How Capital Oil may have averted a Nigeria shutdown

VENTURES AFRICA – On Sunday, Ifeanyi Ubah, the Chairman of Capital Oil, offered a late press conference that would change the dynamics of the fuel crisis that has crippled economic activities over the last month and threatened a complete shutdown.

His oil company was one of the many oil marketers locked in a stand-off with the government of the alleged refusal of the government to pay Subsidy claims. This group say the government owes it over N200 billion ($1 billion), and has refused, since Monday, 18 May, to offload petroleum products for distribution across the country. This has led to the closure of over 80 percent of gas stations within Lagos, the country’s commercial hub, and its capital city, Abuja.

The repercussion has been evident: Motorists are paying almost N1000 for a litre of petrol, locals have turned fuel stations to their bedroom, hospitals have been unable to perform surgeries, Nigeria’s top two airlines–Arik and Aero Contractors–have both announced a downgrade in operations, and so has financial and telecommunications service providers, due to their inability to purchase fuel.

Nigeria’s epileptic power situation forces businesses to rely heavily on diesel and petrol-powered energy sources. leading many, over the weekend, to predict that Nigeria was on the verge of a shutdown. That was until Ifeanyi Ubah made his late public statement. “We believe that a better solution can be pursued towards solving this problem in a way that does not adversely affect our dear citizens,” he told a gathering of journalist last night.

The business mogul and politician decided against pursuing a collective cause by ordering the reopening of his facilities to commence distribution nationwide from Sunday midnight. “We are constrained at this point and have decided that two wrongs cannot make a right. We will not be part of this sabotage against our fatherland.”

His decision is crucial to averting a shutdown. Capital Oil’s facilities have a capacity to offload 13 million of petroleum products in 6 hours. That meant that before the sun was out on Monday morning, about 15 million litres of fuel, lifted by 400 tankers, should be en route all corners of the country, including Lagos and Abuja, the two worst hit cities. “With this act, it is our belief that once again our citizens will begin to smile, return to normal family and work life,” he added.

The oil magnate also included in his speech that his company has in stock the capacity to meet the demands of Nigerians for 15 days. This comes to about a week after the May 29 handover date, which gives enough time for the incoming government to come up with a sustainable solution.

Some critics have linked Ifeany Ubah’s decision to his closeness to the current administration and his keenness to ensure his ally, incumbent President Goodluck Jonathan, is shielded from mass criticism from the public. However, regardless of the rationale behind his decision, a move that will restore normality to business activities and lessen the cost of transportation is sure to return smiles to the faces of Nigerians.