NORMALLY it should not have taken more than ten minutes to refuel, but I have spent well over four hours without being able to buy even a liter of petrol. There is none. I had been on the queue since about 10 am and now about 2.30pm I could hear the station manager announcing that fuel has finished to the anger, frustration and curses of customers. It is a painful harsh season of fuel scarcity in Abuja the capital city of Nigeria . As one wonders about the fate of other lesser cities, one could see the manager pleading with special customers -those with vouchers as evidence of pre-payment for fuel: ‘sorry, sorry, we don’t have any more and we cannot give what we don’t have’. And that is the point-no fuel in oil –rich Nigeria even as the oil wells have not dried up.
What a country and what an embarrassment? What an irony there is no petrol in a petroleum rich country which started oil production in 1958 at Oloibiri and produces about 2.2 million barrels per day since 2001? What a pity that Nigeria which ranks among the 7 top oil producing countries on earth and the 10th most petroleum rich country in the world has no petrol for local consumption in year 2015?. All you see at the petrol stations are frustrated faces of motorists on endless long queues without hope of relief. What a shame, what a waste of time and even opportunity? What an irony to be hungry and thirsty in a land of plenty of food and water?.
It seems a misnomer of the highest degree to talk of scarcity of fuel in a country such as Nigeria with vast oil wealth. It is a festering sore that reminds us of some past policy mistakes. By some coincidence the FM station was playing that once upon a time hit-song ‘time na money’ and we began to count costs. At individual level I recalled the important appointments missed, the business lost, etc and at the larger society the high rate of absenteeism, high cost of transportation, low business transaction, possible fire –outbreak as result of fuel storage in homes, loss of revenue, etc. How could we be so blessed and yet be so cursed at the same time? Nigeria must be a strange specie indeed –an epitome of Alice in wonderland. Fuel scarcity constitutes a serious set-back to national economy
The bad guys benefit when the system fails to work well. Thus while the Filling stations are dry, the black market is thriving with the sale of the product at exorbitant prices. At the time of writing, it was two hundred naira per liter -over twice the normal. But how could the black market be having products and the official filling stations are lacking or starved? It reflects the contradiction of the Nigerian system including sharp practices of profane society. We have run a crooked system for too long and the oil sector has enjoyed its peculiar portion of the national mess unchecked and unpunished.
There is always problem in trying to identify the cause(s) of the scarcity which had lingered on for over a month now in Abuja and environs with considerable slow-down effect on business and government activities. But largely they betray selfishness and greed of man informed by market values. To some the scarcity is the result of product- hoarding by marketers in anticipation of some increase in the official pump-price of products. It is also said to be a background reaction to the impending removal of fuel subsidy. Part of the official explanation traced the scarcity to failure of the major Oil Marketers to import products as a result of the huge debt –about S185billion owed them by the government, refusal of some Road Transport Unions members to lift oil from depots due to bad roads, etc.
For me the major cause of the fuel scarcity is the resort to importation with its doubtful strings of subsidy and attendant poor management and the failure to enhance domestic refining. It is the clumsiest, poorest and most unproductive method ever . It simply stands logic on its head and should not have been adopted in the first place. A country lifts its crude oil and without adding any value exports it only to import it back in refined form.
Meanwhile there is huge domestic market and high demand for the product at home and the refineries produce only at 30% of installed capacity in Warri and Port Harcourt. Besides only a small fraction of crude oil is allotted to them for refining. Yet the annual growth of demand and consumption is known-about 12.8 %. But as one assessor observed, production has not been planned to meet demand, petroleum products are unavailable to Nigerians and are costly because they are refined abroad and create hardship as a result of scarcity. It is a cumbersome and unrewarding system that should be discarded with for its wastefulness and harmful effect on the economy.
