On January 18, 2015, Nigeria’s petroleum minister Diezani Alison-Madueke announced a fuel price reduction that took the retail cost from ₦97 to ₦87 and explained that the price drop was occasioned by the drop in crude oil prices in the international market. An incensed Nigerian public that had set high standards for itself insisted that ₦87 was high regardless, refused to be placated by the price reduction and made sure to vote out the Goodluck Jonathan government and usher in the era of Muhammadu Buhari.

Once sworn in, Muhammadu Buhari looked at the country’s vast array of accomplished energy industry professionals, somehow saw himself in their midst and named himself as petroleum minister with the excuse that he needed to be personally involved for things to get done properly.

Well, he has been as great a petroleum minister as he has been a president.

After insisting that subsidy payments were scams in 2015, Buhari got in, and in 2022, his reign as petroleum minister saw petroleum subsidy claims finally outgrow oil and gas revenue receipts from crude oil sales with the Nigerian National Petroleum Company (NNPC) Limited recording gross revenue of ₦2.39 trillion from oil and gas revenue and incurring ₦2.6 trillion in subsidy claims.

As far as the petrol supply goes, well, Abuja has been dealing with a year-long petrol scarcity crisis that has since spread to other parts of the country. The Nigerian public that was incensed with ₦97 and ₦87 per-litre petrol prices have found zen with a ₦270 per-litre price and carried on with nary a whimper.

The outbreak of the Russia-Ukraine War in February 2022 severely impacted the international oil market with the drop in supply due to production loss and boycotts forcing crude oil prices to seven-year highs.

Muhammadu Buhari had promised to improve local refining capacity. Still, his tenure led to the NNPC assuming an even broader role as Nigeria’s importer of petroleum products it was supposed to produce. Oil theft has caused production to drop to a 1.18 million barrels per day figure that is well below Nigeria’s 1.8 million BPD OPEC quota, with a million barrels possibly being lost daily to oil thieves that don’t exactly concern themselves with OPEC quotas.

Nigeria’s absurd lack of local oil refining capacity has left it exposed to the vagaries of fuel price changes in the international market with devastating impacts on public and private sector finances. It would have been bearable if the public or private sector had benefited from the rise in prices, but it has been an equal-opportunity plague.

Regarding economic impact, fuel prices are influential enough on inflation when you consider transportation alone. Still, Nigeria’s failure to provide adequate power has meant that petrol also plays an inordinately high role in domestic power generation in the private and public sectors. The limited supply and steep prices increase inflation rates in an economy that already had double-digit inflation troubles.

The economic impact of the petrol price going from ₦87 to ₦280 becomes even more striking when you factor in that the national grid supplies only 51.2% of Nigeria’s power needs, with the rest being made up for by the use of generators fuelled with petrol or diesel. A Dalberg report said Nigeria has 22 million small power generators, and the Manufacturers Association of Nigeria has said that 40% of its members’ expenditure goes on power generation. This means that any fuel price hikes affect the Nigerian economy in ways that run much deeper than they do practically everywhere else in the world.

One would expect some remorse and an attempt at placation from the government, instead the ruling All Progressive Congress has chosen to campaign with enough eagerness and aplomb to suggest that it believes it is governing a country chock-full of gluttons for punishment who cannot wait to be tormented even more than they already have been. 

To be honest, they probably have a point when considering the differences in reactions Nigerians had to the Buhari administration and its predecessor. Still, regardless this cannot be allowed to stand.

The failure of the energy policy and its impact on the lives of almost 200 million Nigerians have been harrowing. Businesses are shutting down. People are losing jobs. Families are losing breadwinners. Insecurity is growing. Buhari and the APC talked a good game, but when the time came, they had nothing to give, so something has to give.

Nwanze is a partner at SBM Intelligence