The challenge of Nigerian fuel distribution

Mar 26, 2002 01:00 AM

When oil was first discovered in commercial quantity in Oloibiri in the late 1950s, the role it would play in the economy of Nigeria was not fully appreciated. In that pre-independence period and in fact all through the first Republic and the early years of military rule, agriculture was the mainstay of the nation economy. But the Arab-Israeli wars of 1973 changed all that. It became clear that oil holds the ace in international politics.
With Nigeria's fortunes enhanced by a quantum of oil earnings, consumption patterns change owing to enhanced economic well-being. This naturally affected the local consumption of petroleum products especially petrol. For instance, more people could afford to have stand-by generators, multiple cars, etc.

Many people could have erroneously maintained that fuel scarcity started only a few years ago when the military began a systematic mismanagement of the Nigeria Economy. In reality, there has always being fuel scarcity but the difference is that initially, itwas only during festive periods especially Christmas that Nigerians witnessed temporary shortfalls in fuel supply.
This was then caused by hoarders who wanted to make brisk business for the period but what was witnessed in the last few years until the situation was brought under control not long ago was something different. It was one of the ugly legacies of military rule in Nigeria. But what it all points to is that the challenge of oil distribution in Nigeria is immense.

At the height of the crisis in the petroleum sector, the government split the NNPC into a number of subsidiary companies. One of the companies, the Pipelines and Products Marketing Company (PPMC) is charged with supplying petroleum products at minimal cost to the local market, ensure efficient supply of crude oil to the refineries, ensure efficient and effective evacuation of refined petroleum products from the refineries to the market place and maintenance of safe operation.
In order to carry out the responsibilities efficientlyand effectively, PPMC maintains an elaborate infrastructure consisting of a network of 5,000 km of pipelines carrying 4,315 km of multi-product and over 666 km of crude oil pipelines. In addition, the pipelines interlink 22 petroleum storage depots strategically all over the country.

The pipeline and depot systems were further inter-linked with the four local refineries in Kaduna, Warri and Port-Harcourt, two offshore terminals at Escravos and Bonny, four jetties at Okrika, Atlas Cove, Warri and Calabar. Also, a number of pump stations are sited as strategic locations along the pipeline to boost flow when petroleum products crude are being pumped through long distances.
The company s material resources include mainline pumps, loading pumps, booster pumps, compressors, loading arms and meters, storage tanks and communication equipment. To ensure maximum protection for the pipelines, the company, in the words of Mr. Jackson Gaius-Obaseki, group managing director of NNPC, "pipelines are laid on a 25-metrewide right of way (ROW) which has been specifically acquired by government for this purpose. They are buried at a depth of three feet to avoid accidental contacts as they traverse the length and breadth of the country".

This background and technical details are necessary for one to appreciate the enormous task involved in ensuring that Nigerians get prompts supply of oil products. For a country as vast Nigeria, the challenge is even more. The restiveness of youths in the Niger Delta over what they perceive as the neglect of the area by the oil exploration companies and the consequent cases of pipeline vandalisation does not make the task easier. But in spite of all that, Nigeria has, to a very reasonable extent, solved the hitherto intractable problem of fuel supply.
It is to the credit of the present board of PPMC led by Alhaji Ciroma Mohammed that the ugly scenario in which Nigerians kept vigil at filling station is now history. His board should be commended for being forward-looking and being able to come up with strategies that effectively brought sanity to the fuel supply situation at the country.

In fact, in May last year, amid fears that the fuel scarcity witnessed then might persist, the board chairman called for co-operation from all concerned. Speaking during an inspection tour of the Apapa Jetties project, he declared, "What I know is that we have a responsibility to ensure that there is constant supply of fuel to our citizens; what I know is that we can achieve this objective (of uninterrupted fuel supply) by co-operating among ourselves to overcome all the odds that make it difficult for us to make petroleum products easily available and affordable to our people. That is my mission and I believe with the co-operation of everyone we can accomplish it".
It has been estimated that by the end of last year, the local demand for petrol will hit 26 mm litres daily from the 25 mm litres it was at the beginning of the year. By the magic year 2003, it is expected that Nigerians will be consuming28 mm litres daily. Three years ago, it was a mere 13 mm litres but it increase to 16.2 mm and 18.21 mm litres daily in 1999 and 2000 respectively.

With increased motorization and enhanced economic growth, demand for petroleum products would naturally rise and PPMC in particular and NNPC in general will need to step up efforts to meet this anticipated increase in demand. Sources at NNPC say that to be able to meet the demand of 28 mm litres daily consumption by 2003, the corporation would required 630,000 bpd of crude oil. But the country s four refineries have only a combined refining capacity of 445,000 bpd. In the next two years that is the challenge that PPMC will have to grapple with.

Source: Vanguard
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