imports for its refined petroleum products. This dependency creates vulnerabilities to global market fluctuations and logistical challenges.
- Lack of Transparency: The silence from NNPCL’s spokesperson when contacted for comment is troubling. In a time of crisis, clear communication from the national oil company is crucial. This lack of transparency fuels speculation and erodes public trust in the institution responsible for managing the country’s petroleum resources.
- Pricing Conundrum: The inability of marketers to set their own prices due to their dependence on NNPCL for imports highlights the pseudo-monopolistic nature of Nigeria’s fuel market. This situation stifles competition and potentially leads to inefficiencies in the distribution system.
- Subsidy Removal Aftermath: The significant price increase following last year’s subsidy removal (from N238.11 to around N700 per liter) has had a profound impact on Nigerians. With the average price now at N769.62 in May 2024, according to the National Bureau of Statistics, the burden on consumers continues to grow. This raises questions about the effectiveness of the subsidy removal in achieving its intended goals.
- Refining Capacity Gap: The anticipation surrounding the Dangote Refinery’s potential to alleviate fuel scarcity underscores Nigeria’s long-standing refining capacity deficit. However, as pointed out by the PETROAN president, relying on a single private refinery to solve national fuel supply issues is both unrealistic and risky.
- Regulatory Oversight: The current situation calls into question the effectiveness of regulatory bodies in the petroleum sector. There appears to be a lack of proactive measures to prevent such crises and ensure stable fuel supply across the country.
- Economic Ripple Effects: Fuel scarcity and price hikes have far-reaching consequences on Nigeria’s economy. They contribute to inflation, increase transportation costs, and affect the overall cost of living for Nigerians, many of whom are already grappling with economic hardships.
In conclusion, the current fuel crisis is not merely a temporary supply glitch but a symptom of deeper, systemic issues within Nigeria’s petroleum sector. It highlights the urgent need for comprehensive reforms, including:
- Diversification of fuel import sources and improvement of domestic refining capacity
- Enhanced transparency and accountability in the operations of NNPCL
- Development of a more competitive and efficient fuel distribution system
- Strengthening of regulatory oversight to prevent supply disruptions
- Long-term strategic planning to reduce dependency on imported refined products
Until these fundamental issues are addressed, Nigeria is likely to continue experiencing periodic fuel crises, regardless of subsidy policies or the advent of new refineries. The government and relevant stakeholders must take decisive action to overhaul the sector and ensure a stable, efficient, and transparent fuel supply system that serves the interests of all Nigerians.
Reference
‘No petrol supply by NNPCL’ – Marketers explain return of fuel queues in Nigeria published in Daily post By Ogaga Ariemu