5 reasons why we suffer fuel scarcity

Fuel scarcity is one problem that the Nigerian government has not been able to solve and it keeps recurring.

1. Not enough refineries: We don’t have enough refineries in Nigeria to satisfy the nation’s needs and the few we have are not performing optimally. There are four refineries – two in Port Harcourt, one in Kaduna and the other one in Warri. Nigeria’s gasoline consumption is roughly 35-50 million litres per day and the refineries in Nigeria don’t produce up to half of this so the country has to depend on fuel importation despite being one of Africa’s biggest oil exporters.

2. Pipeline vandalism: Pipelines have been repeatedly attacked by vandals and this most of the time affects the supply to consumers. The Nigerian National Petroleum Company said pipeline vandalism was one of its biggest headache in finding a lasting solution to the fuel crisis over the years.

3. Diversion of supplies: A significant volume is being diverted by corrupt officials to neighbouring countries such as Chad and Cameroon. Some marketers have been accused of diverting petrol supplies to areas where it is sold at very high prices. In some instances, they sell off the fuel allocated to them at the depot to independent marketers, who are willing to pay more because they sell above the regulated price.

4. Some people benefit from fuel crisis: Some people are actually making money for scarcity of fuel and they would do whatever it takes to make it continue

5. The wide gap between the official USD exchange rate and the parallel market rate in Nigeria: The CBN dollar rate is N197/USD while the black market rate hovers around N325/USD. Fuel is bought at the international market with US dollars and importers have to source for dollars themselves to buy petrol.