Globally, downstream is one of the lucrative sectors of the oil and gas industry. Nigeria as one of the countries where crude oil remains a major contributor to the Gross Domestic Product have had several filling stations over the years. Recent growth in the establishment and projection equally shows possible exponential set up of the stations in some emerging towns and cities.
Though, there are no official statistics that establish the number of filling stations per town, city and village across the country, our over 6-month investigation shows that a town is more likely to have at least 5 filling stations within while roads linking to the centre of the town is more likely to have at least 10 stations. Our earlier analysis had noted that prospective owners are usually expected to understand location within the context of factors of production and the implications of the closeness to critical public and private facilities.
Having a filling station requires several requirements. From ministries to agencies and departments one needs to make certain documents available and pay necessary charges to the state and federal governments. Our check indicates that establishing a filling station, apart from buying a land, requires about N55 million. For many prospective owners, this amount is not huge considering the long-term return on investment based on the fact that Nigeria still a petrol-driven car society. In order words, the invested capital would be captured in multiple folds.
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However, our analysis has shown that not all the stations within towns and cities, and along the major highways in the country are making significant returns. Many of the stations have been abandoned because of sales dwindling and other critical factors such as incessant robbery incidents. According to our data, the stations along the main highways mostly experienced robbery attacks.
While carrying out our investigation, more than 100 filling station managers in the South West region were interviewed. Our analyst and his team also carried out several observational studies, which reveal that many stations on the highways have been abandoned because of these factors and others in the last 5 years. From Ibadan to Osogbo, abandoned stations along the Ibadan-Ife axis have been overgrown with grass of different species. The stations have been cave for people who committed varied crimes. The story is not different when one travels to South East and South-South regions through Ondo State.
Ideally, according to experts who spoke with our analyst, filling stations such like other facilities or assets in the oil and gas industry need to be commissioned for use and when the assets are no longer useful to the stakeholders they are abandoned. When abandonment arises, there is a need to invoke decommissioning strategy.
Therefore, stakeholders in the industry need to look at the abandoned stations holistically, examining the severity of the impacts of the crimes being committed on individuals and society in general. It is also necessary that the stakeholders examine the climatic impacts of the stations on the environment.
Our analyst notes that it would not be a bad idea if the abandoned stations, most importantly those within the cities and towns, could be sold to people and organisations that can turn the locations around for the benefits of the host communities. According to the outcomes of our observational studies, majority of the abandoned stations within the cities and towns could be turned into innovation hubs or offices for startups.