The Economic Effect of Petroleum Scarcity in Nigeria


Shakespeare once said, “When the brains were dead, they would not rise again” this was my unfortunate conclusion when we survived the hardship before the last election 2003. Queuing up for fuel is at best the situation Nigeria , particular are passing through , virtually everyday of their lives. This so called scarcity has brought in it’s wake untold hardship to every students in Enugu , campus ii & iii N20 but formally it was N10 because fuel scarcity increase it to that which many students can no longer come to school five times a week.

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The World Bank And The United Nations Development Program, UNDP in a joint study of Nigeria Energy sector in 1992 trace the root cause of crises in the energy sector to government.

Mr. Philip asiodu [1994] called for public interest and participation in formulation of policies that affect petroleum industry.   Well much as this work is concerned lets look into the following.


The virus of petroleum shortage first afflicted this country not long after general Yakubu Gowon, the then head of state , declared 1976 unrealistic for a return to civilian ruler this roadside. No one was   Mohammed his suc incipient disruption of fuel supply and distribution because paralyzing worse in the twilight of his administration in 1975. remember headline screaming ‘ No fuel, no diesel oil, no food’ .

After Gowon fell , general Murtala successor , tackled the disruption to fuel supply with his characteristic decision. He outlawed sale of fuel in surface tank by the  roadside. No one was to be seen carrying fuel in jerry-canes. Penalties for infraction were made stiff.

There was no incidence of fuel shortages during general Obasanjo’s administration. Although he was a continuation of Murtala Mohammed’s but his style differed. I cannot also remember an occasion of fuel scarcity in Alhaji’s Shehu Shagari’s administration despite the manifest weakness and irresponsibility of that administration .

Fuel shortage became a common experience in general Babangida’s time. Such was the situation than an unsteady and inadequate supply of petroleum products in the country has become the rule rather than exception for about three years. The situation lingered during the short life of Ernest shonekari’s

Interim National government.

Some facts have emerged from the petroleum crisis. The first major cause of petroleum scarcity is the large scale smuggling across our borders, and diversion of supply to hidden dumps where 50 liters cost between N1,000 and N3,000. A senior official of NNPC asserts that the quantity of petroleum products available would have been enough for normal consumption  in this country but for the diversion to neighboring countries and to illegal dumps in the bush.

Secondly the refineries have not received adequate attention and have consequently not function to their utmost. The third one might be traced to the strike action by NNPC especially NUPENG and PEGASON. It could be argued that since the days of Gowon , the energy needs of the country have more than doubled , more especially so in the cater part of general Banbagida’s administration. The internal market has become so large and complex today that even if we were to discountenanced political undertones being allested in official quarters, an efficient and adequate generation, supply and distribution of fuel at this point in time in Nigeria would have been an uphill task. It is clear by now that putting all the fuel eggs of the nation in NNPC basket is dangerously combustible, and it require a cigarette and to ignite a conflagration. If the right options are not chosen now, the fuel crisis will certainly get worse in the future.

Most recently was the one of yesterday 20th June 2003 fuel price increased from N 20 to N40, kerosene to N 38.after obasanjo or Atiku reelection as president.  The last scarcity was as a result the price of transport. The present government in no doubt  is very ignorant of her aim of ruling. This is a government that cares only for his personal interest.

The national labour congress will soon go no strike, which will again affect the economic growth of this country. It is obvious that petroleum can never be count out in any economic sector in Nigeria. So the shortage and price increase should be checked or we all will be doomed.



Petroleum scarcity could be traced as earlier mentioned to general Yakubu Gowon the then head of state .

Based on the causes of fuel scarcity the first cause is the bad state of our refineries. The government has always told us that our refineries are bad, therefore we cannot complete the precession of the product. In a situation were oil is imported to a big country like Nigeria there is expectation of petroleum shortage. A question on the state of our four refineries , was asked Mr. Gaius  Obaseki claimed the refineries were working and that his organization was on top of the situation.

