What’s Going On Special: Nigeria is going through its longest petrol scarcity crisis

Getting petrol has been an increasingly stressful hassle in the last several months—and it doesn't look it's getting better soon.

On one side of Lagos Mainland’s Mobolaji Bank Anthony expressway, connecting Maryland to Ikeja, there’s a long row of cars parked on the service lane from just after Onigbongbo bus stop. It’s a hot January 2023 afternoon and this has become a regular sighting for locals familiar with the route. The line-up of cars is a queue towards the TotalEnergies fuelling station along that road, which is usually busy, as it is one of the most trusted fuel stations for motorists and residents around the area, and has now become even more hectic over the last several months.

Ali, a driver on the ride-hailing platform Uber, says he was on the queue into TotalEnergies earlier that day for well over four hours, joining in at past 6AM and finally exiting the fuel station with a full tank of petrol in his car at just past 10:30 AM. “Na here I dey usually get petrol if I’m in this area but I’ve been buying from other places for some months now,” Ali says in partly Pidgin English. “I just decided to join this queue today because I wanted to buy as much petrol as possible and this one dey sell at N200 per litre, and na steal be that one for this situation wey we dey.”

The situation Ali is discussing to is the ongoing, months-long scarcity for Premium Motor Spirit (PMS)—colloquially referred to as petrol or fuel—in Nigeria, dating all the way back to October 2022. Long queues in front of fuelling stations have quickly become the norm in these months; the better the price of petrol at a station, the longer the queue. Those queues then lead into a typically choked up station where there’s minimal number of dispensers selling to customers, adding to the number of hours people wait to get fuel.

Scarcities like this are not uncommon in Nigeria, a crude oil-producing country that imports the overwhelming majority of its refined crude oil products. In fact, these scarcities are a frequent occurrence, happening in stints that often range within a few weeks. This ongoing scarcity that has persisted for over four months now is an anomaly, and is undoubtedly the worst period of petrol scarcity in recent memory.

“I can’t remember it ever being this bad,” Mr. Gboyega, an area manager for a petrol products selling company, tells The NATIVE. “Personally, I knew it was going to be very bad but I thought that things will go back to normal after December, but the worst part is that the solution won’t make it easier on Nigerians.” Mr. Gboyega, who oversees operations across nearly a dozen fuelling station for his company, blames the scarcity on longstanding factors that have existed over time but have never been resolved due to lack of transparency from the involved regulatory bodies and the Nigerian government, the most glaring one being the issue of fuel subsidy.

In the 1970s, the Nigerian government began to subsidise crude oil products due to global inflation that drove up the prices of petrol. The subsidy was comfortably cushioned by the soaring global prices of crude oil due to the oil shock induced by the Arab-Israel conflict. Under the Price Control Act, it was illegal for petrol to be sold above the government’s set price, since it had decided to bear the brunt of offsetting any excess cost. By the early 1980s, though, there were steep declines in oil prices and petrol subsidy became an increasingly cumbersome albatross for successive administrations—military or civilian-led.

Over the past three-plus decades, various federal government administrations have tried to scrap subsidy, mainly because it continues to take larger percentage of revenue, however, those attempts have failed because the removal of subsidy means Nigerians will have to buy petrol at way higher prices. At every mention of petrol subsidy removals, citizens and civil societies have balked, with protests or threats to protest overrunning those government plans. In early 2012, former President Goodluck Jonathan announced the removal of petrol subsidy, effectively raising the per litre pump price of petrol from N65 to N141. His reason was that the removal of petrol subsidy will free up funds for higher socioeconomic infrastructure, including health and education.

The subsidy removal announcement was met with massive discontent and quickly resulted in the Occupy Nigeria protests that halted economic activities throughout the country. Within a few weeks, the planned per litre price was reduced to N97 and decreased even further to N87 towards the 2015 general election that brought in current president Muhammadu Buhari. It is worth noting that, Buhari was one of the more vocal politicians against the increase in petrol price, even stating that subsidy is a fraudulent policy. “Who is subsidising who?” he famously asked while running for president in 2011, stating that he would help decrease the price of petrol when elected into office.

In the near eight years since Buhari’s entrance into office, petrol price has more than doubled. In fact, the official per litre price of petrol was increased to N145 within the first year of his first 4-year term. Since then, petrol price has risen gradually and sometimes sold within an arbitrary range that changes from fuel station to fuel station. In all of this, subsidy remains a contentious issue, with the Buhari-led administration already planning to abolish the policy by the time he exits office in June of this year.

While petrol subsidies are added to the yearly federal budget based on the projected price of crude oil and foreign exchange rates—because the country sells crude and imports petrol in dollars—this year’s petrol subsidy of N3.3 trillion is only meant to last through June. For context, Nigeria spent over N10 trillion on fuel subsidies between 2006 and 2019, but its cost rose by 349.92% in the next three years. In 2019, it was reported the subsidy payments by the government was N350 billion; in the first two months of 2022, that figure was N396.72 billion and it grew into N525.174 billion in August 2022 alone. What’s worse is that the government is borrowing to paying off this subsidy, as confirmed by Minister of Finance Zainab Ahmed.

The increase in subsidy payments is tied to the fluctuating prices of crude oil, the increased price of oil products globally due to the Ukraine-Russia conflict, and Nigeria’s worsened economy over the years that has weakened the Naira against the dollar. Now, with the planned subsidy removal, Nigerians will have to bear the entire cost of petrol, which is currently selling at about N600 per litre on a global scale. To add to that, there will be import duties since Nigeria doesn’t refine its crude oil.

A few weeks back, the Nigerian government announced the official increase of petrol per litre price to N185 from N173, however many Nigerians haven’t noticed since we’ve been buying petrol at higher pump prices for more than six months. These days, the price ranges from one fuel station to the next; two fuel stations on just about opposite sides of the road in the Alimosho axis sell at drastically different prices, one at N330 per litre and the other at N265 per litre—naturally, there’s a longer queue at the latter.

“The price thing is connected to the subsidy issue because no one really knows what will happen by that June they want to remove it,” Mr. Gboyega says. Despite working in the sector for over two decades, he’s as uncertain about the immediate future as he is concerned by the present. “We sell at N255 in some stations and it’s N270 other stations because the prices that the tankers carry petrol is different. Some will tell you they got it at N220, others will tell you something else and we have to adjust by which one goes to which station.”

As we are wont to do, Nigerians are adjusting to the wide range of petrol prices across the country. “I bought it at N310 in one place because there was very little queue and I just needed petrol for generator so I can work in peace,” Adetola, a product designer based in Lagos, tells The NATIVE. Unlike kerosene and diesel, two crude products that have been deregulated from subsidies, the removal of petrol subsidy is a lot more difficult because of its extensive use in everyday Nigerian life. Apart from fuelling private vehicles, petrol prices determine the prices of public transportation and, due to the consistent failing of the Nigerian government to take steps in providing 24-hour electricity, many Nigerian households and businesses rely on generators that run on petrol.

This ongoing scarcity of petrol is affecting lives and livelihoods, with Nigerians spending hours on queues and businesses struggling to run efficiently. “I think they’re just conditioning us for when the price officially becomes like N700 per litre or something ridiculous,” Adetola says. “Obviously we will be angry about it, but with all the shege we’ve already seen. After all, Nigerians adapt to everything,” he goes on to add. “I can’t say it’s not possible,” Mr. Gboyega says about the suggestion that petrol may be sold at over N500 per litre someday soon. “Even we that are in the sector, the situation is too volatile to predict. If they remove that subsidy, it can even be more than that.”