Fuel Shortages in Nigeria: Association President Identifies Causes and Calls for Reforms
Persistent queues at filling stations across Nigeria have sparked concerns about the country’s fuel distribution system. According to Mr Festus Osifo, President of the Petroleum and Natural Gas Senior Association of Nigeria (PENGASSAN), the root cause of the issue lies in weak and outdated distribution chains.
Speaking at the 2024 PENGASSAN Energy and Labour Summit in Abuja, Osifo explained that the distribution chain is inadequate to meet the demands of Nigeria’s large population. “There is no country in the world as big as Nigeria, with our population, that relies on a single point of product importation and uses trucks to distribute across the nation,” he said.
Osifo attributed the insufficient supply of fuel to bad roads and flooding, leading to scarcity. He called for urgent reforms to address the challenge, emphasizing the need for the government to develop and strengthen the country’s value chain to ensure a more efficient and reliable distribution system.
Without improvements, Nigeria would continue to face recurring fuel shortages, Osifo warned. He also highlighted the high cost of local production, which is 15-20 per cent higher than in other parts of the world. The high production cost is partly due to the burden of security in oil and gas companies, Osifo said.
To reduce production costs, Osifo urged the government to take over security responsibilities from investors. He also called for the government to strengthen laws and sanctions against those involved in oil theft, advocating for harsher penalties to deter bad behaviors and encourage integrity within the industry.
As Nigeria seeks to overcome its fuel distribution challenges, the country’s policymakers will need to prioritize the reforms proposed by Osifo. With a large and growing population, it is crucial that Nigeria’s energy sector is optimized to meet the demands of its citizens.
