Look at the pictures below. In one you’ll see the line for a gas station: it’s about two or so miles long, and as it gets closer to the station the line doubles. In the other picture, people wait at the station to fill plastic containers. The average waiting time is 3 to 4 hours – and yet this is not an infrequent situation. How can it be so hard to get hold of oil in a country like Nigeria, which is so rich in it?
The answer is not a straightforward one: a number of factors contribute to the situation, including economic and political factors. The price of oil is regulated, and it’s used as a political weapon. That’s why it’s subsidized, and it’s sold at an artificially low price, much lower than in the international markets. To give you an idea, a liter of gas goes for N 97 at the retail station (€ 0.43 or U.S. $ 0.59).
The capacity of local refineries is not enough to supply oil to cover domestic demand, and many are not even fully operational. In addition, the militia control the Delta area, the main oil-producing zone in the country.
Oil marketers have a license to import petroleum products. Obviously, they pay the international price, but then receive a governmental subsidy to sell it at the regulated price. A part of this import, however, is often siphoned off – post subsidy – and sold on the international market at a higher price. In this sense, Lamido Sanusi, governor of the Central Bank of Nigeria, was last month suspended for blowing the whistle on €20bn of diverted oil revenue.
Isn’t it amazing that Nigerians can’t enjoy their own natural resources? I don’t intent to offer a full explanation for why Nigerian queue to get gas but I hope to have provided a feeling for what the situation is like.