PROBLEMS OF INADEQUATE FUEL DISTRIBUTION IN NIGERIA (A CASE STUDY OF ENUGU STATE)

ABSTRACT

          This report on the problems of inadequate fuel Distribution in Nigeria is a critical analysis of the causes of incessant fuel scarcity in Nigeria in recent times.

          The report exposes the negative parts being played and is still playing by some Government Officials, special Task force on Petroleum products Distribution and Black marketers.   The recommendations go a long way to redirect the government or anybody involved in the distribution of fuel in Nigeria.

TABLE OF CONTENTS

CHAPTER ONE:   INTRODUCTION

1.1        General Background to the Study

1.2        Problems Associated with the Study

1.3        Problems that the Study will be Concern with.

1.4        The importance of Studying the Area

1.5        Reference

CHAPTER TWO:   LITERATURE REVIEW

2.1        The origin of the Subject Area

2.2        Schools of Thought Within the Subject Area

2.3        The school of Thought Relevant to the Problem

2.4        Different Methods of Studying the Problem

2.5        Summary

2.6        References

CHAPTER THREE:                  CONCLUSION

3.1        Data Presentation and Analysis of the Data (Highlight of the Study)

3.2        Recommendation

3.3        Conclusions

3.4        Reference

3.5        References

CHAPTER ONE

INTRODUCTION

Crude oil, which when processed fuel is produced. It is one of the natural resources Nigeria is endowed with; Infact, Nigeria is the World’s Sixth Largest producer of crude oil. Before 1990, fuel distribution and management has been smooth and effective before Nigeria started witnessing inadequate fuel distribution.

          In 1996, Crude oil allocation for Local consumption was reduced from 3000,000 to 250,000 barrels per day. The Nigeria National Petroleum Corporation had been supping crude oil for finished products, which was not in the interest of Nigerians.

          By this arrangement between October, 1994 and August, 1996, according to the former Finance minister Mr. Anthony Ani, cost between eight and ten million barrels of crude oil

1.1       GENERAL BACKGROUND TO THE PROBLEM OF INADEQUATE FUEL DISTRIBTION:

The problem of inadequate distribution of fuel in Nigeria and Enugu State in particular can be attributed to so  many reasons ranging from corruption by government officials, bunkering, smuggling bureaucracy and insensitivity of government to the plight of the masses.

The multi-facet problems of fuel shortage in Enugu State became acute daring the petroleum and National Gas senior Staff of Nigeria and National Union of Petroleum and National Union of petroleum and Gas workers. There were cases of unrest due to the fuel crises. The fuel shortage in Enugu then was so serious that the government had to announce from time to time on media houses each petrol station that received allocation from Nigeria National Corporation Depot in an effort to avoid diversion. In the wake of the crises, motorist passed nights queering for the purchase of fuel which are hard to come by.

1.2    PROBLEMS ASSOCIATED WITH INADEQUATE FUEL DISTRIBUTION ON THE SOCIETY.

The problem associated with inadequate fuel distribution are; during fuel scarcity, a lot of hardship is meted to the generality of Nigerians both in the rural and urban areas. People do a long distance

Trekking before getting to their destination which motor vehicles could have done.

A lot of foodstuffs are wasted due to lack of transportation to take them to markets. Motorist as well as cyclists are put of the roads when they can not got fuel and subsequently, loose their jobs. Sometimes, they can run out of patience and decide to take laws into their hands and cause more economic havoc. For instance, recently, members of the Sokoto State chapter of the Nigeria Motorcycle Transports Association went on strike.

The action which almost paralysed the economy of the State was to protest the non- availability of petrol for members of the association to carry out their business.

Inadequate distribution of fuel gives room for hoarding during fuel scarcity; another adverse consequence of illegal sales of fuel is adulteration. Black market fuel sellers have reputation for adulterine their illegal wares with kerosene and Diesel and sell to unsuspecting motorists. The adulterated fuel ends up damaging vehicle engines, even causes accidents and possibly loss of lives.

Another adverse effect of hoarding and smuggling of petroleum products is that many people have become rich through the illicit trade. These people do not contribute anything to the economy and yet live- like kings in the society. Government also loose huge revenue through the activities of these people.

High fuel prices indeed deteriorate economy which are already in the throes of recession and help to increase inflation and unemployment. No matter how short- live fuel scarcity last, the economy generally are certain worse off for example. Transportation fair are doubled and prices of goods and services will thread along the same path. This is already telling on the state of Affairs in Enugu State as long buses popularly called  “Merry- Go- Round” that normally charged N10.00 now charged N20.00 (100%) increase and about to make a mess of the economic gains the populace have enjoyed during this few months of Democratic Rule.

