The shortage of refining capacity at existing oil refineries is the main driver of Nigeria’s fuel crisis, which hampers the socio-economic development of the country.
It places a high subsidy burden on the government and has long made Nigeria dependent on imported petroleum product
The fuel crisis has also led to the proliferation of artisanal refineries in the oil-producing Niger Delta region, with huge environmental and health challenges.
Comrade Ayuba Wabba, President of the Nigeria Labour Congress (NLC), who made the assertions, said: “the Petroleum Industry Act (PIA) 2021, signed by President Muhammadu Buhari, which aims to pave the way for increased investment in Nigeria’s crude oil refining capacity, is specifically meant to stop the grand danger of outsourcing our energy needs to foreign interests”.
It also seeks to address the grievances of oil-producing communities: unemployment, lack of socio-economic development and environmental pollution.
The Act made a provision for a less cumbersome process for granting operational licenses to investors in the downstream oil operation, which could increase investment interest in modular refineries.
According to Wabba, “It is with great pain, sadness and alarm that the NLC observes the continued acute scarcity of petroleum products at different filling stations in the country.
“The crisis that started with the supply of sub-standard Premium Motor Oil (PMS) has now degenerated into a persisting scarcity of not only PMS but also other petroleum products such as Diesel and Aviation Fuel.
“It is deeply disturbing that motorists, keke operators, bike riders and other users of petrol products now spend incredibly long hours at filling stations before being serviced or sent away empty-handed. This is indeed a daylight premiere of unending episodes of nightmare.
The labour leader said: “Currently, a litre of aviation fuel sells as high as N580 while a litre of diesel goes as high as N670. In many parts of the country, a litre of PMS goes as high as N220.
“The socio-economic strain of both the scarcity and the high cost of petroleum products on ordinary Nigerians and manufacturing firms is best imagined. In many parts of Nigeria, manufacturing has ground to a halt.
“The current haemorrhage induced by the prevailing scarcity of petroleum products has very grave concomitant effects on the already parlous unemployment and security situation in our country.
“At the root of the current pain being faced by millions of Nigerians all over the country is the monstrously defective policy of nearly one hundred percent importation of refined petroleum products”.
He argued that Nigeria is about the only the Organization of the Petroleum Exporting Countries (OPEC) country trapped in the quagmire of complete dependence on foreign refineries for products it has capacity to produce locally.
“This is a most unfortunate commentary on our sovereignty”, he said.
Wabba noted that the NLC has at different fora and through diverse media called the attention of the Federal Government to the grand danger of outsourcing our energy needs to foreign interests.
“We warned of the looming crisis of energy insecurity, adulterated petroleum products, capital flight, decline in productivity, de-investment in the Nigerian economy, massive loss of jobs and upsurge in criminality cum violence all over the country.
“The persisting scarcity of refined petroleum products has unleashed a tsunami of very dire economic realities including exorbitant airfare, cancellation of scheduled flights, destruction of thousands of automobile engines by adulterated fuel and wastage of productive hours. In short, today’s reality screams “Crisis Foretold”.
“As clearly captured in the Nigerian Workers’ Charter of Demands, the only way out of this energy impasse is for the Federal Government to take very seriously the local refining of petroleum in Nigeria.
“We had severally identified the complete rehabilitation of our public refineries and the building of new refineries, both public and private, including modular refineries as the only sustainable panacea out of this national embarrassment and vulnerability in the security of our energy sector”, he said.
According to Wabba, “With the current surge in the price of crude oil, we urge the Federal Government to make judicious use of the bumper harvest of petro-dollars to fix our oil refineries.
“We must re-think Nigeria’s hydrocarbon as a strategic asset for sustainable wealth creation and development. We must now ditch the over-laboured gospel of deregulation which has been proved to be mere moniker for incessant increase in the price of petrol.
“The fact that NNPC cannot keep to its promise of 24-hour supply of petrol in advertised gas stations shows that the petrol importation policy has failed completely. Despite the claims that Diesel and Aviation fuel had been deregulated based on import model, the products are still scarce and expensive proving that deregulation is not the answer to the crisis in our downstream oil sub-sector. Now is the time to go back to the basics. Fix our local Refineries! Build new Refineries!! Local Refining is the answer.”
According to Wabba, “The NLC wishes to reiterate its position as contained in the Nigerian Workers’ Charter of Demands that the government must adopt the policy of local refining and thus must rehabilitate our refineries.
“The Congress and Nigerian workers are in solidarity with the Nigerian people all over the country who have been made to bear the brunt of a crisis that is not their making rather consequent on poor policy choices of successive governments and which has been compounded by inefficient and incompetent management of Nigeria’s oil and gas sector.
“Consequent on the foregoing, the NLC cautions that there is an extent to which the people can endure the current hardship occasioned by the scarcity of refined petroleum products.
“There is a limit the people can stomach prevailing disruptions caused by petrol scarcity especially increased fares and associated dislocations in land, air, rail and water transportation and indeed hiccups in the manufacturing sector all linked to the current scarcity of refined petroleum products in the country.
“This scarcity of refined petroleum products in our country must be treated as a national emergency. A stitch in time might still save nine,” he said.
It would be recalled that the fuel crisis began in early November 2021 when the Nigerian government announced the removal of fuel subsidies with a transportation grant of N5000-a-month to the poorest Nigerians.
Since 04 February 2022, residents in Lagos have reported more-than-usual road traffic driven by fuel scarcity.
The lack of fuel has generated long queues at filling stations across Lagos and other cities including the Federal Capital Territory, Abuja.
According to a report the Nigerian Midstream and Downstream Petroleum Regulatory Authority published earlier this month, the supply of fuel depleted after authorities detected methanol levels higher than the national specifications of 2-3 per cent in recently imported gasoline. 100 million litres of the contaminated fuel were imported and distributed in the last week of January 2022.
Fuel scarcity has caused serious problems for vehicles across the country.
Olumide Adeosun, Chairman of the Major Oil Marketers Association of Nigeria, said that there are 136 reported cases of damaged vehicle engines as a result of the contaminated fuel.
An official of the Nigerian National Petroleum Corporation (NNPC), in February 2022, explained that various agencies were working to ensure that the disruption caused by the substandard petrol will be resolved.
Since then, fuel retailers, whom NNPC have accused of hoarding fuel, have refused to resume normal operations.
This has continued despite the suspension of the subsidy removal plan approved by President Muhammadu Buhari in January 2022.
