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Why is Nigeria currently experiencing fuel scarcity?

“If you go to Lagos now, you will see chaotic situations at the depots, people spend 3 days loading a product that is not supposed to…”

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Why is Nigeria currently experiencing fuel scarcity?
  • Why is Nigeria currently experiencing fuel scarcity?
  • Effects of security agencies

Why is Nigeria currently experiencing fuel scarcity? Lagos, Kaduna, and other cities around the country have all reported fuel scarcity during the past week. RNN earlier stated that the harassment of tanker drivers was to blame for Lagos’ fuel shortage. We’ve learned that there are additional reasons why you don’t have fuel at the moment.

According to a recent interview on Channels Television, Zarama Mustapha, the Deputy National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), listed a few causes for the fuel shortage in various areas.

According to him, when the Nigerian National Petroleum Company (NNPC) Limited has imported gasoline into the country, the product is transported by truck from the mother vessel to the depots and then to a variety of retail locations throughout the nation where it is sold to customers.

Due to disagreements between private depot owners and the NNPC, the primary supplier of fuel, there was a delay in the discharge of gasoline from the mother vessel to depots last week. The issues stemmed from private depot owners who collected gasoline at the permitted price per litre but refused to sell it to independent marketers at the price stipulated by the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA).

Petrol is sold at N148 per litre in NNPC depots, but private depot owners sell to IPMAN for N195 to N210. Due to the rising cost of the dollar, owners of private depots are dissatisfied with the price of transportation from the mother vessel to their depots. Owners of private depots purchase their money on the underground market.

Because the NNPC’s storage facilities are insufficient, private depot owners who have the facilities store gasoline as well. There are problems throughout the entire petroleum supply chain, including distribution and refining.

Effects of security agencies

Interacting with security organizations, such as the police and the military, creates a hurdle to the distribution of gasoline, according to Mustapha. He claims that the cops are frequently seen at roadblocks and loading zones around the nation, which has an impact on the chain of the supply of gasoline. He stated:

“If you go to Lagos now, you will see chaotic situations at the depots, people spend 3 days loading a product that is not supposed to take more than 3 hours.”

Mustapha stated his conviction that the NNPC management, governing bodies, and other stakeholders are making every effort to ensure that there will be a plentiful supply of gasoline during this yuletide season, which is still one month away. He was negative, though, about the intermittent gasoline shortage, which he claimed required action from the regulatory organizations, NNPC, and private depot owners.

Mustapha claims that previous administrations did not adequately plan for the country’s population increase and rising need for petroleum supplies. He claimed that the difficulties are too great for one government agency to handle.

READ MORE: FG to remove Fuel subsidy by June 2023 – Finance Minister

Nigeria, according to Mustapha, has to have the ability to refine its own oil. He claims that the combined refining capacity of the refineries in Port Harcourt I and II, Warri, and Kaduna is just 450,000 barrels per day (bpd), much short of the required amount. In order to make up for the capacity differential, the nation will require the Dangote Refinery.

Mustapha also emphasized the need for regulatory bodies to work with private depot owners and the NNPC to determine how to best achieve the best pricing for the average person who is suffering from the shortage and pointed out that IPMAN cannot operate at a loss. The nation also needs to build more storage depots.

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