Saturday, April 7, 2012

A GASOLINE-SCARCITY SCENARIO PLAYING AT A PUMP NEAR YOU


You pull up to the gas station only to find it closed and padlocks on the pumps. People have been rioting in the streets because cheap gas is gone.  By the bleak look of this now abandoned station it isn't going to reopen any time soon. Even though the country has massive oil deposits exported daily, you can't buy gasoline!
RIOTS IN THE STREET
The local politicos are helpless. The game is being played by international oil cartels, speculators on the New York Stock Exchange and your government trying to keep the boat afloat. The national fuel subsidy recently yanked from the marketplace that precipitated the riots has allowed the price of gasoline to rocket skyward. This insensitivity to the working class budgets of your countrymen has lead to walkouts and strikes. The president belatedly promises to reinstate the subsidy as soon as the political machine can make it work.
A QUARTER OF THE BUDGET TO GASOLINE
The rationale behind the fuel subsidy was to make gasoline affordable to the growing population living in poverty. But the subsidy for cheap fuel slowly ate the government budget; it took more than agricultural spending, more than infrastructure for which the money is now needed. The new president had to rescind the subsidy.
The shock of gasoline prices tripling set off demonstrations that turned to riots. Church bombings last Christmas Day left 49 people dead and scores wounded. The black market for gasoline is thriving and comes and goes through the porous borders of the country.
For now, your problem is to get to an open gas station that has short enough lines that you can get to the pump before your meager supply vanishes. There should be one just down the street, shouldn't there? But this isn't the United States, it's Nigeria in February of 2012. A sigh of relief or an unease about staring your fuelture™ in the face?
A SUPPLIER WITHOUT SUPPLY
Nigeria produces and exports 3 million barrels of oil per day, but its own citizens have to struggle for enough gasoline to power their cars and their generators. Little electricity is available without it. With holdings larger than the U.S. and Mexico combined, Nigeria is a "fragile" nation, according to a recent World Bank report. Because their refineries often do not operate, the country has to import its own fuel while sending its raw crude out to other countries to be refined. Though its "Bonnie" sweet crude is of excellent and desirable quality, working out the production and delivery of it has been problematical from the beginning.
NOT THE TRUTH ABOUT YOUR FUELTURE™?
Hopefully, most people will be able to roll up to a station that is open, reputable and has a consistent supply, even if the price of gasoline goes as high as $7.80 as it has recently in France. The supply is there, just phenomenally expensive.
This scenario is not yet playing at a pump near you, but without careful management, it could.