Will Speak in NNPC on Tuesday on Fixing Fuel Scarcity

Will Speak in NNPC on Tuesday on Fixing Fuel Scarcity

Some cities in Nigeria are experiencing acute fuel scarcity. It does happen in our great nation. It is a reminder that our systems are still at infancy. If not, there is no reason to run into troubles distributing fuel when the citizens are ready to pay. And the problem is not necessarily pricing: some are ready to pay at any price. The problem is Distribution & Logistics. Yes, the same issue that causes problems for ecommerce companies in Nigeria.

For ecommerce, you look at the marginal cost driven by geography. That marginal cost is composed of transaction and distribution costs. But transaction cost is typically negligible since it cannot be eliminated, and is not tied to distributive geography. But distribution cost is where the game is won, and it requires having a great process with solid pillars.

Though operationally it is at the lower phase of the chain, distribution in Nigeria is the upstream because that is where the knowledge base is uppermost, and the highest value could be created in ecommerce. The ecommerce portal is downstream; anyone can make a fancy site with nice SEO. The man that builds the best logistics system for the ecommerce companies would have more leverage than the sites.

The lesson: you have the goods in the warehouse but you cannot deliver to the customers because the distribution is broken. You cannot leapfrog that challenge. You have to solve it to have a great ecommerce operation.

That is the same issue with fuel scarcity. Fixing this must be uniquely Nigerian, and it would require a new architecture. I would be speaking in NNPC this week as we work on how to fix this national challenge. My focus would be looking at technologies that would enable our leaders to solve this problem. Please be guided on what you share; I am good in picking ideas from comments.


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