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…Various Strategies Suggested to Address Persistent Fuel Shortages
Agnes Ekebuike –
In the midst of the ongoing fuel scarcity, Energy Expert and CEO of Cabtree Limited, Olabode Sowunmi, has provided insights into the complexities behind the issue. According to Sowunmi, the Nigerian National Petroleum Corporation (NNPC) attributes the scarcity to a thunderstorm that has disrupted the transfer of finished products from the mother vessel to the daughter vessel, creating a bottleneck in the supply chain.
Sowunmi explains, “We can only rely on the official information from those managing the supply chain. NNPC has stated that the thunderstorm has affected the ability to transfer the finished product, leading to a hitch in the supply chain. Consequently, independent marketers are unable to obtain the product, resulting in a shortage at depots and ultimately at the consumer level.”
He emphasized the need for redundancy within the supply chain, drawing an analogy to a car’s spare tire: “Redundancy means having alternatives that are not necessarily used but available when needed. This approach ensures that issues within the supply chain, whether at the mother vessel, daughter vessel, depot, or transportation level, do not halt operations.”
Sowunmi pointed out that Nigeria’s refineries have long been non-operational, and the advent of the Dangote refinery has brought a shift in perspectives. He noted, “There’s pressure on the current GCU of NNPC to make local refineries work. Until these refineries are integrated into the supply chain, we will continue to import fuel. The current issue lies in the importation phase.”
Addressing the NNPC’s claims of a 30-day fuel reserve, Sowunmi questioned the sufficiency and management of these reserves, especially with forecasts predicting further thunderstorms. He remarked, “Have we exhausted the 30 days’ reserve? If not, how are we managing it? The meteorological report indicates more thunderstorms, raising concerns about downstream operations.”
Sowunmi also delved into the political dimensions of the issue, highlighting the impact of past government decisions on the current fuel supply and foreign exchange earnings. He stated, “The previous government made forward sales on crude oil, and some loans taken were based on crude we are yet to produce. This significantly affects our current crude sales and forex earnings.”
Looking ahead, Sowunmi suggested that the Dangote refinery, given its strategic importance, should explore drilling its own oil field to sustain its supply chain. He concluded, “To ensure a reliable supply, Dangote should be given an oil field to drill and pump crude for its operations.”
As Nigeria navigates these challenges, the call for strategic planning and redundancy within the supply chain becomes imperative to mitigate future disruptions and ensure a steady supply of fuel to consumers.
