FROM THE ARCHIVES: CBN
Report on Fuel Shortage & Prices in Nigeria (1998)

  Central
Bank of
Nigeria

Special Economic Review Series

   Vol. 1.  No. 1:  May 1998

THE
PERSISTENT SHORTAGES OF PETROLEUM

 PRODUCTS IN NIGERIA: A RE-APPRAISAL 0F

   CAUSES AND POSSIBLE REMEDIES

Government, in
an attempt to satisfy the ever expanding demand for petroleum

products in the country,
established four refineries, with a combined refining capacity

of 445,000 million barrels
of crude oil per day. At full capacity, the refineries will

produce sufficient fuels for
the domestic economy and a substantial surplus for export.

However, provisions were
made for importation of petroleum products to complement

local production during
emergencies. In spite of these efforts, the phenomenon of

petroleum products shortages
which began in 1975 has persisted over the years. Owing

mainly to its telling effect
on the economy, the issue of recurrent shortages has been of

great concern among various
interest groups, including private sector investors,

manufacturers, households
and policy-makers. For example, in 1990, it necessitated the

setting up of investigative
studies and a judicial commission to unravel the underlining

factors in fuel shortages in
the country. Also in 1995, a committee was constituted to

review the activities of the
NNPC and its subsidiaries so as to find lasting solutions to

the problem.

2.   Summary of
Fuel Shortages Study

   by the
Research Department. 1997

Against the
backdrop of protracted petroleum product shortages lasting for about

five consecutive months in
the first half of 1997, the Research Department undertook

a diagnostic study on the
causes of shortages of refined petroleum products in Nigeria

during the year. The study
covered the period 1994 – 1997 and the major findings included

the following:

(a) Shortages in the
Midst of Excess Supply:

  With the
exception of 1994, when prolonged oil workers