There were suddenly long lines of cars at certain gas stations in Delta State on Monday, as people rushed to buy fuel in a state of panic. This happened because President Bola Tinubu, who was recently inaugurated, announced in his first speech that he would Subsidy Removal. That is to get rid of the controversial oil subsidy.

Subsidy Removal: Queues resurface at fuel stations in Delta

Many people who are demanding the fixing of refineries as a condition for removing subsidies are not taking the issue seriously. What’s more, most of them don’t even have much knowledge about the refineries they are advocating to be fixed. Here are some facts that reasonable Nigerians should take into account.

Reason For Fuel Scarcity in Nigeria  

The combined capacity of the four refineries, if they were running at full capacity, is 445,000 barrels of crude oil per day. The maximum amount of fuel that can be produced is 18 million liters per day. However, it’s common knowledge that no plant operates at maximum capacity all the time. The best refineries can achieve is around 80 percent capacity. Even when the refineries were new, they didn’t reach 80 percent. So, now that they are in a dilapidated state, can we expect them to produce 18 million liters of fuel per day?

The belief that operating our outdated refineries is a good idea is popular among many Nigerians, but it is not a wise one. It’s a foolish idea for several reasons, and I will address three of them here, even though I am repeating myself like a nursery school teacher. Here we go:

First, if you ask any petroleum engineer, they will tell you that the components of our old refineries are no longer manufactured. The cost of operating these outdated facilities is much higher compared to more modern refineries. None of them can operate profitably unless they are completely demolished and rebuilt from scratch. In that case, we would need to build four new refineries instead of relying on the existing ones.

Second, even if we manage to build new refineries, management becomes a crucial issue. Unless we bring in exceptionally competent individuals to run them, they are likely to end up like Nigerian Airways, Ajaokuta Steel, and other government-owned businesses. High production costs, corruption, and numerous fees are some of the reasons why Nigerian products struggle to compete internationally. We should consider whether the refineries will suffer from the same challenges. The fuel produced by our refineries will be the most expensive available.

Third, with domestic fuel consumption now exceeding 60 million liters per day, even if we manage to produce 18 million liters domestically, we will still have a shortfall of 42 million liters per day. Is that a good reason to delay making a tough but necessary decision? Additionally, we shouldn’t rely on Dangote’s refinery for a solution. The fuel produced by that refinery will be sold at the global market price, not at our discretion.

FAQs

How much is Fuel in Delta State?

Currently, the price of fuel in Delta is N600 per litre. However, the price might increase before the end of the day or decrease in a week.

Is there an increase in Fuel prices in Nigeria?

The National Bureau of Statistics (NBS) has said the average retail price of a liter of Petrol increased from N170. 42 in February 2022 to N263. 76 in February 2023. The National Bureau of Statistics (NBS), says the average retail price of a litre of Petrol increased from N170.

What is the price of fuel in Nigeria in June?

According to the report of NBS, the average retail price paid by consumers for premium motor spirit in February was N263. But currently, in June, the price is N500 in fuel stations and while the black market is N600. However, most of the filling stations are locked due to fuel scarcity.

How Much is I Litre of Petrol?

1 liter of petrol in Delta in a filling station is about N500, while the black market price is N600. Though it might increase because lots of fuel stations are closed due to scarcity of fuel.

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