Monday, May 25, 2015

Peak Oil Dress Rehearsal?

This is extraordinary. Remember all those dire things that were supposed to happen when Peak Oil hit? All the stuff in The Long Emrgency? Cars queuing up for miles to buy petrol, public transportation jacking up rates, cell phones not working, banks closing their doors, planes grounded for lack of fuel, supermarkets stripped bare, scalpers selling gas in jerry-cans, factories shutting down, stations going off the air, people losing their jobs, political disorder, human sacrifice, dogs and cats living together, mass hysteria...

Turns out all of it is happening...In Nigeria:
Nigeria is facing a prolonged fuel-supply crisis that is taking a severe toll on the country's economy, living conditions, and basic services, reports say.
The shortage in Africa's leading oil producer has forced an increasing number of drivers in Lagos to stop using their personal vehicles, but prices for commuters on public transport have more than doubled. Black market vendors have been selling petrol at about $0.70 per litre - almost double the official price. At Lagos domestic airport on Thursday morning, passengers were told all flights were delayed because there was no aviation fuel.

Felix Onuah, a Nigerian journalist, told Al Jazeera from Abuja on Thursday that many companies and businesses have been forced to shut down due to a dearth of supplies."There is a serious crisis. About eighty percent of petrol stations do not have fuel in the country," he said. "It has also caused a lot of hardship because the shortage has caused a sharp rise in transportation costs and other services associated with fuel."

Musa Yusuf, director-general of Lagos Chamber of Commerce and Industry, told AFP news agency that "many companies have shut down because they cannot get diesel to fuel their plants". He also warned that the fuel crisis could take a major toll on employment. "Unless the situation is redressed, companies may be forced to lay off [staff]," Yusuf said.
Nigeria's severe fuel shortage has started to cause widespread disruption to everyday services, with the telecommunications and banking sectors the latest hit hard by the worsening crisis.
A major Nigerian bank announced on Monday that it would close all branches at 1pm local time, after major mobile phone networks announced over the weekend that a shortage of petroleum products may cause a disruption in services. In a statement, GT Bank said: "The current shortage of petroleum products in the country has limited our ability to supply diesel to all our branches in order to continue normal branch operations. "Due to this, we unavoidably have to close our branches nationwide at 1pm [on Monday]." 
"Things are gradually grinding to a halt in many areas of Nigeria at the moment," our correspondent said, noting that there were reports of schools and electricity networks being affected by the fuel shortage. 
Some Nigerian airlines have announced drastically cut services and some radio stations have gone off air, because they can not source diesel for their generators. 
Nigerian airlines have grounded flights and radio stations were silenced as a months-long fuel shortage aggravated by striking oil tanker drivers worsened in Africa's biggest oil producer.Radio stations went dead on Saturday night, including Classic FM, The Beat and City FM, hit by frequent power outages and out of diesel fuel for generators.
Chaos reigned at bus stations where vehicles stood idle and at Lagos' Murtala Muhammad International Airport as one flight after another was cancelled."All flights suspended or cancelled. No fuel. Been sitting here since 6am," one customer complained on Twitter. 
Vehicles also were grounded. Normally bustling roads in Lagos, a metropolis of 20 million, were half-empty and gas stations were closed on Saturday.
Nigeria, Africa’s largest economy, is on the verge of total shutdown due to a widespread and worsening scarcity of petroleum products. The scarcity, a result of strikes by fuel marketers and transporters, has intensified in the last two weeks as black market prices across the country have skyrocketed past the government-approved N87 ($0.44) per litre price.

The scarcity has resulted in a number of high profile companies shutting down or curtailing operations as radio stations, telecommunications companies and public services have all been badly affected.

MTN, Nigeria’s biggest telecommunications network with over 50 million subscribers, have warned customers to expect service cuts due to an inability to power base station across the country.
Nigeria fuel crisis takes rising economic toll (Al Jazeera)

Nigeria increasingly crippled as fuel shortage worsens (Al Jazeera)

Nigerian airlines cancel flights amid fuel crisis (Al Jazeera)

Africa’s biggest economy is shutting down for lack of fuel (Quartz)

It's not for lack of oil, though:
Nigeria produces about two million barrels of crude oil a day but despite its huge reserves, it imports much of its fuel due to a lack of refining capability - a situation blamed on corruption and mismanagement. The government's fuel-subsidy programme has also been found to be rife with corruption, including false claims and overpayments. 
In January 2012, the government tried to end the fuel subsidies, causing petrol prices to more than double. It was forced to partially reinstate them after tens of thousands of people took to the streets in violent protests that left more than a dozen dead. 
Onuah, the Abuja-based journalist, said oil and gas is normally subsidised by the state, but the government does not have the funds to pay for it anymore."Suppliers claim they have stopped distributing fuel because the outgoing government led by President Goodluck Jonathan still owes them more than $1bn," he told Al Jazeera...
An interesting glimpse into what happens to an economy when fuel runs low - everything is affected. Is it only a matter of time before it happens elsewhere?


  1. It's a good example of how systems like nation-states can respond non-linearly to some conditions, and things can escalate rapidly.

    Something similar happened in the UK around the turn of the century when a load of truckers bloackeded some fuel depots in protest at high prices. For a day or two, everything wsa fine. By the end of the week, we weren't far from bare supermarket shelves and hospitals closing.

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