Nigeria’s falling fuel consumption and its deeply troubled economy
November 4, 2024338 views0 comments
IKEM OKUHU
Ikem Okuhu, a journalist, author, PR professional, brand strategist and teacher, is the CEO of BRANDish, publishers of BRANDish, Nigeria’s first nationally circulating Brands and Marketing magazine. He has a career that has traversed print media, oil & gas, banking and entrepreneurship. Ikem is the author of the book, “PITCH: Debunking Marketing’s Strongest Myths”, a dispassionate exposition of the dos and don’ts of successful engagement in the marketplace, especially the Nigerian marketplace. He can be reached on + 234 8095121535 (text only) or brandishauthority@gmail.com
It has been flying all around social media, and at one point, I got confused about what people were celebrating bandying the drop in the volume of fuel Nigerians consumed each day. While many of the people sharing this were “using style” to praise the Tinubu administration for using subsidy removal to reveal the fraud in the system, there were those who were gloating over the savings wrought on Nigeria by the government by putting the brakes on excessive consumption of fuel. Still sharing these posts were innocent people making jokes about the entire situation with little or no understanding of how dire things truly are.
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Those who shared the information cited data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which indicated that daily fuel consumption dropped to 4.5 million litres in August 2024 from 60 million litres in May 2023, a staggering 92 percent fall.
This is happening even as the alarm was being raised about the potential closure of 10,000 petrol stations as a result of the drop in patronage.
If fuel consumption has fallen from a high of more than 60 million litres per day in the month President Bola Tinubu was sworn in, to just over 4 million litres, less than 18 months after, nothing could tell Mr. President of the level of regression this economy has witnessed under him and in so short a time than those numbers.
In 1977, renowned novelist, Jeffery Archer published a novel titled, ‘Shall We Tell the President’, in which he told the story of a plot to assassinate an American president and about which all but one of those knowledgeable about it are conveniently killed, thus creating a big problem of how to inform the country’s president, historically the first woman president, of the plot.
Nigeria is in a situation where sycophants have confiscated all the microphones, ensuring that no other voices but theirs are heard. But even if it is in a whisper, shall we tell the president that the drastic drop in fuel consumption is a stark reveal of the country’s halting progression sprockets? Shall we get the chance to whisper to him the damning implications of these situations on the country he has offered renewed hope?
The first monster that is staring us in the face is the one of the industrial slowdown, and here, we do not need to chant “solidarity songs” to understand just how bad things have become. Over the past few months, several big businesses have closed their operations in Nigeria and one of the reasons is the cost of operations. Nigeria has been unable to steady grid electricity and to be in the market, every organisation became its own power-generating company. The result is that any increase in the cost of petrol directly impacts productivity. Any business which finds itself in a situation where it can no longer fuel its machinery optimally to profitably remain in business faces the grim fate of closure.
In the United States, the past three elections have had the candidates pitch the return of in-country production from China as major campaign planks. I do not know how it is “smelling” to those around the Nigerian presidency, but it is not an impressive accomplishment to be remembered as the people who supervised the flight of industry from Nigeria and the total collapse of those who wished to remain here.
Unemployment is the next factor and stems directly from the slow grind or total shutdown of industry. Let us even start with the information from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which said about 10,000 operators might be forced to close their businesses.
First, you have to assume that these 10,000 petrol stations have four pumps at each of their stations and that means four attendants for each pump. Assuming they run two shifts each day, that is eight employees. If you add the person in charge of the accounts department, the manager, the person in charge of selling lubes, the tanker drivers and other staff, you are talking about at least 15 employees for each of these 10,000 petrol stations. Add the 150,000 people that will be affected here to the hundreds of thousands of others who are daily losing their jobs as factory workers and other employees along the value chain and it would be clear where we are as people.
The hardship occasioned by the increased energy costs has fractured our social interactions and made coping impossible. This country used to be the place where the happiest people in the world were found. I do not know if any person would be crazy enough to give Nigerians such an ill-fitting label again.
The peculiar communal Nigerian society is therapeutic, with each person possessing healing balms safely kept to aid other people in times of need. We are our brothers’ (and sisters’) keepers. Our nature made us so. It is the reason some people have taken advantage of this peculiar trait to make fortunes from begging. Yes, there are rich Nigerian beggars. Years ago, I recall stopping to fix a flat tyre somewhere in Lagos when a lady driving a Mitsubishi Gallant pulled up to ask me for some money so she could buy petrol: she ran out of money and needed to rush home to take care of a suckling. I obliged and gave her a decent amount, higher than what she requested. Two years later, I saw her, on the same beat. There are many like that: people who would not take paid jobs because they make more money taking advantage of Nigerians’ generosity.
