Low-Income Nigerians Turn to Wood and Charcoal as Kerosene Supplies Go Missing

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The fraught situation surrounding Nigeria's chronic fuel scarcity has just been exacerbated by the shutting of five tank farms for violation of environmental laws by the Lagos State Environmental Protection Agency (LASEPA).

Adebola Shabi, the agency's chief executive officer, said that the tank farms had been built without the submission of an environmental assessment report and the submission of appropriate contingency plans. The tank farm facilities will remain shut until they satisfactorily meet the compliance status.

The operators--Bovas Petroleum; Swift Oil, Fatgbems Petroleum, Index Oil and Gas and Techno Oil--also must pay penalties of $32.5 million to the agency.

As the world's sixth-largest exporter of crude oil, shipping 2.46 million barrels a day in 2010, according to OPEC, the country imported $1.34 billion of petroleum between January and March this year.

Kerosene is the petroleum product most essential to the population for cooking. In July, the Ministry of Petroleum said that, in an effort to solve the scarcity of the product, they would over-supply the market with 11 million liters of the product, when daily demand was only 8 million liters per day.

But the minister, Diezani Allison-Madueke, has now said that the scarcity was persisting because the kerosene was being hoarded, moved illegally into other countries, sold elsewhere at higher prices and was even being sold to airlines at higher prices. There is also a strong black market where kerosene is sold at three or four times the official price of U.S. 33 cents a liter. In fact, it is believed that more is sold on the black market than on the legal market.

The Independent Petroleum Marketers Association of Nigeria maintains that daily demand has grown beyond the 8 million-liter mark and not all petrol stations have adequate supplies.

The country's oil refineries operate well under capacity and are in urgent need of refurbishing. As major plans for new refining capacity are floated, the poor are giving up on kerosene for cooking purposes, because of price gouging and endless queuing. Firewood is now regaining its place as a domestic fuel and charcoal sales are reported to have increased more than 100%. This is a development that LASEPA could give some thought to in terms of the environmental impact of wood and charcoal production and burning.

For further information, see April 6, 2011, article - Talks Continue as Nigeria Plans Upgrades, Three Greenfield Refineries to Reduce Fuel Imports.

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