Fuel Scarcity, Income Ruin, And The Way Forward

Fuel Scarcity, Income Ruin, And The Way Forward
April 05 17:53 2016

By PROF. ANDREW EFEMINI

Fuel scarcity is one of the permanent features of economic and social reality in Nigeria in the last 40yrs or there about. Why do we have scarcity of fuel or better put petroleum products? The following reasons can be identified:

1. Insufficient refining capacity or non existent refining capacity.

2. Uncountable stories about turn around maintenance of existing ‘refineries’ or ‘moribund’ refineries. We have used
these expressions because of the failure upon failure of the turn around maintenance of the refineries.

3. The most poorly coordinated fuel importation program in history.

4. Which country or countries are we importing from and what is the cost of fuel in those countries? Why don’t we
import from Venezuela where prizes are very low.

5. Trillions of wasted funds called subsidies. Too high a prize for petroleum products even with the propaganda of
subsidiaries by government and their apologists.

6. We have heard of licenses being issued to investors…. investors indeed.

7. We have heard that a Nigerian has promised to end fuel importation once he completes building his refinery.
It is obvious that availability and prize of petroleum products is a very major reason for the deepening poverty in
Nigeria. Skyrocketing prices and ruin of workers income is summary of the evil consequences of the problem.

SOLUTION

1. Nigerians should be told the prize of building or constructing different types of refinery; from modular to giant refineries.

2. We should determine how many refineries we need to meet domestic need and also for export.

3. Nigeria must seek for technical partners with whom we can do joint venture business in this sector.

4. Technical partners like Shell, Chevron, etc. With watertight agreements that once and for all ends the problem of fuel scarcity.

5. Funding of the projects can come in any of the following:

a. Investment by workers through their pension funds backed by government bond.

b. Mobilization of workers to voluntarily invest from their wages again on government guarantee on investment.

c. Since refineries have a 100% guarantee on investment, I recommend that we borrow whatever it will take to fund the joint venture agreements.

Clearly President Buhari has an opportunity to put the fuel scarcity behind us. Whatever temporary measures we are
adopting should not exceed the end of his tenure. If by 2019 fuel scarcity is not permanently dealt with APC should
consider itself a failure because my suggestions if carefully implemented will solve the problem.

NB: I refused to mention the mafia operating in that sector.

That is for another day.

Andrew Efemini is Professor of Philosophy of Development at the University of Port Harcourt, now on sabbatical at Kogi State University, Anyigba.