Impact of Nigeria’s fuel crisis on the Buhari administration


In recent weeks, Africa’s largest economy and oil producer suffered a crippling fuel scarcity. The realities of the scarcity, becoming clearer each day for the average Nigerian.

At gas stations across Lagos, trails of empty jerry cans, cars and trucks, spilled into the streets. Restless pedestrians converged at fuel pumps in the hope of purchasing petroleum products at the going price.

On the expressway connecting Lagos to neighbouring city, Ibadan, multiple lanes of vehicles stood in line as news of fuel sales reached motorists in Nigeria’s economic hub.

“I have spent a total of 4 hours queuing for fuel,” said Emmanuel Otobor, a taxi driver who was out of business for two days.

“We are hoping that the fuel situation normalises very soon. This has been a very uncomfortable period for the country,” said Tosin Talabi whose Estate experienced power outages for days, due to the lack of diesel.

At the airport, travellers were affected due to delayed and cancelled flights, as airlines were not left out of the inconvenience.

Due to Nigeria’s poor power infrastructure, the country also depends on diesel powered generators for electricity in companies and households. Most Nigerians only experience a few hours of electricity a day.

The fuel shortage had a direct effect on businesses, with a few putting their operations on hold. A shortage of diesel to power cell sites, subsequently having an effect on telecommunication operations. With a similar situation in 2012, Nigerians are no strangers to fuel shortages.

According to the Nigerian National Petroleum Corporation (NNPC), Nigeria produces about 2.5 million barrels of crude oil per day. There is however, a lack of capacity to refine its fuel to meet the demands of its huge population.

The fuel scarcity, caused by a deliberate fuel marketer and distributor boycott, was due to alleged debts owed by the government. As the row over the payment to wholesalers, continues, Nigerians turn their hopes to the incoming administration for solutions.

(READ MORE: Who will make Buhari’s A-Team?)

As Nigerians await the handover to a new democratically elected government, it is the general expectation that the Petroleum Ministry – which plays a dominant role in its economy and accounts for majority of the country’s gross earnings, is monitored keenly.

Great expectation and demands are placed on the President, who has also previously served as chairman of the NNPC, to deliver, in this regard.

(READ MORE: Buhari sworn in as Nigeria’s President

The new Minister of Petroleum Resources will be expected to give the industry an overhaul and see to the passage of a set of proposed laws set to change the face of Nigeria’s oil industry.

The Petroleum Industry Bill, which will aid reforms in the sector for greater efficiency, openness and competition built on corporate governance being one of them. The proposed legislation, which is also designed to strengthen the capacity of indigenous Nigerian companies in the oil and gas sector to compete internationally, will be a top priority in this sector’s reforms process.

(READ MORE: Nigerian oil producers end strike after fuel shortage affects big business)

The new administration under President Muhammadu Buhari has inherited a host of challenges. The price of oil, Nigeria’s main export has fallen drastically since June last year. Secondly, in the north, Islamist militant group Boko Haram has waged a six- year insurgency. Infrastructural bottlenecks resulting in an epileptic power supply, exists. Security power and a stable economy are at the pith of Nigerians’ needs. Appointments in the Oil and Finance Ministries will be looked to as an indication of confidence for the new government.

Although, the All Progressives Congress’s manifesto champions the independence of the central bank, it is hard to ascertain any changes in the Ministry of Finance or Central Bank of Nigeria.

*Abisola Owolawi is a Forbes Africa contributor