This is disappearing. The other day, I saw a video of some beggars protesting the paucity of alms somewhere in Benin, Edo State. Before this season, a man who is down on his luck could reach out to a few friends to “raise” him. Some of us graduated from the university, feeding off friends who were better financially.
In an article I did in April 2021 titled, “Can the Social Capital Market Have a bearing on Economic Transformation”, I anchored my thesis on the social support systems that were being enabled by social media to facilitate social and economic leverage to Nigerians. In hindsight, I must have written the article in a hurry. I failed to factor in a future, and a near future for that matter, where the individual would find it impossible to support himself, how much less, other people.
In the past, people gathered at pubs to, as they say, “unwind” and generally let their hair down. Discussions that take place in these places are therapeutic; folks share their burdens and go home lighter. But the cost of beer and associated accompaniments have hit the roof. People can no longer host the sort of gregarious fellowships that made pubs as important as they used to be. Before a person decides to go out with friends for a few drinks, he or she must have calibrated his scale of preference several times to be sure that primary needs such as bread for children’s breakfast the next morning wouldn’t be affected.
Can we ignore the matter of supply chain disruption? Look, the wheel on which every economy rotates is the logistics industry. Any economy where goods and services, and of course, people, cannot move is doldrums.
Agreed there was a time Nigerians moved around for fun. It was what made us a unique people. We, especially those of us from the east, travel back home for the smallest of excuses; funerals, weddings, community meetings, land disputes, August Meetings, Christmas, Easter, and new yam festivals; we enjoyed every bit of it. But I am not sure many people can still afford such these days. What we consider important aspects of our social threads are being forced by tough times into luxuries.
Even if we have to do away with some of these and can afford to live well without them, what about commerce? How do we ensure that goods and services continue to be distributed around the country without the inhibitive and prohibitive costs associated with logistics standing in the way?
If the farmer in Benue cannot afford the cost of transporting his produce to markets such as Lagos and Abuja, the implication on his business is better imagined. If somehow, he finds the money to move his wares and consumers cannot afford the astronomical cost as imposed by the cost of transportation, this also worsens what is described as relief road unemployment in an article I published here in September.
The point I am making is that the drop in fuel consumption is not reflective of any increase in discipline on the part of Nigerians. On the contrary, it is indicative of an economy that is dangerously wheeling backwards and down a steep slope.
Our overall national energy level has been dropping, and this is preposterous. The government in Nigeria is ruling over a people who have lost belief in the future. There are sparse reasons for investing in a future by a set of people who do not see their destination as that distant. This means that hard work is discouraged and investment is a distant option.
The current uncertainties are so dire that people are unable to plan. This is the inspiration behind the mass exodus of Nigerians from Nigeria. Many have tried to rationalise the “Japa” phenomenon as a manpower export, but I am not sure I agree. You only export when you have a surplus, and I am one of those who believe Nigeria has a surplus of anything as a nation.
Nigeria has become a prison of sorts and those escaping are doing so because there appears to be no option and only the brave and those who have “great men of God” behind them find the escape routes. That is why the comedy of Odumeje sees more people believing in him than the government. That is why the antics of Prophet Jeremiah Omoto Fufeyin have drawn people who would rather spend money buying his miracle keys, Bathsheba water and other strange things he sells than paying taxes to the government.
The Nigerian economy appears completely crippled and there is nowhere to find the hard evidence as in the transportation and logistics sector. If people cannot move around because the cost of movement is not within reach, there is serious danger. There are thousands of people suffocating in this sector and this should be a source of worry to all thinking leaders of this country.
We need to reflect on the point in our journey where we took the wrong turn to enable us to decide if we should retrace our steps or continue blindly down the present dark alley to nowhere.
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Nigeria has become a prison of sorts and those escaping are doing so because there appears to be no option and only the brave and those who have “great men of God” behind them find the escape routes. That is why the comedy of Odumeje sees more people believing in him than the government. That is why charlatans such as Prophet Jeremiah Omoto Fufeyin have people who would rather spend money buying his miracle keys, Bathsheba water and other strange things he sells than paying taxes to the government.