Nigeria: On the deepening fuel crisis

Nigeria is an oil-rich country and yet periodically it faces massive fuel shortages. The inept Nigerian bourgeoisie is incapable even of building the necessary fuel refineries to provide enough fuel for the home market. The reason for this is that it is more profitable to trade in importing refined fuel than to produce it themselves! Here we provide a comment on the situation from a comrade in Nigeria.

“Sitting on his car at the NNPC filling station in Oke Aro area, along Idanre road, the man, who said he had been unable to get fuel for the three consecutive days, ranted: ‘The only thing I am after right now is for Nigerians to die together, everybody at a time. We don’t have leaders, all of them are good for nothing and unfortunate people. They are self-centred and fight only for their pockets. Me, Buhari and every Nigerian just have to die the same day. Not just for us to die one after the other, I mean everybody should die suddenly and the world should come to an end’.” (Read more here)

no fuelThe above quotation gives a precise description of how frustrated an ordinary Nigerian is currently. No power, no regular payment of salary, fuel scarcity and galloping inflation, all combined to make Nigeria hellish for the overwhelming majority of Nigerians.

Why is there scarcity?

Although it is the sixth largest exporter of crude oil, Nigeria is incapable of producing enough refined fuel for her local consumption. Even if the four local refineries operated at their full capacity, which unfortunately has not been the case for about 30 years, there would still be a deficit of about 21million litres to meet local daily needs. The shortfall has to be imported.

While the government through its corporation (NNPC) imports 45%, the so-called “private businesses” import the remaining 55% that supplements this local production. These private investors still depend heavily on the Government  for support in  undertaking this importation. They depend on a “subsidy” from the Government which was recently removed but had to be quickly brought back as the fuel crisis got out of hand.  The private players also depend on the Government to supply the required foreign currencies to carry out these transactions.

With the collapse in Government revenue as a result of the falling price of crude oil on the international market, the  Nigerian Government has been unable to offset the already piled-up subsidy owed, and has also been  finding it very  difficult to meet current demands for dollars needed for this same importation.

Oil provides over 90% of foreign earnings and almost 80% of government revenue. Foreign reserves, which at a point in time (in 2008) were at about $68billion is currently at $27billion, and still declining. This forced the Central Bank of Nigeria to ration the amount of dollars it sells out daily, partly in its so-called defense of the Naira (which in itself  was in a free-fall), and also to prevent emptying the foreign reserves.

It is in response to this state of affairs that these oil importers started holding back from the business. The primary intention of these fat cats is to pressurize the government to pay off all the already owed “subsidy”, and for the government to give them preferential treatment in its sale of foreign currency, so they could buy at the official rate. However, most of these so called “business tycoons” are at the same time currency speculators and big-time gamblers. Lest we forget, many of them are in the list of the Farouk -Lawal oil-subsidy scam. For want of finer words, these are criminals who swindled the country of trillions of Naira in one of the biggest scams in the history of this country.

Very reluctantly, the Government began to make up  for the shortfall in importation. As at January this year, the Government accounted for over 75% of petrol imports, and if we go with the recent disclosure of the  Minister of State for Petroleum, Mr. Ibe Kachikwu, the Government, with its hands behind its back and tears rolling down its cheeks, now imports 100% of the required importation completely leaving out the private importers for the first time in recent years. The Minister felt very sorry about the way things had turned out as regards this.

Need we ask:  how can the Government be so deeply involved in business, when the IMF and World Bank had already thrown them the slogan, “Government has no business doing Business”? For the Nigerian ruling class and their foreign masters, this is really seen as a temporary aberration and every effort must be made as quickly as possible to return back to the previous status quo and allow the big cats to continue milking the sickening cow.

The private investors shrugged their shoulders and say to themselves, “he who laughs last laughs best”. There is a last joker with which to waylay the government, however. After all,  this is not a socialist government that can throw heavy punches at the rich and financial criminals. Here is a government that is part of the establishment and only reluctantly carrying out populist measures because of the fear of rage of the already overburdened masses.

The Government does not have enough depots to offload the imported fuel and it had to beg for the “support and cooperation” of these fat cats to make available their private depots, but at a cost of course. Despite the money paid for the use of these facilities, the fat cats, as could be expected, still prefer making much bigger profits from importation and direct exploitation of the consumers, as the money being made from the use of depots is too meager for these over-pampered “Oil Tycoons”, who would do anything possible, including sabotage, to force the government to surrender its  lion share of importations. Thus, instead of the requested “support and cooperation”, what we get is sabotage and obstacles. The private depots  get the fuel at N77, then sell it at over N100 to independent marketers; they divert fuel meant for one region to another region where the price can be hiked without question. The Government appears helpless and clueless in the face of all this, but its helplessness is because there are millions of cords which tie it with this ruinous gang of the rich and powerful.

Ideological Tie

A Government  which keeps shouting that “Government has no business doing business” believes that it is this same “Private bandits” who will build more refineries to end fuel importation; these same private marauders are supposed to provide the Government-promised millions of jobs. Therefore the government is completely at the mercy of those it claims it is struggling against!

A Government that is genuinely the government of the 99% as against that of the 1% would not hesitate to throw the heaviest punches at these criminals who have been gang-raping this beleaguered society for over five decades.  Such a Government would have  jettisoned long ago the IMF inspired slogan of “Government has no business doing Business” and therefore would proceed with the aggressive building of more refineries and more petrol stations and more depots.

In the immediate, considering the emergency nature of the situation, any depots involved in sabotage would by now have been taken over and the owners arrested for crimes against the people. The already documented cases of financial crimes committed by most of the bandits would have been visited and any necessary punishment meted out to them.

The WayForward:

  • For a complete takeover by the Government of importation, storage and distribution of petrol products to ease the current scarcity;

  • For a total halt to the planned privatization of the refineries;

  • For the arrest and trial of those involved in the treasonable acts of sabotage in the oil industry;

  • For aggressive building of more refineries;

  • For democratic control of NNPC with representatives of workers and other pro-people stakeholders in its management.