Subsidy Scheme, Distribution Mode Reasons for Persistent Fuel Shortage - Expert

An oil and gas expert has revealed that the subsidy regime, opaque distribution method, insecurity, oil theft and distribution point issues are the reasons for the continued fuel shortage in the country. Nigeria.

Gbenga Adeoye, a 2ho oil and gas expert who is also a chartered accountant, said this in a ChannelsTV interview watched by DAILY POST on Saturday.

Adeoye said the Organization of the Petroleum Exporting Countries, OPEC, is also contributing to the challenges facing Nigeria's oil and gas industry.

He says, "OPEC determines the crude oil we export is a problem. I argue that we cannot let OPEC decide what we produce and buy in international and domestic markets. We may have to -be following the path of Gaddafi in Libya.You cannot let OPEC decide how much crude you sell to your people for domestic consumption.The government must calculate the marginal cost by determining the equilibrium price.

"Distribution method, only in Nigeria do you see tanker trucks loaded with fuel moving around the country; Also, the distribution point should be within the six geopolitical zones rather than through a pipeline or a rail connected to these locations,” he said.

He added that "subsidies, insecurity, theft of raw and finished products are part of the fuel shortage problem".

"The main challenge we face in pricing is that we import the finished product; Also, the issue of exporting subsidized petroleum products to neighboring countries," he said.

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For six weeks, major cities in Nigeria including Abuja, Lagos, Ogun, Kwara and other states suffered from fuel shortages.

Recall that at the height of the floods in Kogi State, the federal government blamed the lack of fuel supply on the flooded Lokoja road; however, weeks after the situation subsided, the shortage still persists in Abuja and surrounding areas.