Nigeria faces an unprecedented energy crisis

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A widespread power outage earlier this week plunged Nigeria into darkness and residents are struggling to power private generators. With the war in Ukraine, the price of a barrel exploded, leading to a shortage of gasoline that crippled the country’s economy.

The bad news came on Tuesday, March 15, late in the afternoon. “Due to a failure of the entire power grid, we unfortunately have to inform you about supply interruptions,” explains one of Nigeria’s most important energy suppliers on Twitter, provoking the anger of the population.

The old, renewed power failure had plunged the entire country of 220 million people into darkness. If load shedding and other mishaps are the order of the day in Nigeria, this time the situation seems to have reached a critical level. “No fuel, no electricity, how could Nigeria work?” asks one surfer. “And we have to keep working, earning money and paying for this useless government in these horrible conditions,” protested another.

Nigeria has been struggling with sporadic power distribution for several weeks. The country’s aging infrastructure partly explains these daily network tensions. Adding to these structural problems are growing difficulties for the national oil company (NNPC) to supply the country’s power plants.

“The causes of our problems are, on the one hand, the war in Ukraine and, on the other hand, the constant vandalism of our oil pipelines. Normally, Nigeria produces enough to fill 250 oil tankers a month, but only 142 ships are loaded due to sabotage,” Muhammadu Lawal, board member of the NNPC, told RFI.

An oil pipeline owned by Italian giant Eni in southern Nigeria blew up Monday, cutting exports and causing an oil spill. Another incident, also attributed to an act of vandalism, had taken place a few days earlier.

plane grounded

To overcome power shortages, Nigerians are turning to private generators, but between shortages and doubling prices at the pump, running generators is proving increasingly complicated.

“There has been no electricity since yesterday and we are running on the generator,” Julius Adewale told AFP news agency at his bakery in Lagos. Consequence: “Our production costs have risen considerably”.

“I buy gasoline on the black market. The price is slightly higher than before and I have to pass this increase on to my prices. Not everyone can afford it, so I’m losing customers,” Solomon, for his part, laments Iroh, a hairdresser interviewed by CGTN Africa.

These bottlenecks also have consequences for the airline sector, which has barely recovered from the Covid 19 crisis. Several local airlines such as Air Peace or Dana Air have announced that they will have to postpone or cancel flights due to a lack of kerosene.

“The situation is becoming really alarming. The prices of services and products are rising,” confirms Chinwe Ossundu, France 24 correspondent in Lagos, who describes the long lines in front of gas stations in the country’s economic capital.

This energy crisis, which is already struggling with inflation exceeding 15%, is beginning to affect the entire economy of the country. A blow to Nigeria, where more than a third of the population lives below the poverty line on less than $1.90 a day.

Oil producer, but dependent

This shortage illustrates the paradox facing Africa’s leading oil-producing country. Despite its gigantic reserves of black gold, Nigeria imports more than 90% of its fuel due to almost non-existent refining capacity.

“Nigeria is the only member of OPEC suffering from a lack of refining capacity. Using poor quality fuel is one of the many costs of our import dependency,” laments Nigerian newspaper Vanguard.

To meet its needs, the country has entered into agreements that allow it to swap its crude oil for refined oil. However, world prices for black gold have skyrocketed since the beginning of the war in Ukraine. In the last few days, the price per barrel seems to be stabilizing around the $100 mark.

This surge in oil prices is taking a huge toll on Nigeria’s public finances as the government spends billions of dollars in subsidies each year to keep pump prices below market levels. At any cost, which should last at least until the next presidential election in February 2023.

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