The Petroleum and Natural Gas Senior Association of Nigeria (PENGASSAN) has identified weak and outdated distribution chains as a major reason for the persistent fuel scarcity in the country.
Speaking at the 2024 PENGASSAN Energy and Labour Summit in Abuja, the association’s President, Festus Osifo emphasized that the distribution chain in the downstream sector of the oil and gas industry was insufficient to meet the demands of Nigeria’s large population.
Osifo stated, “The distribution chain is weak in the downstream sector of the oil and gas industry. That is why today, you see queues in most of the stations. The problem may be solved today, but it will resurface tomorrow.”
He highlighted that Nigeria relies on a single point of product importation and uses trucks to distribute across the nation, which is outdated and insufficient.
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Additionally, Osifo attributed the insufficient supply of fuel across filling stations to bad roads and flooding, leading to scarcity. He called for urgent reforms to address the challenge and emphasized the need for the government to develop and strengthen the country’s value chain to ensure a more efficient and reliable distribution system.
Osifo warned that without improvements, the country would continue to face recurring fuel shortages.
He also highlighted other challenges in the sector, including high production costs, which are 15% to 20% higher than in other parts of the world. He urged the government to take over security responsibilities from investors to reduce production costs and strengthen laws and sanctions against oil theft.
Osifo advocated for harsher penalties to deter bad behaviors and encourage integrity within the industry.
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