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Feature: Oil scarcity persists in Africa's largest oil producer

ABUJA
2016-04-16 17:52

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One thing is common in major cities in Nigeria these days -- long queues for Premium Motor Spirit (PMS) at gas stations, sometimes stretching to two or more kilometers. Fuel scarcity is commonplace in Nigeria, Africa's largest producer of oil, but this latest episode of oil shortage across the country has lingered for about two months without any solution in sight.

Early this month, authorities in the West African country said the long queues at filling stations would disappear by April 7. It is already more than one week after the given deadline, yet the scarcity persists, leaving motorists, who spend long hours on queue for the essential commodity, to groan.

In Abuja, the nation's capital, the situation is worse. Most petrol filling stations are usually jam-packed, even when they are not yet selling the product. It is common to see motorists engage themselves in undignified scrambling for oil till wee hours of the night.

Felix Akolawole, an economic analyst, told Xinhua he once had a terrible experience shuttling between his office and the filling station, all in a bid to fill up the fuel tank of his car. Akolawole said the real solution to the problem was for government to remove the subsidy on oil and ensure that local oil refineries in the country begin to work perfectly.

According to him, the corruption and mismanagement of petroleum funds are responsible for this plight, and it appears obvious that Nigeria cannot afford to continue with the petroleum subsidy. "I hope the government can fully take charge of its responsibilities to construct more oil refineries and make them work to full capacity, to bring an end to this problem," he said.

Despite its crude oil reserves profile, 70 percent of Nigeria's domestic petroleum products demands are met through petroleum importation. This costs the country more than 62 billion U.S. dollars, which is sufficient to meet the initial investment requirement to build four refinery plants, he added.

The analyst called on the government to quickly find lasting solution to the lingering fuel problem in Abuja and other states, so that business operators or government workers could use the productive hours wasted on long queues for the economic development of Nigeria.

In many cities in Nigeria, motorists who can not wait in the relatively long queues at filling stations, resort to buying the product at prohibitive cost from black markets. As the nationwide fuel scarcity lingers on, a liter of petrol now sells for 300 naira or more in most parts of the country, as against the government approved pump prize of 86 naira.

In Lagos, Nigeria's economic hub, many commuters now find it difficult to get commercial vehicles to different destinations, even as some transport operators increased the fares by 100 percent or more.

The city is virtually grounded as only few vehicles now move about, with many passengers stranded at bus stops, while queues of desperate motorists stretched for kilometers at some filling stations. It is the same situation in other cities including Abeokuta, Ibadan, Minna, Maiduguri, Bauchi, Ado Ekiti and Benin City.

Some business operators said the ongoing fuel crisis had become a clog in their regular operations. Sule Abore, a businessman, said the current situation had brought hardships to his family as his business was almost ground to a halt. It is noticeable that most travelers are usually stranded at various motor parks across the country or forced to reschedule their journey due to hike in transit fares.

Nigeria's Oil Minister Ibe Kachikwu, who doubles as the Group Managing Director of the state-run Nigerian National Petroleum Corporation, said the persistent fuel scarcity bedeviling the nation was not limited to arrears of subsidy payments to local oil marketers but further worsened by a huge catalog of issues and problems in the downstream sector.

"We wish to re-assure Nigerians that we are on top of the petroleum products supply and distribution situation, and we remain committed to eliminating this endemic issue once and for all," he said.

Although the minister said the state-run oil firm has so far made progress in nationwide petroleum supply and distribution to all states and ensured product availability, with current supply to states in excess of the normal consumption, Nigerians still wonder how long the acute oil shortage will last.

Kachikwu reiterated the commitment of the national oil firm to eventually end the lingering fuel scarcity in the country, noting the Petroleum Products Pricing Regulatory Agency, a major stakeholder in the regulation of the sector, and the Pipelines and Products Marketing Company (PPMC) had assured that the fuel scarcity problem would soon come to an end in Abuja, Kaduna, Port Harcourt, Lagos, and other cities in the country.

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