NIGERIA'S DILEMMA:...The Current Situation Of Things

Ever since the inception of these current administration we all knew it was a dead end, because of certain of info that was released from day one, personalities involved, To be the president of the country now becomes a battle of who's who in the political space, with the right connections, networks, Money, and a well coordinated strategy the presidency is yours, i really hate to sound like the prophet of doom, but then this is reality coming through, it was too evident, too clear, to be ignored, since most of the people been blinded by hunger, suffering but with few watts of naira that is wiggle in the face of an ordinary man is worth a conscience, not minding whatsoever consequence or whatever lies ahead just as far as the immediate gratification is taken care off.

Few days ago there has been tension in the air, due to an all new hike in the price of pms, which literally drives the economy, cause since power supply is still a major bottle neck, businesses had to switch to an alternative source of power generating

Nigeria being one of the wealthiest country in Africa ought to have past this Threshold far behind but the sad reality is we are yet to even reach it, despite having so much deposit in terms of Natural resources, Human Capital and vibrant young population, i hate to be the bearer of these sad news but since the struggle began we have been hoping Dangote refinary once launch will drastically reduce the cost of pms in the country since it will be locally refined, but then again i'm sorry cause at this point Dangote Refinery is not the silver bullet we need to solve this matter of fuel price hike and scarcity all over the country now, few years back no one will ever come to this standpoint that we can buy a liter of fuel for as high as 1,200 ($0.75)....thats like the highest ever.

The complexity in all of these is really driving every one insane, the steadfast increase in the cost of living is becoming unbearable, the naira purchasing power is down to nothing, i hate to sound this way about my beloved country but those in power who are suppose to make things right are incapacitated leaving us utterly shattered to fend for ourselves.

Just like me a lot of people would be wondering why we have this hike amd scarcity of fuel all over the country and what is probably the way forward.

Let'd dig deep to whats actually is causing this havoc upon us

Nigeria as a country, as we all know is an oil-producing country, infact the number one oil producing country in Africa and we currently produce between 1.5 million barrels and 1.7 million

We are the number 1 oil-producing country in Africa, and we currently produce between 1.5 million and 1.7 million barrels barrels daily, however all the 1.7 million do not come to Nigeria or the NNPC, it is divided between NNPC that gets between 4000,000 and 800,000 barrels of crude oil extracted, the rest of the crude oil goes to the IOCs like shell and cheveron for investing their money for drilling.

Smaller oil companies like Oando, Aradel and selplat also get a small fraction of tge crude oil from the 1.7million daily production.

What does NNPC do with its own share of the crude oil?

They sell to oil traders in lieu of dollar revenue on behalf of the people of Nigeria.

10 years ago NNPC use to remit atleast $3 billion every month to CBN. This inflow from NNPC really helped to stabilise the naira those days when ut was below 200/$1, as of today, NNPC doesn't do that anymore because of the fuel subsidy removal

...>How It Works

Nigeria has four refinaries that are moribund and no longer working, meanwhile these four refinaries have daily capacity to refine 445,000 metric tones of crude oil, however since they are not working due to the design and commission of some busiensses men who are profiting from the dead refinaries.

NNPC takes this 445,000 crude oil from their allocation and gives it to international oil traders like vitol and the rest

As of today, Nigeria is using all its daily allocation to pay for refined fuel, this is why NNPC does not remit any dollar revenue again to the coffer of the government

Then these traders give NNPC refined fuel which they bring to Nigeria and sell to retailers and other oil marketers, this arrangements were working very well lets say five years ago, when we were doing 2.3 million barrels per day

we were all doing Great then, not untill

After covid our oil production took a dip Our daily production went down from 2.3 million barrel down to 1.1 million so what that means is that what NNPC now get as its allocation went down too from 600,000 down to about 250,000 barrels of crude oil which means we cant continue giving vitol the pleadge of 445,000 barrels of crude oil meant for our refinaries, at best they can give 100-150,000 barrels of crude oil which is barely enough for the entire country

It is inevitable that NNPC would start owing these traders, then came on these administration with all new devaluation policy that crumbled the naira
all together, last year on may 29 our president announced with a fiat that tge fuel subsidy will be removed in lieu to stabilize the economy

This announcement plunged households, individuals and businesses into an unimaginable poverty which we are yet to recover from, as if this affliction was nit enough the same unserious government decided to float the currency without any fundamental backing to it

The floating devaluation of the currency was the death knell that brought us to our knees and to where we are today because of the devaluation a landing cost of petrol after nnpc has exchanged crude oil with the oil traders balloon to 1,200 to 1L because nnpc was dealing with the price of crude oil at the international Market price when they are doing the trade by barter without devaluation the landing cost could have been between 650 and 750 liter, the devaluation complicated many things including the nnpc business model

So while the landing cost of petrol in Nigeria is 1,200 to 1 L NPC was selling the fuel to marketers at 545 to 1 L with this nnpc was paying over 700 Naira per liter has subsidy since last week was broke and already in a whole instead of coming clean the choose to Deeper by the night that we are not paying subsidies and has every result the death they owe international oil traders keep piling up now the chicken has come to roast nnpc holds this Traders over over 6 billion dollars which they can't afford to pay Traders have stopped giving us fear on credit they are now demanding cash and carry

Unfortunately nnpc is too broke to pay cash for refined Fuel they can only give crude oil for refined fuel but that is not enough again and the result has been disastrous and this is why Nigerian are sleeping at the fuel station and why the Drivers would spend productive hours looking for fuel this is why Nigerians are really struggling at the fuel station and one of the key reasons why the cost of living everything in the country is so expensive