Fuel scarcity in Nigeria; an OPEC member country.

March 10, 2016, what a day!  Got to the office very late, I think around 9:20am. Am sure you would be wondering why I was so late?, well let me narrate my ordeal to you. I didn’t wake up at the earliest of time, although I consider the time to be quite early. I had my bath, ate something at the express command of my mum, then I was off to work. Normally, public buses pull up just in front of my street, but today was an exception, they were no buses whatsoever. I opted for a bike (Okada), and I was dropped just some few meters away from my house. I still needed to enter at least two buses before getting to the office. I got to the bus-stop, and by the look of things, I was very discouraged. Over 60 people waiting for buses that in this situation were as scarce and precious as diamonds. For the first bus, I stood for almost 30 Minutes.

Then came a bus, 150 Naira was what the driver was yelling for something that is normally 100naira.  Even with a 50% hike in the price, we still fought for seats on the bus. Whoo, at last ”I am making progress” was what I thought to myself. Then came the next bus stop. The number of people waiting for buses there were even higher than before. O my GOD!. Then it dawned on me that there was no way I wouldn’t get to the office late today. A bus came, and the driver yelled 150 naira ni owo moto oo (meaning 150 naira is the money for transport). This was something that is normally 70 Naira from that place. People still fought for space on the bus, but I was too slow and weak ..lol… had to wait for another 20 Minutes after waiting 25 minutes before that first bus showed; making it a total of 45 minutes standing and waiting for bus at the second bus stop. Then another bus came, very big this time around and it was able to carry all the remaining people waiting for bus to go to my destination. The icing on the cake again was that he called 100 naira as the transport fare instead of the previous 150 naira.

So we were off, rode through the very long third mainland bridge. Then there was a decision to make, either continue going straight or turn to the right to pass a place they called surah. At the entrance of surah, there was massive traffic, while the road straight ahead was relatively free. Can you imagine that the driver of that bus opted to pass surah because of his own selfish interest, after we the passengers pleaded with him to just go straight ahead and drop us at a bridge linking to our destination (Obalende).

After like 30 Minutes in the traffic, I had to come down and walk a very long distance before getting to my office. OO God, how as your child suffered today…lol… Now back to the topic for today, the reason for this mess of going to the office late and struggling for bus is because of the ongoing fuel scarcity in Lagos, Nigeria. I was unaware of the struggle people faced the previous day in getting transportation and fuel. The reason was because it was my Cds day and I came back home when most people where at the office, so there was no one to struggle for bus. I later read that motorists spent close to five hours at filling stations queueing for the commodity which was not even forthcoming. It was terrible, you need to see how crowded petrol stations are during this period. News even got to me that instead of selling fuel for 86.50 Naira per litre, petrol stations were selling at between 100 naira to 120 naira per litre.

People have attributed the fuel scarcity to increase in ex-depot price of the product. This served as a dis incentive for marketers to lift fuel because it would be impossible for them to break even at the official price of 86.50NGN. An independent Nigerian marketer, Chief Folorunsho Alake even went as far as commenting that “How can I buy the product from private depot at N95 per litre and be expected to sell at N86:50; it will not be profitable,” he told NAN. He urged the government to ensure that private depots comply with the NNPC template of ex-depot price of N77 per litre; so that independent marketers in Lagos would start loading from the depots.

This means that the reason for the fuel scarcity is as a result of non- compliance by private depots to sell at N77. This may be because of their greed, wanting to make more money at the expense of the poor masses. It is truly sickening that something like this would be happening in a country that produces over 2 million barrels per day of crude oil. The major problem lies in the lack of stable and fully functional refineries. Nigeria as a whole is then left at the mercy of independent marketers which ship processed crude oil in the form of premium motor spirit (PMS), diesel, kerosene and others. They demand exorbitant amounts, and most of the money earned on exporting crude oil is used in servicing domestic demand for a product of crude oil (This is because the Nigerian government partly subsized the price of fuel). Some months ago, there was also fuel scarcity because oil marketers refused to sell to customers. They blamed it on the refusal of the Federal government to pay outstanding subsidy debt to petroleum marketers .

Oil should be cheap in a country like Nigeria. The great nation is already blessed with oil; she is part of the OPEC countries. Apart from that, there is a global supply oil glut, making it the cheapest it has been in many years, with Brent crude just a little above $40 per barrel as at the time of writing (Oil reached a peak of $106 per barrel in 2014). In my opinion, to tackle this problem of intermittent fuel scarcity, we should be servicing our own domestic demand without the need of importing fuel from other countries. It would save money and not leave us at the mercy of the marketers. This would have been possible if Nigeria had a copious amount of functional refineries that refined at commercial quantity.

Update on the fuel scarcity in Nigeria

Recommended Readings 

Robert F Aguilera., The price of oil.

Andrea Roconcoroni, Gianluca Fusai., Mark Cummins., Handbook of multi commodity markets and products