This tin dey vex me plenty plenty.

"Nigeria is a prime example of a country trapped in the resource curse. Whereas some resource‐rich economies, such as Botswana or Norway, were able to utilize their resources for stable economic growth, Nigeria has suffered from a continuous economic underperformance and widespread poverty within the population, albeit growing revenues from petroleum exports. Nigeria is the largest petroleum exporter in Africa, and its large proven oil reserves place it among the world’s most oil-abundant areas (Ahmad Khan, 1994; Ariweriokuma, 2009). Nigerian oil exports have gained major economic significance since the 1970s. By 1979, the share of the mineral economy of the total GDP accounted for 25 percent; petroleum exports accounted for over 90 percent of total exports, and contributed four fifths to total government revenues, a level that has been sustained until today (Gelb et al., 1988; Lewis 2007; see Appendix 1), thus constituting Nigeria’s most important economic activity (Ahmad Khan, 1994)" - Berlin, 2009.

In a nutshell, this is the story of Nigerian oil - it is there, it is abundant, it is a curse. Stalled development in Nigeria can be traced back to the political economy of oil, the interrelationship of resources and post-colonial regime characteristics, and the potential of resource wealth to lead to continuous conflict, which in turn decreases revenues, worsens economic hardship and divides the population. I am strongly simplifying here, but the point remains valid: A nation so rich in resources should not experience widespread poverty and economic underdevelopment. Africa's largest oil producer should not have to suffer from a substantial fuel shortage.

The current shortage in petroleum in combination with the latest NEPA (or PHCN) desaster (Nigeria was promised non-stop electricity for a month - my house had not seen lights for three days, before they finally put it back on for a few hours last night) once more shows how there still is a lot to be done before Nigeria will be able to use its potential.

It is bitter irony: there is more than enough oil in the South of this very country, and still there are endless queues at the filling stations. Several hours of waiting in line do not necessarily guarantee that you will get fuel at all; the filling station might run out - or for strange reasons decide to stop selling for a few hours. Taxi prices as well as bus fares just went up. Businesses and individuals are not able to use their generators without any fuel. The shortage paralyzes the economy, in times when a severe banking crisis has already led to desastrous consequences for the Nigerian economy.

Nigerian crude oil is exported, petroleum is imported and highly subsidised. Refineries that would allow for indigenous production of fuel from the own oil are not in place. The lack of oil-related infrastructure is just startling. In Nigeria it is more profitable to smuggle the imported petroleum to the neighbouring countries, where petroleum is not as highly subsidized. The smuggling of fuel on a grand scale necessarily leads to severe petroleum shortages in a country of 140 million people, who are in need of fuel to provide their own electricity most of the time. The solution proposed by NNPC (Nigerian National Petroleum Company) is deregulation of the downstream sector. Theoretically this does not sound like a bad idea; making the oil sector more independent of goverment intervention, while at the same time allowing for urgently needed increases in government revenue. This is publicly advertised on Nigerian TV. NTA shows the "deregulation ad" every other hour - trying to convince Nigerians to support a bill that will lead to an extreme increase in petroleum prices. The current price of 65 Naira per litre (around 30 cents) has been announced to increase to at least 100 Naira due to deregulation. The announced increase was supposed to take effect in November, but has already been postponed to January 2010. This increase is basically impossible to afford for most people - the minimum wage is 5500 Naira (not even up to 30 Euros a month).

This situation is a trap - while the need for deregulation is obvious, the consequences are desastrous. The long-term objective of an independent, self-regulated oil sector requires a huge sacrifice of the already deprived. The only sustainable solution is the investment in oil infrastructure, the establishment of own refineries and the production of petroleum from Nigerian crude oil within the country. What sounds like an intuitive approach turns out to be impossible: corruption, bad governance and mismanagement are the core characteristics not only of any policies relating to resources, but these factors constitute the Nigerian dilemma. Oil is the backbone of the Nigerian economy; the exclusive economic focus on oil extraction has led to the emergence of a rentier state, which is now fed and nourished by the exact cause of the misery: oil.