Nigeria’s Fuel Crisis: Industry Chief Blames Outdated Distribution and Weak Infrastructure
The persistent fuel queues across Nigeria’s filling stations are due to outdated and weak distribution chains within the downstream sector of the oil and gas industry, according to Festus Osifo, President of the Petroleum and Natural Gas Senior Association of Nigeria (PENGASSAN).
Speaking at the 2024 PENGASSAN Energy and Labour Summit in Abuja, Osifo highlighted that the inadequacies in Nigeria’s distribution network are a fundamental cause of the recurring fuel shortages that have plagued the nation.
“The distribution chain is weak in the downstream sector of the oil and gas industry,” Osifo remarked. “That is why today, you see queues in most of the stations. The problem may be solved today, but it will resurface tomorrow. Nigeria’s distribution chain is outdated and insufficient to meet the demands of its large population.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.”
Osifo also pointed out that insufficient fuel supply is exacerbated by poor infrastructure, including bad roads and flooding, which disrupts the distribution of fuel across the country.
In his address, the PENGASSAN president called for urgent reforms to modernise and strengthen Nigeria’s value chain, ensuring a more efficient and reliable distribution system to prevent future fuel crises. Without such improvements, Osifo warned, the country would continue to face recurring fuel shortages.
He further identified high production costs as another challenge facing the sector, noting that local production costs are 15 to 20 per cent higher than in other parts of the world. This disparity, he explained, is partly due to the heavy security burden on oil and gas companies operating in Nigeria.
Osifo urged the government to take over security responsibilities from these investors to significantly reduce production costs. He also called for stronger laws and sanctions against those involved in oil theft, advocating for harsher penalties to deter misconduct and promote integrity within the industry.
As Nigeria grapples with yet another round of fuel shortages, the calls for reform by industry leaders like Osifo highlight the urgent need for comprehensive changes to the nation’s oil and gas sector. The path to stability, they argue, lies in modernising infrastructure, cutting costs, and cracking down on criminal activities that threaten the industry’s future.
