Fuel scarcity lingers despite regulators’ assurance of stock

Fuel scarcity continues to plague Lagos and other cities in Nigeria, with petrol prices soaring to as high as 200 Naira per litre, despite assurances from oil marketers and regulators. The Nigerian Upstream Petroleum Regulatory Commission has revealed that approximately 1.2 million barrels of crude oil are consistently shut in by producers in the Niger Delta due to rampant oil theft in the industry. Kola Karim, the Chief Executive Officer of Shoreline Energy, shed light on the situation in a recent interview with CNBC Africa. Karim attributed the disruption in the global supply chain to the challenges in Russia and Ukraine, major suppliers of refined products to Nigeria. He emphasized the critical role of foreign exchange availability in facilitating the importation of petroleum products, noting that Nigeria relies heavily on the state-owned NNPC for fuel supply. Any disruption in NNPC's operations has a ripple effect across the entire value chain. Karim expressed hope that the situation would improve as factors such as access to dollars for product purchase and crude oil swaps stabilize. Karim highlighted the significance of Nigeria's crude oil availability for foreign exchange earnings and the sustainability of NNPC's Direct Sale Direct Purchase (DSDP) programs. He underscored the importance of domestic refining capacity, including the upcoming Dangote Refinery and the refurbishment of Nigerian refineries, in meeting the country's fuel demand and reducing dependence on imports. Despite the challenges posed by oil theft and production disruptions, Karim noted a positive development with new production activities commencing in the western region of the Niger Delta, offering a potential boost to output levels. Regarding the recent dip in production below one million barrels per day, Karim expressed optimism that Nigeria could restore an additional 4,500 to 5,000 barrels per day in the near future, with concerted efforts from all stakeholders. Karim acknowledged the persistent issue of oil theft and corruption in the industry but welcomed recent revelations of illegal pipelines and hidden caches of stolen oil. He viewed these discoveries as a step towards greater transparency and accountability, potentially curbing the illicit activities that hinder Nigeria's oil production and export operations. In conclusion, while challenges persist in Nigeria's energy sector, including fuel scarcity and production disruptions, there are promising signs of progress and efforts to address underlying issues that could lead to a more stable and secure energy landscape in the country.