Background

Nigeria is in the grips of a massive fuel shortage that has ground its national economy to a halt.

The problem stems from a lack of downstream capacity. Though the country is Africa’s biggest oil producer, with daily output of around two million barrels (bdp), it only has the capacity to refine around 445,000 bpd into fuel.

This has left the Nigerian government heavily reliant on importing fuel for its domestic market. It also pays a hefty subsidy on fuel to maintain price levels for Nigerian consumers – an issue that has been a perennial debate in Nigerian politics. At the beginning of outgoing President Goodluck Jonathan’s tenure, he vowed to get rid of the subsidy only to back down following an upsurge of protest from the country’s labor unions and opposition parties.