Home Economics Nigeria's Petrol Proof That Government Sucks

Nigeria’s Petrol Proof That Government Sucks



The Guardian wants us to know that fossil fuels are awful and dodgy. Well, OK, we’d expect nothing less than that from them. They also want us to know that there’s something dodgy in Nigeria. Well, OK, you’re going to provoke guffaws among those paying attention if you’re going to try to claim the opposite.

What The Guardian actually manages to prove is that government sucks. Which, given the usual Guardian insistence that everything must be solved by the addition of more government is a pretty odd thing for them to be claiming. The solution to this conundrum being that they just aren’t bright enough to realise what it is that they’ve proved.

The background here is that Nigeria is a crude oil producer, which indeed it is. It’s also one where the government is insane enough to subsidise the use of petrol and diesel within the country. When you can get real hard cash for your oil by exporting it the idea that you’ll make it cheaper for people to waste it at home really is insane. You actually want to make petrol more expensive domestically so that people are careful in their use of it thereby leaving more to be exported for that cold hard cash.

Even if politics is just going to steal all the money – which Nigerian politics is going to do – you would still want to do this for which crook wouldn’t want to maximise the amount they can steal?

The effect of this is that the domestic refineries don’t work – the crude is at global prices, the petrol output at lower than, why operate a refinery? Thus the government buys petrol on the global market for that subsidised domestic one. It buys the really, truly, shitty dregs from the bottom of the refinery towrs too.

There is though a domestic refining industry. One that works entirely illegally. It steals the crude, operates illegal refineries, doesn’t gain subsidies and yet thrives – and also produces better quality petrol than the government buys.

This is, of course, proof that government really, really, sucks.

Petrol sold to Nigeria from Europe ‘dirtier’ than black market ‘bush’ fuel
Samples from illegal refineries in Niger delta found to be of a higher quality than imported petrol in new analysis

That’s really pretty cool as an argument against government, regulation and subsidy, isn’t it?

Shell, Exxon, Chevron and other major oil companies extract and export up to 2m barrels a day of high quality, low sulphur “Bonny Light” crude from the Niger delta. But very little of this oil is refined in the country because its four state-owned refineries are dysfunctional or have closed.

Government cannot in fact process its own, free, oil.

Instead, international dealers export to Nigeria around 900,000 tonnes a year of low-grade, “dirty” fuel, made in Dutch, Belgian and other European refineries, and hundreds of small-scale artisanal refineries produce large quantities of illegal fuel from oil stolen from the network of oil pipelines that criss-cross the Niger delta.

Government buys the worst shit possible instead and is then outcompeted by entirely illegal supply.

Laboratory analysis also showed that the black market fuel was highly polluting but of a higher quality than the imported diesel and gasoline.

Government is so bad that being free of it upgrades even environmental standards.

Illegal artisanal refineries are said by SDN to be growing fast in number and scale, now producing 5-20% of all the gasoline and diesel consumed in Nigeria from the estimated 175,000 barrels of crude oil stolen each year.

Actual pirates are better than government.

Where this leaves The Guardian’s usual argument that Britain would be made better by ever more government is unclear.




Please enter your comment!
Please enter your name here


in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

Support Us

Recent posts

American Hyperconsumerism Is Killing Fewer People!

This report does not say what the Guardian headline writers think it does: Three Americans create enough carbon emissions to kill one person, study finds The...

Contracts Often Lag New Revenue Streams

I've been - vaguely and not with any great interest - anticipating a story like this: Scarlett Johansson sues Walt Disney over Marvel’s Black Widow...

Richard Murphy Rediscovers Monetarism

We have a delightful example of how Richard Murphy simply doesn't understand the basic nuts and bolts of the economics he wants to impose...

Vox Is Missing The Point About Having A Constitution

Not that we should be all that surprised by this from the progressives at Vox. No government- well, no one not controlled by...

So Let’s Have An Elitist Technocracy Instead!

There's been a certain amount - OK, a lot - of squealing in the US about how democracy is the ultimate value and we...

Recent comments