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Fuel Scarcity If you are wondering why petrol queues made a return, here’s your answer

The petrol queues are back because Nigeria won’t stop going round in circles.

If you reside in Lagos or Abuja, you’ve probably seen your worst nightmare staring you right in the face all over again. The petrol queues are back with some vengeance like they never really left.

And maybe because they never really left.

The gas stations along the Oshodi-Apapa expressway have been shut to consumers. In Ikeja, only a few petrol stations are dispensing the product. Fat chance if you want to get petrol on the Island right now. For instance, on Awolowo way in Ikoyi, ‘Area Boys’ clutching kegs of adulterated petrol have resurfaced in their bedraggled outfits.

If you are wondering why petrol queues made a return, here's your answer play Petrol queue along the Moboloja Bank Anthony Way, Ikeja Lagos


Respondents have also told Pulse that the petrol queues never really left Abuja. One respondent says the petrol station opposite the NNPC headquarters in Abuja has been engulfed with queues for as long as anyone can remember.

So, what exactly is going on?

There will be no prizes for guessing why the petrol queues made a return; just days after we thought they were gone for good.

The marketers are at it again.

If you’ve been listening carefully enough, the independent marketers have been warning about recurring and intermittent queues at gas stations for as long as there’s that differential between the landing cost of petrol and the pump price of the same product.

The landing cost of petrol was N133.28 per litre in 2016. The landing cost of petrol is now N171 per litre.

If you are wondering why petrol queues made a return, here's your answer Petrol scarcity grips Lagos again

In December 2017, marketers said they were importing petrol for N171/ liter. So, they wondered why anyone would reasonably expect them to sell at the government regulated price of N145 per liter.

During a legislative hearing in the first week of January, minister of state for petroleum resources, Emmanuel Ibe Kachikwu, all but agreed with the marketers.

According to Kachikwu; “The landing cost of the product is about N170 to N171. The price at which we sell today is N145. So, there’s a disparity between N171 and N145. What this means is that those individuals who are really there, not with an obligation like NNPC which has to meet national supply, but with a commercial bend, will not bring in products or they are going to sell at a loss.

If you are wondering why petrol queues made a return, here's your answer play Minister of state for petroleum Kachikwu listens to NNPC GMD Baru



“We need to free the marketers to do their business. To do their business, we need to address the pricing issue.

“One model, for example is, at the time we got the approval of N145, the exchange rate was N285 to $1. Today, it is N305. So, even at the minimum, there’s a gap.

“We are looking at whether, theoretically, you could respect the N145 per litre price and have a plural pricing system, so that NNPC and all its stations and affiliates sell at N145. And at the same time, the private marketers are able to bring in product at their own cost and sell”.

What is happening right now is that the price of crude in the international market has gone up to about $70 per barrel.

Most marketers won’t make a profit if they have to import petrol at N171 per liter and sell at N145 per liter. It’s the fastest way to run them out of business.

If you are wondering why petrol queues made a return, here's your answer play NNPC GMD Baru tries to stop hoarders


Each time the price of crude goes up in the international market, expect petrol queues back home in Nigeria because Africa’s second largest crude oil producer can’t refine its own crude for local consumption.

Only the state run Nigerian National Petroleum Corporation (NNPC) is in all likelihood, catering to the demands of the local market right now. And that isn’t sustainable because NNPC doesn’t have the capacity to supply all the nooks and crannies of Nigeria with petrol even at the best of times. Hence the queues.

What can we do to stop these incessant queues?

Like Kachikwu hinted, our choices are rather grim as a nation and there are:

1. Allow private marketers buy and sell the product as the market dictates. That is called deregulation.

In a deregulated industry, private marketers of petrol who buy at N171 will sell at N175 in order to make a profit and stay in business. Asking them to sell at government pegged price of N145 when they are purchasing for much more will mean asking them to sell at a loss or asking them to stay out of the business; which is what most of them are doing right now in protest.

Osinbajo says govt’s burden is to defend territorial integrity, rights Vice President Yemi Osinbajo dispenses petrol during scarcity period in Lagos (Twitter/Presidency)

2. Nigeria has to begin to refine the crude oil it produces for local consumption. Until this happens, we’ll always be back here.

We have to get our refineries working again. Once we do, no one will talk about forex for petrol and how that is negatively affecting business.

3. There’s a high possibility that marketers are currently diverting the product across the borders because they’ll make better profit margins that way. Petrol sells for $1 (N306) per liter in Niger, Ghana, Cotonou. Marketers would rather take their petrol to those countries than sell the product back in Nigeria for less than a dollar (N145/liter).

Maybe it’s time to better police the borders and ensure no petrol meant for the Nigerian market is seeping out to Cotonou, Niger, Cameroon or Chad.

Until we stop the hoarders dead in their tracks, deregulate the market and refine the petrol we consume, the petrol queues will keep reappearing as soon as they disappear.

And then, you’d have to read this article again.

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