Page 5 - DMEA Week 44 2022

DMEA COMMENTARY DMEA

Additionally, he suggested that regional organ- What’s the priority?
isations within Africa such as the Economic According to Kragha’s logic, the best way to fix
Community of West African States (ECOWAS), these problems would be to focus as intently
the South African Development Community as possible on reactivating NNPCL’s four idle
(SADC) and the East Africa Community (EAC) refineries – on making this unutilised capacity
foster the development of regional pipeline net- available once again to bring domestic fuel sup-
works. He described the West African Gas Pipe- ply closer into line with domestic demand. And
line (WAGP) as an example of such a regional since NNPCL is already in the process of repair-
pipeline and contended that regional systems ing and upgrading these plants, this approach
could eventually be linked, thereby facilitating would take the form of accelerating the relevant
trade within Africa. projects.
It’s not clear whether the panellists managed Abdul-Hamid might argue, though, that
to reconcile their competing views during their even the repair of the four idle refineries and the
discussion in Cape Town. Even so, the matter expected completion of the Dangote plant next
deserves further examination – and not just in year might not be enough to hold off shortages
a general sense or with respect to pan-African unless Nigeria also takes steps to ensure that its
energy poverty. fuel distribution systems are efficient and resil-
ient. And he would have a valid point. The West Nigeria’s existing
Meanwhile in Nigeria ... African country’s existing fuel distribution sys-
The question of whether African countries tems leave little room for error and are not good fuel distribution
should emphasise refining capacity or distribu- at responding to unexpected events. systems leave
tion networks is actually playing out in real time Earlier this year, for example, the arrival of
right now in Nigeria. several gasoline cargoes contaminated with little room for
The West African country’s downstream sec- methanol served to upend fuel distribution net-
tor is a muddle. Even though Nigeria is usually works all over the country and triggered wide- error and are
the largest oil producer in sub-Saharan Africa, spread fuel shortages.
it is heavily dependent on imported petroleum And over the last week, the cities of Abuja not good at
products. State-owned Nigerian National Petro- and Lagos, along with surrounding areas, have responding to
leum Co. Ltd (NNPCL) owns four refineries been experiencing severe fuel supply problems
with a combined processing capacity of 450,000 as a result of road damage that arose from the unexpected
bpd, but all four have been completely idle for heavy floods that hit 33 of Nigeria’s 36 states ear-
the last few years and rehabilitation work is lier this month. events
proceeding slowly. Private investors have built In truth, Abdul-Hamid is probably not genu-
a few small modular refineries, and the private- inely truly opposed to the approach favoured by
ly-owned Dangote Group is slated to bring a Kragha. Given that the NPA chief did tout the
massive 650,000-bpd plant on stream next year. PHDA plan, which envisions the construction
However, new construction has encountered of refineries as well as storage depots, he surely
many delays. understands the need for beefing up refining
Meanwhile, fuel shortages are frequent capacity.
occurrences in Nigeria. Deliveries to filling sta- However, he is also correct to note that dis-
tions are often disrupted, and rumours of policy tribution systems play a crucial role in the fuel
changes and possible shortages tend to inspire sector – and that Africa cannot solve its supply
drivers to start queuing up in the hope of buying problems unless it ensures that the sector is
a few more litres before supplies run out. Addi- capable of moving fuel from production sites to
tionally, the federal government spends the customers. Nigeria’s current woes, which arise
equivalent of billions of US dollars each year on from failures in distribution systems as well as
domestic gasoline subsidies that are politically failures in production systems – demonstrate
popular but economically burdensome. that point. ™

Fuel supplies have been short in Abuja and Lagos lately (Photo: Twitter/@NMDPRAtweets)

Week 44 03•November•2022 www. NEWSBASE .com P5