Christmas Celebrations And Petrol Scarcity

Many Nigerians are on long queues across various cities in the country this Christmas morning rather than spending the day at home or at fun places with family and loved ones.

Others are stranded across states and forced to abandon travel plans either, due to no vehicles or their inability to afford the skyrocketed costs of transportation occasioned by petrol scarcity.

For holiday makers travelling by commercial vehicles, the cost of transportation is more than doubled. For those travelling with personal cars, getting petrol is a nightmare. On the average, one has to spend between 4 to 10 hours on queue to purchase the product, depending on the city of residence.

In some cities, motorists keep vigil at filling stations to purchase petrol. The only other alternative is buying from the ‘black market’ where a litre goes for as much as N400 in some States, as against the N145 approved pump price. Filling a tank of 60litres at N400 a litre, would cost N24,000. In a country where minimum wage is N18,000 a month, not many people can afford that.

The spiral effect of this development on the society is huge. It has resulted to increased cost of food items and affected business and social life, resulting to a very low-key yuletide.

As a country we should have no business being in this situation if commitments to ensuring in-country refining had been aggressively followed. But the sad reality despite being Africa’s biggest crude producer, Nigeria exports her crude, and import refined products.

The nation’s four refineries presently operate at an abysmal level of less than 20 percent their installed capacity despite several promises of their Turn Around Maintenance (TAM).
If all four refineries were operating at full capacity, they would produce a combined 19million litres a day. With the estimated daily petrol consumption in Nigeria put at 27milliion litres, that would leave a difference of 8million litres which could easily be augmented through imports.

But with the refineries wasting away, government owned Nigeria National Petroleum Corporation (NNPC), has become the sole importer of petrol since last year when other private marketers stopped importation citing shortage of foreign exchange and increase in crude price which makes it unprofitable to sell at the regulated price of N145 per litre.

To resolve the fundamental issue of petrol scarcity in Nigeria, we urge the federal government to encourage more private sector participation in the downstream sector of the petroleum industry and push back the role of the NNPC. We believe it is an unsustainable model for the NNPC to be both regulator and player across the petroleum industry value chain.

Also, we urge government to commit to the issue of the refineries TAM as part of lasting solution to the perennial fuel scarcity challenge. Similarly, products distribution mechanism should be revisited. The use of trucks is ineffective and open to abuse. Modern technology should be used to ensure pipeline protection to enable the country return to use of pipeline for products distribution.

Will private management of Nigeria's refineries be a success story?

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