By Michael Ogunyemi
Lagos during rush hour is a symphony of chaos. In areas where bikes are not outlawed yet, okadas weave through gridlocked trucks, hawkers have their movements choreographed, darting between idling cars, and in the background, the hum of engines blends with the shouts of drivers trying to negotiate nonexistent lanes.
Lagos–and Nigeria–is messy, relentless and oddly beautiful, a testament to a country that is constantly moving, even during a standstill.
But underneath this chaos is a fragile truth: Nigeria’s entire economy relies on the veins of its transportation sector. Those veins require more than a single source of lifeblood.
I need to begin with a confession: I was not a fan of Nigeria’s perennial petrol queues. When I used to travel almost religiously between Lagos and Abuja by road, I used to see trucks carrying goods just standing idle at petrol stations.
Yet, in those moments, I would marvel at the resilience of Nigeria and its transportation ecosystem.
The transport networks made of trucks, buses and even Lagos’ okadas were kept running by a patchwork of importers, marketers and distributors. This was diversity as the backbone of an industry employing millions of Nigerians.
Jobs, jobs and more jobs
One import licence creates so many jobs. When petrol arrives at the Apapa port, it is not just filling up tanks, it is sustaining truckers, customs agents and port workers.
A marketer in Lagos or Port Harcourt could source petrol from Europe or the Middle East, creating jobs for logistics coordinators, accountants and mechanics, among others.
The jobs and economic activity they generate in Nigeria exist because market players compete and need to innovate. In a market as delicate as the petrol industry in an already testy Nigeria, “flexibility is survival.”
When petrol prices spike abroad, independent marketers have the choice to lean on local stocks when pipelines are vandalised, or global prices reduce, marketers are able to pivot.
Nigeria’s deregulated petrol market in theory is supposed to encourage diversity and this ecosystem.
But if imports vanish, energy security for Nigeria becomes a guessing game and limits players to gambling on a single supplier’s pricing and reliability.
We have seen how a single provider’s depot in Apapa faced delays and like clockwork, petrol station queues appeared and stretched for miles.
At our worst, we have had drivers sleep in queues in and around petrol stations and transport fares double overnight. Now, scale this risk nationwide without market plurality to plug that hole?
The logistics lifeline
Proponents of a single supplier argue against multiplicity. “Why do we need to import when we can produce locally?” Nigeria’s transport sector, on the demand and supply side, thrives on options.
I spoke to a fleet owner in Kano last year. His trucks haul everything from rice to cement. But 40% of his revenues, which sometimes subsidise his other operations, come from petrol distribution.
“If I can’t source fuel from whoever I want, I will lose my market power,” he told me. “If it is one company, my profit will disappear.”
His worry is not abstract. When petrol imports were restricted, his operating costs rose. More than half of his fleet was forced to be parked. Not only was his business affected, but adjacent businesses operating in and supporting his industry, from mechanics to cleaners and roadside food vendors, felt the effect of the import restriction. Import diversity offers more than price stabilisation.
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Thanks to market liberalisation, smaller-scale importers and marketers are able to experiment with localised solutions and business agreements to reach underserved areas that might be unprofitable for larger market players.
These experiments and tweaks might look minor, but they offer incremental adaptability to a sector that needs to be resilient.
A monopoly would standardise the entire process, and in Nigeria, especially as uneven as it is, it would mean exclusion.
Uniformity always comes at a cost
A few weeks ago, I met a truck driver named Abidemi at a petrol station in Lagos. He had been waiting for a tanker. “Before, there were many options. Now, my supplier has the same supplier as everybody, and we are getting delays.”
Those words stuck with me. This goes beyond economics. The tanker delay meant Abidemi’s time wasn’t valued.
Worse, if he’s unable to enjoy duplicity in the market, he is unable to bargain, and this will turn him into a cog in the machine that is dependent on the same entity for his survival.
But Abidemi is an important node in a vast network. His breakdown meant he could not return to Jos from Mile 2 to get another shipment of groceries from the farm.
Just like Abidemi, thousands of Nigerians are employed in transportation and logistics. These jobs depend on a pluralistic and bustling market. If the sector is consolidated, the opportunities shrink, and entire livelihoods will be erased.
A path forward
There is no viable solution that works without the coming together of all of the players in the supply chain, from the local refiners to the importers. All the players must be empowered.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) must maintain its ability to grant licences and continue to do so. A truly deregulated market means more players are looking for a piece of the pie.
The profits from competition can fix more Nigerian roads and ports.
Also, a route to maintaining Nigeria’s deregulation is the enforcement of antitrust measures to prevent predatory pricing. But perhaps most importantly, Nigeria must stop conflating “big” with “better”.
Nigeria and its history are littered with monopolies that were disguised as “national champions.”
As I left Abidemi at the petrol station, he pointed to the line of trucks like his, just waiting. “This is our problem. We like the one big thing that will fix everything. But Nigeria is not one big thing. There are many.”
And, Abidemi is right. The road to energy security is crowded, noisy and slow. But it is ours. We need to keep it open to everybody.
•Ogunyemi is a renowned economic analyst based in Lagos