Fuel Scarcity: Nigeria Government Gropes

Nigeria is facing its worst fuel scarcity pains in years even as the president has sent the bill  of marketers to the National Assembly for approval.

The marketers are business people which means that a huge part of the money, 413 billion Naira( approximately,$2b) belongs to banks.



The  problem will not go away even if the money is paid.

Here is why:

Although, Nigeria has the crude, it does not have the capacity to refine it. So the products are refined abroad and imported to Nigeria.
That means, it cost dollars to do this. And they are sold locally for Naira that Nigeria cannot  convert to dollars.
 NNPC used to be able to do this because of the money it earned from crude exports. That strength is gone because of the sustained crash in oil prices.

Yes, some of the importers are very dishonest but the process involves government officials especially, Department of Petroleum Resource, DPR. They take money at the depots in dollars.

Financial insecurity: This government has already( maybe unintentionally) created the impression that it is not business friendly.  It has fights with banks and MTN.  It also operate a novel single account.
Nobody is rushing to invest in "Oil and Gas" as the subsidy business is called.

The Local refineries cannot help because the government is too poor to afford "turn around maintenance".

Mr Kachukwu, deputy oil minister and head of NNPC, has said that government will buy fuel dIrectly. It cannot;  government are notoriously inefficient in business.

As the scarcity bites harder, government is, for the moment, still discussing options.
That is a ghastly gamble.
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