A parliamentary committee is investigating fuel shortages in Nigeria. The country is Africa's leading crude oil producer. But he does not have the right to refine his own oil and is obliged to import, and therefore to suffer price fluctuations.
In Nigeria, fuel prices at the pump have been rising for just over a month. What to ask. The lower house of the Nigerian National Assembly has launched an investigation into the matter, because Nigeria is on track, for the year 2022, to become the eleventh world oil producer behind Iran and the leading African producer, far ahead of Angola, Libya and Algeria.
How can a country that produces so much oil be so desperate in the hydrocarbons sector? This is the question to be answered by thea bipartisan parliamentary committee which invited, in turn, oil companies and political leaders to express themselves. And during the hearing of this Wednesday, March 16, the elected officials were able to realize that the situation was very serious.
The Deputy Chairman of the Airlines Organization of Nigeria (AON) and the CEO of the fledgling airline Air Peace, Allen Onyema, have indeed claimed that the AON would certainly have to increase the prices of plane tickets. According to the vice president of the organization, the increase in the prices of fuels for aviation - kerosene, diesel, Jet-A and others - threatens to jeopardize the Nigerian aviation sector.
Why does Nigeria have to import fuels?
“Despite obtaining a controlled price, we were only able to buy the equivalent of three days' worth of fuel. Afterwards, we will have to leave the planes on the ground, ”assured Onyema. Above all, he urges the government to authorize the renegotiation of contracts with importers. A finding that raises another question: why does Nigeria have to import fuel?
As the president of the Major Oil Marketers Association of Nigeria (MOMAN), Olumide Adeosun, indicates before the same commission, "the rise in international oil prices has impacted the supply of fuels". Whether for service stations, for manufacturers or for aircraft operators.
Adeosun deplores the lack of local fuel production, despite the abundance of oil. “In Nigeria, there are modular refineries that could produce diesel and other fuels, but today it is not possible to sell these products in the market because these refineries are not yet certified,” explains- he. Before raising a real problem: "Nigeria is the main producer of crude oil in Africa, but is forced to import almost all of its needs in refined petroleum products from abroad".
Oil refining in Nigeria crippled
Indeed, according to the treaties signed by Nigeria in the industrial sector, in particular after its accession to the International Organization for Standardization (ISO), Abuja does not have the right to sell refined fuels in its own country.
The Swiss NGO, made up of representatives from 167 countries around the world, has however often been reasonable with African countries. Whether it's medicines, food products, metals and other processed minerals, obtaining ISO certifications is generally only a formality, even in oil production.
In production, yes, but not in refinement. However, this poses a real problem: since the adoption in Nigeria of the law on the legalization of artisanal oil extraction last December, the refineries of international companies are no longer sufficient to curb Nigerian crude.
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Total, Eni, Shell, Exxon… there are many Western majors active in Nigeria. But for the past few months, the Nigerian National Petroleum Corporation (NNPC), the state company, has been raiding the assets of these companies, thanks in particular to colossal aid from the state. After buying 87% of Shell's assets last year, NNPC contacted Exxon Mobil to participate in a future sale of the major's Nigerian assets.
However, despite this rapid expansion of the NNPC, which today controls more than 50% of the country's oil installations, as well as the three largest refineries, it has still not obtained an answer from ISO as to refinement license. So much so that the State had to withdraw from the market, in January, the fuels put on sale by the NNPC, because they lacked ISO standardization.
Too much dependence on ISO
Anyway, Adeosun and Onyema have found a compromise with the parliamentary committee, which will be proposed to Muhammadu Buhari, about the fuel price subsidy of more than 20%. They also offer a fixed controlled price of $1,2 per liter of kerosene instead of the current $1,8. But all this will be done to the detriment of the state budget.
Above all, this buffer solution will not be able to end the Nigerian fuel crisis in the long term. Since the Russian-Ukrainian conflict, the prices of imported oil have been steadily rising. If Nigeria fails to refine its own oil or sell its domestic fuels, it will have no choice but to import it at high prices.
Another solution: leave the International Organization for Standardization. A solution already adopted by other African states: Chad, Cameroon, Congo-Brazzaville, Togo, Somalia or even Liberia… These six countries have refused, since 1947, to join the NGO.