Fuel scarcity: Field of gallons and curse of ‘Black Gold’
IF you type ‘fuel scarcity’ on the Google search app or website, the first seven pages will give you uninterrupted results of Nigeria and its series of fuel scarcity events. How could the biggest search engine on the planet not give priority to a country synonymous with recurrent fuel scarcities; not just any country, but the largest oil producing country in Africa?
Just to remind you, Nigeria is the largest oil producing country in Africa and has the second largest amount of proved oil reserves in Africa. With just these two facts, any organised country would never allow the headline ‘fuel scarcity’, to grace even the smallest gossip media outlet in her country. In Nigeria, the shame of having ‘fuel scarcity’ headline almost all local, national and even international media has been substituted with a national norm.
‘Black Gold,’ they call it, one of the greatest grants from Mother Nature. A gift envied by most countries, leaving only imaginations of great economic and infrastructural growth on the minds of countries that lack it. Unfortunately, Nigeria’s ‘Black Gold’ has been demonised by few corrupt beings, making it a periodic plague on Nigerians. Nigerians have not for one day, experienced reasonable joy from their so called ‘Black Gold’. It’s either the prices are high, inflated or that the commodities associated with it are not even available for sale. But what do you expect from a country that cannot refine her oil?
Currently, Nigerians are enduring another scarcity of fuel which is now four months old. The summary of the crisis is that the Federal Government owes oil marketers huge amount of money, crippling the marketers’ financial power to import fuel into the original land of export.
In major cities such as Abuja and Lagos, outrageous long queues at petrol filling stations, black market gallons, stress, heavy traffic jam, hike in transport fares, commodities and services have been the order. Furthermore, with the worsening scarcity, most filling stations engage in sharp practices. In a bid to make huge profits, they sell fuel between N120 and N140 per litre (above the regulated N87 price), while others prefer to sell to black marketers. The shady dealings, in most cases, are accomplished under the dark skies in a bid to escape sanctions from the authorities.
In Abuja, stations sell to the black marketers at between N120 and N140 per litre, with the black marketers reselling same to motorists at between N160 to N250 per litre.
Amidst this evil, the black marketers are the victors. The evil has created a black market fuel job opportunity for unemployed Nigerians who can afford a 10 litre plastic gallon. At any vicinity that has an active fuelling station, there is a small field for oil black marketers and their gallons. Oil black marketers get their products very early from the filling stations and some confess that they even wait for the station gate keepers and help them unlock station gates very early in the morning.
To get fuel, motorists spend up to 12 hours on queues, with some unsuccessfully abandoning their cars at the entrance of the filling stations, over-night, so that they would be in line to get fuel within a reasonable time the following day. To escape such misery, motorists are bound to stop by the field of gallons, or summon the black marketers. From the eyes of the Creator above, petrol stations look like individuals arriving judgment day venue with their cars and several angels with plastic gallons helping them refuel their car.
Nigerians don’t only use fuel for their cars; they also use it to power their homes, places of work and businesses (small and large scale) because of epileptic power supply.
Regrettably, Nigerians might have to endure this man-made ‘Black Gold’ curse longer as oil marketers are said to have stopped importing fuel owing to uncertainty as regards the payment of the remaining subsidy debt they say the government owes them.
The marketers fear that the incoming administration of the no-nonsense President-elect, Muhammadu Buhari, might refuse to pay them the balance.
Here is an independent statistics and analysis from the U.S. Energy Information Administration (EIA):
Nigeria is the largest oil producer in Africa and is among the world’s top five exporters of LNG. Despite the relatively large volumes of oil it produces, Nigeria’s oil production is hampered by instability and supply disruptions, while the natural gas sector is restricted by the lack of infrastructure to monetise natural gas that is currently flared (burned off).
The Petroleum Industry Bill (PIB), which was initially proposed in 2008, is expected to change the organisational structure and fiscal terms governing the oil and natural gas industry if it becomes law. IOCs are concerned that proposed changes to fiscal terms may make some projects commercially unviable, particularly deep water projects that involve greater capital spending.
Nigeria has the second-largest amount of proved crude oil reserves in Africa, but exploration activity has slowed. Rising security problems coupled with regulatory uncertainties have contributed to decreased exploration.
Crude oil production in Nigeria reached its peak of 2.44 million bbl/d in 2005, but it began to decline significantly as violence from militant groups surged, forcing many companies to withdraw staff and shut down production. Oil production recovered somewhat after 2009 but still remains lower than its peak level because of on-going supply disruptions.
The instability in the Niger Delta has resulted in significant amounts of shut-in production at onshore and shallow offshore fields, forcing companies to frequently declare force majeure on oil shipments.
Poorly maintained, aging pipelines and pipeline sabotage from oil theft have caused oil spills. The oil spills have resulted in land, air, and water pollution, severely affecting surrounding villages by decreasing fish stocks and contaminating water supplies and arable land.
Europe is the largest-regional importer of Nigerian crude oil. In 2014, Europe imported slightly more than 900,000 bbl/d of crude oil and condensate from Nigeria, accounting for 45 per cent of exports.
The United States typically imported between 9 per cent and 11 per cent of its crude oil from Nigeria before 2012. However, this share has fallen, and in 2014, U.S. imports of Nigerian crude oil accounted for less than 1 per cent of total U.S. crude oil imports.
Nigeria has a crude oil distillation capacity of 445,000 bbl/d. Despite having a refinery nameplate capacity that exceeds domestic demand, the country must import petroleum because refinery utilisation rates are low.
Nigeria is the largest holder of proved natural gas reserves in Africa and the ninth-largest holder in the world. Nigeria produced 1.35 Tcf of dry natural gas in 2013, ranking among the world’s top 30 largest natural gas producers. Natural gas production is constrained by the lack of infrastructure to monetise natural gas that is currently being flared.
Natural gas flared in Nigeria accounted for 10 per cent of the total amount flared globally in 2011. Gas flaring in Nigeria has decreased in recent years, from 540 Bcf in 2010 to 428 Bcf in 2013. There are a number of recently developed and upcoming natural gas projects that are focused on monetising the natural gas that is currently flared.
Nigeria exported about 800 Bcf of LNG in 2013, accounting for about 7 per cent of globally traded LNG and ranking Nigeria among the world’s top five LNG exporters. Japan is the largest importer of Nigerian LNG and received 23 per cent of the total in 2013.
Nigeria has one of the lowest rates of net electricity generation per capita in the world. Electricity generation falls short of demand, resulting in load shedding, blackouts, and a reliance on private generators.
• Ononye wrote in through firstname.lastname@example.org