Then the main causes of petroleum scarcity could be traced to -:

i ) sabotage among the marketers

  1. ii) Importation of the products

iii) Heading and personal interest.

  1. iv) Strike by the department of petroleum resource.

Prof. Jerry Gana, government spokesman blamed the shortage on sabotage. [Taking from daily champion Thursdays, march 20, 2003 page 33]. The NLC said it had all along suspected “foul play” in the manner the ongoing fuel scarcity was being handled by the NNPC.

The NNPC on the other hand has accused the marketers of sabotaging government efforts at making fuel available to the people by heading their products. Mr. Gaius Obaseki at the meeting with a marketers threatened to revoke the licenses of the oil companies. The NNPC despite their treat accepted a new price increase by the marketers.

Importation of the product has created a lot of agents in the field thereby causing problems in the oil market.

As alhaji saka Olagbeji secretary general of tanker drivers association, NNPC depot, Ejigbo branch explained, on a normal situation , 150 trucks are leaded daily against the 20 that get to the consignment presently .[daily champion ] this has shown the personal interest which we are suffering in oil sector.

The strike of the department of petroleum resources created panic all over the country and we were all affected by their strike leading to petroleum scarcity.



Smuggling of petroleum products across our borders has been identified as one of the major causes of petroleum products shortage. According to an NNPC source, a minimum of 60,000 barrels per day of crude oil in products is lost to smuggling .

The immediate implication of the foregoing ia that for every three liters of petroleum products made available in Nigeria , one is taken out leaving only two for us to use. This is why there is an ever present scarcity of petroleum products especially fuel in Nigeria .

The methods used by smuggling to smuggle petroleum across the border are determined by the locations. some of the popular methods are .-:

A .TANKERS : this is used only by big time smugglers , large tankers are filled with petrol and these go further than the neighboring countries , the tankers pass through the border on designated days, usually once in three or four weeks. Recently about 150 tankers carrying petroleum products to depot only 22 tankers was seen according to the secretary to tankers driver Alhaji Saka .

  1. JUMBO TANKS: These are very common in some area , motorcycle tanks are detached and expanded by welding another tank with a flat top to the original. The flat of the new one serves as the seat. In the Northern part of the country, trailer drivers have specially built jumbo tanks between the drivers cabin and the main body of the vehicle. The extra tank can take about across the border.
  2. BALLOWING: Young boys , girls, men and women at the same border sling five to six yellow and bleu jerry cans of various sizes across their shoulders. From a distance the bobbing cans look like large balloons. These are carried to the Nigeria side, empty through various routes the cans are filled with petrol and taken back to side one at a time .
  3. BASIN METHOD: This method of smuggling is used mainly on market days by women and young girls who go in groups to the market across the border. Toward evening and on their way back, the fill 50 liters cans with petrol. Put them in their basins and support them on both sides with packets of detergent, milk and other goods. These are then covered with shawl or wrapper for the trip home.

E . FREELANCING METHOD: commercial vehicle drivers carry jerry cans in their boots and if stopped by any official they simply ‘recognize’ bribe the official and convey their cargo to the border where they sell to agents. It is quite amazing to note that uninformed men and women assist these smugglers to ferry things  across the border for a fee.

Also , fishermen in the coastal  areas of Akwa ibom and cross river have developed a unique method of ferrying petroleum products through the town of Ikang in cross river into Cameroon. They skillfully place plastic containers of petrol at the bottom of their boats and cover them up with fishing nets, these motor-car , motorcycle, bicycle, canoe, donkey and foot smugglers , however , are all smalltime operators, in both the Northern and the southern borders areas, the big names in petroleum smuggling use tankers.  There  are reports that motorists in some part of Kano go to the Niger Republic to buy fuel which was smuggled there from Nigeria. Apart from the hardship of beings to petroleum users in Nigeria , the nations economy loses a lot. About $1billion is lost annual through smuggling.

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