Secondly, inadequate fuel distribution have an effect on investment climate eg.  Ade Holdings Nigeria Limited is one of the business enterprises operating in Enugu metropolis. This company produces Adesheen Hair Relaxer, Hair cream, setting Hair lotion, Body jelly and lotion etc. This oranisation has hundreds of workers (both indigenes and Non indigenes) on their pay roll and uses diesel and electricity as source of power. It is pertinent to consider the fate of these workers and their dependants during these incessant petroleum scarcity experiences in the country. When a manufacturing firm like this organization stops production retrenchment and stood off follows, thereby exposing the laid off workers to temptation and frustration.

The frequent fuel scarcity in the country put us at a disadvantage against foreign business investors, as they may find the business environment very unconducive to operate, thereby making Nigeria loose jobs and better living conditions.

National Electric power authority is one of the indigenous parastals that uses diesel without doubt anytime N.E.P. Sneezes 90% of Nigerians cough. Therefore, anytime there is scarcity of diesel, electricity supply will not be constant and offices like Water Corporation, Hospitals, Television and Radio stations will start to render skeletal services. For sure water borne diseases will rear their ugly heads.

 

1.3       PROBLEMS THAT THE STUDY WILL BE CONCERNED WITH

The study will be concerned through so many means like smuggling/oil bunkering:-

This is the earliest danger to adequate fuel distribution in Nigeria, but was not given appropriate attention. The menace of illegal bunkers and barrens were made known in 1989. They operate in a mafia style like drug barrons. Their mission leads Nigeria oil illegal to Neighboring countries thereby causing fuel scarcity. In Nigeria, fuel smuggling is a thriving business in all boarder states of the federation. Many dubious Nigerian businessmen smuggle fuel to Niger Republic.

A litre of kerosene which should normally sell for N17 at the filling stations is sold at N32 at some filling stations and black marketers sold it at N40.

Furthermore, corruption contributed more on the scarcity of fuel. In Nigeria, corruption have soiled the hands of many business men and government officials. We read from the dailies how Abacha’s reign. The importation of fuel was introduced as a panacea, but instead it aggravated the problem as adulterated fuel was imported which causes a lot of damages to cars. The said full rendered many vehicles useless.

A petrol attendant in Enugu conferred to the researcher, that imported fuel contained toxic which sent some unlucky fuel attendants to the hospital. This act was perpetrated by General Abada while his administration said that it was waving war against indiscipline and corruption (WAI-C) making the abbreviation to look like war Against indiscipline minus corruption. Fuel importation waste hard currency which would have been of course saved or invested in more viable projects.

Vandalisation of pipelines also concerned in inadequate fuel distribution . On Sunday, march 19, 2000, youths in Osisoma Ngwa Local Government of Abia State in their desire to make quick money vandalized Nigeria National Petroleum Corporation oil pipeline to scoop fuel, which later exploded and killed more than 50 persons. The biting fuel scarcity presently particularly.  In Eastern part of the country made the ill fated mission so attractive that any amount of fuel taken to the black market fetches good money for the owner with a liter selling between N50 and N30 instead of the official price of N22.

For years now, the oil pipelines laid by Nigerian National Petroleum Corporation across the country have been targets of vandalization especially in oil-producing areas. In most cases, such tampering with oil pipeline had ended in disasters. The most significant incident occurred at Jesse in Delta State in 1998 and up to 1ooo persons were burnt to death.

In October 1999, the Ijaw Youths in an effort to get their own Republic and has control over the oil in their land, engaged in vanadalisation of NNPC pipelines and destruction of lives and properties which culminate in killing 12 policemen at Odi in Kolokuma/Opekuma Local Government Area of Bayelsa State.

The level of poverty in the society is the factor that proper ordinary villagers to got involved in oil bunkering. Moreover, the craze for wealth is also responsible. We are in a society where everybody is ostentatious vandalisation of pipelines by illegal bunkers in Jesse effects pumping of petroleum from Warri refinery to Enugu Depot.

1.4       THE IMPORTANCE OF STUDYING THE AREA

This report on the problem of inadequate fuel distribution in Nigeria is important to study, since it helps us to know the loopholes behind the problem of the subject matter.

Secondly, it analysis the causes of inassant fuel scarcity in Nigeria in recent times.

Finally, it exposes the negative part being played and is still playing by some government officials especially task force on petroleum products distribution and black marketers. And how government closes their eyes and encourages the booming trade at the time Nigeria economy needed all the foreign exchange it could master to survive.

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