Though the NNPC has assured that it has a stock of fuel that would last for twenty seven days it has not translated to relief. While the government hopes that the part or full-settlement of the oil import bills would ameliorate the pains, the Major Oil Marketers Association of Nigeria ( MOMAN) had hinted darkly of harder days ahead. According to its Executive Secretary Femi Olaware, the stock in Apapa depot could last only for three days after which it would be ‘ difficult to supply fuel to the public once Apapa runs out of the product’. NUPENG, a major player in the oil industry, has said that the settlement of debt would not end the fuel scarcity
From all indications the present system has exhausted itself and showed its unhelpful nature enough. With high import bill to settle, embarrassing debt to pay oil importers and obvious inability or reluctance of the private to be involved in spite of the invitation to private investors since the 1990s, long and distressing queues to manage, all of which have damaging effects on the economy, it is clear that the present approach to oil management in Nigeria has failed. The privatization/Deregulation policy started since the 1980s including the issuance of licenses to investors to participate in the oil sector had failed the economy. The question is why can we not review the policy, get the state to establish new refineries and look for the best hands from across the world to manage them in order to meet at least domestic demands and promote employment. Basically poor management has been the major problem of the sector since the 1970S.
Though the primacy of oil as major generator of revenue –about 70% of export earning cannot be denied, its baneful effect had been observed. For instance to NACCIMA a Professional Association, the oil sector was killing the economy especially agriculture. I agree because in a lecture I delivered in 1982 at the Centre for Development t Swansea UK, I had argued that the advent of oil has been more of a curse than blessing in Nigeria and called for reforms in the Management of the sector. There is no better time than now for such reforms to heal this festering sore called fuel scarcity that makes us look like imbeciles in the eyes of the world.
In the face of dwindling fortunes abroad and acute shortage at home, we must wear our creative thinking cap. Not long ago we supplied 10% of USA imported oil but not so today with its Shale production. India is the leading importer of our light/sweet oil but don’t be deceived that country and indeed other customers could find alternative soon. However, the domestic market remains large and ever-expanding. Something more rewarding and enduring than importation has to be done to meet the huge demand for petroleum products at home.
The state is better suited to act here especially because of the security implication, the band wagon effect of shortage or scarcity on the economy, and the capital intensive nature of a refinery. The last point is important because it helps to explain why licenses issued to private investors have not been utilized by the winners since the 1990s or even earlier. Nigerian investors lack the huge resources required here for investment and as they say ‘you don’t give what you don’t have’.
‘Necessity’ it has been observed ‘is the mother of all inventions’. And we see this in Israel in its ability to turn adversity to gains and success. Writing a foreword to the book Start-up Nations-The Story of Israel’s Economic Miracle by Senor and Singer 2011 Shimon Peres showed how Israelites who ‘returned home to poor land – more desert had to discover the riches of scarcity … to create ourselves anew’ ( with) the only capital at our disposal- human capital’. According to him the effective use of its human capital explains the economic, military, agricultural success of Israel. And that is how ‘Israel- with only 7.1m people no natural resources, enemies on every border, and in a constant state of war produce more start-up companies than Japan, India, Korea, Canada and the United Kingdom’. It is ‘adversity driven culture’ of success.
The current fuel scarcity is a reminder of the inefficacy of the present approach to oil production and management in Nigeria. Certainly the medication on the festering sore is not working to expectation and there is the urgent need for change by exploring other options. It challenges us to be more creative and to embrace creative capitalism not in Bill Gates’ sense of the concept of integrating philanthropy into business using profit and recognition as incentives or what Michael Kinsley 2008 calls ‘doing good into the way big organizations do business to help the poor’. Rather we use the term in the sense of modified state capitalism- using the state to create, produce, and distribute wealth for the progress of society without monopoly or ban against anyone able and willing to do so under impartial rules and regulations.
Here the state either alone or collaboration with investors would run business in the way of private entrepreneurs using the best hands available to set up and manage business organizations in efficient, effective, competitive, ethical manner in an open system that allows anyone who is willing and able- government, NGO, Private sector the opportunity for effective participation to the best of their ability based on best practices including rewarding excellence and punishing indolence through effective consequence management. The present fuel scarcity is also an opportunity to review and change our attitude to illegal refineries that are often destroyed when discovered. Why not experiment with their local technology on a larger scale? We have read of the Biafra success here during the Nigerian civil-war 1967-70. In other words, rather than closing illegal refineries, the state should look into their practice especially the technology for improvement and utilization in the national interest.
