Nigeria is suffering from an ideologically inept Federal Government that cannot guarantee the supply of the one thing that could save its collapsing economy: Petrol.
Global Petrol use will climb this year by 600,000 barrels a day, accounting for half of the total increase in oil demand, according to the International Energy Agency. That’s higher than in 2015, when gasoline accounted for 44 percent of the total.
Energy analysts think the surging global demand for Petrol will put a bid underneath oil prices, which account for 90 percent of Nigeria’s exports and 70 percent of its Federal budget.
Demand is growing strongest in Emerging Markets like India and China.
The size of India’s vehicle fleet has doubled between 2007 and 2015, transforming the Asian economy into the world’s sixth largest car market, according to Amrita Sen, chief oil analyst at Energy Aspects Ltd., a London-based consulting firm.
Gasoline consumption in China will grow this year by 218,000 barrels a day, accounting for 65 percent of total oil demand, and up from 213,000 barrels a day last year, when it accounted for 31 percent of the total, according to the IEA.
In America the fall in oil prices is increasing demand for gas guzzling trucks and SUVs.
And in Africa countries like Nigeria will still see petrol demand grow every year for the next decade, making investors like Africa’s richest man Aliko Dangote to spend some $14 billion building Africa’s largest refinery in Lagos.
Dangote may be up to something.
The rising demand for Petrol is pushing up refining margins from Valero Energy Corp., the largest in the U.S., to Reliance Industries Ltd., which operates the world’s biggest refinery in Jamnagar, India, at a time when the global energy industry is struggling with low prices.
The biggest lesson in all these though should be for the Nigerian Government.
Let market forces work and sooner enough prices will correct to equilibrium. In other words, REMOVE fuel subsidy!!