Refined Oil Shortage Continues for Africa's Largest Producer

“We are suffering in the midst of plenty.” That was how Nelson Ilemchi summed up his plight as he spent an entire day queuing to buy kerosene. Since January Nigeria Africa’s largest producer of crude oil has been experiencing a protracted nationwide scarcity of the refined product.

“We produce this thing but we are suffering to get it,” he said as he stood in a long queue at one of the few filling stations in Lagos that actually had stock of kerosene.

Many in the queue arrived at the filling station as early as 4am and by nightfall they were still a long way from the kerosene-dispensing pump. It took so long because there was only one dispensing pump serving about five hundred people who each had numerous jerry cans to fill.

And there is no sign that the scarcity will end anytime soon with government and kerosene sellers, or marketers as they are called here, trading blame for the protracted shortage. The government imports kerosene, while private oil marketing companies sell it to the public. Nigeria is the world’s second-largest exporter of crude oil. According to the Organisation of Petroleum Exporting Countries’ Annual Statistical Bulletin 2010/2011 published in July, Nigeria shipped 2.464 million barrels a day in 2010.

But in spite of its immense oil resources, it imports refined petroleum products like kerosene, gasoline and diesel because the country’s refineries are only able to work at very low capacity. This is because decades of corruption have left most public utilities in a state of disrepair.

Latest figures by the country’s Central Bank Monetary Policy Committee show that Nigeria spent 1.34 billion dollars importing petroleum between January and March 2011.

Nigeria’s Minister of Petroleum Diezani Allison-Madueke told parliament on Jul. 7 that even though Nigeria needs eight million litres of kerosene daily, her ministry is supplying 11 million litres a day in an effort to address the scarcity of the product.

Allison-Madueke, who did not say when the ministry increased the output, said the scarcity persists because the product is being sold elsewhere at higher prices.

“The kerosene is being hoarded and moved illegally into other countries,” she said, adding that some of the product is also being sold to airlines at higher prices.

But president of the Independent Petroleum Marketers Association of Nigeria, Abdulkadir Aminu, said the daily domestic demand for kerosene has grown beyond the eight million litres a day the minister quoted.

“What we are facing now is that supply is not meeting demand,” he said.

Ordinarily there should be kerosene at all petrol stations, but Aminu says this is not the case because kerosene marketers do not have an adequate supply.

The scarcity has led to a thriving underground market where the product is being sold for three times the official price.

The fixed kerosene price is 50 naira (33 cents) per litre. But on the underground market it sells for as much as 300 naira (about 1.98 dollars) per litre.

Nigerians believe that more kerosene is sold underground than on the legal market.

It is ironic that Africa’s top oil producer is experiencing a scarcity of the product. But, in fact, scarcity of petroleum is quite common in Nigeria.

The populace goes through unbearable hardship while the scarcity of any petroleum product persists. Motorists are known to sleep overnight at filling stations as they queue for fuel.

“In an oil-rich country, Nigerians should not suffer to get petroleum products,” Adetokunbo Mumuni from the Socio-Economic Rights and Accountability Project said.

“Under normal circumstances the money used to import petroleum products could be used to manage Nigeria’s three refineries and even build new ones,” he said.

Mumuni, whose organisation seeks to promote transparency and accountability in the public and private sectors, said the refineries are not fully operational due to systemic corruption that has seen much of the country’s infrastructure fall into disrepair.

“This is why an oil-producing country has been reduced to (becoming) an importer of the same product it has in abundance.”

The current kerosene scarcity has affected a large segment of Nigeria’s population because most Nigerians cook with it.

“People find it difficult to eat because there is no kerosene with which to cook,” Umunna James, who also spent the entire day queuing to buy the product, said.

Many Nigerians who cannot stand the pain of queuing endlessly for kerosene, or who are too poor to buy it underground, have to look for other means of cooking.

“Because kerosene is too expensive, the poor cannot afford it. That is why I now use firewood. I don’t know why the country degenerated to this level,” Happiness Udo, a Lagos housewife, said.

“If you go to the filling station you will end up standing there until your legs start aching. As an elderly woman, I cannot stand for too long, that is another reason I chose to start using firewood,” she says.

Many other Nigerians have discarded kerosene for charcoal.

“Charcoal sales have gone up because of (the) kerosene scarcity,” Tola Taiwo, a charcoal seller, said.

She says her sales have gone up by more than a 100 percent.