LAGOS, Nigeria – Nigeria’s petroleum sector is facing increased scrutiny as the country grapples with recurring fuel shortages and rising prices, sparking public discontent and raising questions about the management of the Nigerian National Petroleum Company Limited (NNPCL) under Group Chief Executive Officer Mele Kyari.
The situation intensified in June 2024 when President Bola Tinubu announced the removal of the longstanding fuel subsidy, a move intended to alleviate the financial burden on the national budget and promote market-driven pricing. However, the abrupt removal of the subsidy led to an immediate and sharp increase in petrol prices, from approximately ₦238 to over ₦517 per liter, causing significant economic strain for many Nigerians.
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The removal, implemented without adequate cushioning measures, resulted in surging transportation costs and increased prices of goods and services, exacerbating the financial challenges faced by ordinary citizens.
Further compounding the issue, NNPCL admitted in September 2024 that it was facing financial difficulties due to the high costs of fuel imports, disclosing a debt of over $6 billion to oil traders—double the amount previously reported. This financial predicament hampered the company’s ability to import sufficient petrol, leading to prolonged fuel shortages nationwide.
Despite assurances from NNPCL that efforts were underway to address distribution and logistics challenges, shortages persisted, fueling public frustration.
Public discontent has been further fueled by perceptions of mismanagement and a lack of transparency within NNPCL. In August 2024, during the height of the fuel shortages, Kyari’s trip to Saudi Arabia for religious activities drew sharp criticism, with many Nigerians questioning the appropriateness of his absence during a national crisis.
The combination of policy shifts, financial mismanagement, and perceived leadership failures has led to increased calls from civil society groups and the public for Kyari’s resignation or removal. These groups argue that the hardships resulting from fuel scarcity and price hikes reflect deeper systemic issues within NNPCL’s management and the broader petroleum sector.
The situation highlights the challenges faced by many developing nations in balancing fiscal responsibilities with the need to protect citizens from economic hardship.
In response to these challenges, there have been calls for comprehensive reforms within NNPCL, including greater transparency in operations, strategic planning to mitigate the effects of subsidy removals, and investments in local refining capacities to reduce dependence on imported fuel. The ongoing situation underscores the critical need for a balanced approach that addresses fiscal responsibilities while ensuring that policy implementations do not impose undue burdens on the populace.
The events in Nigeria’s petroleum sector are being closely watched by international observers, as they highlight the complexities of managing oil resources in a volatile global market and the importance of good governance and transparency in the energy sector.
