If a country produces two million barrels per day (selling at $40 billion per annum) and still there are unending queues at all filling stations even in the commercial capital Lagos, how would one characterize it? What a paradox that everyday fuel is the energy-rich country's scarcest commodity! This is what Stanford political scientist, Terry Karl, calls the "paradox of plenty," and the Cambridge economists call the "Dutch disease." This owes to the "venality, waste and corruption fuelled by petro-capitalism," as one analyst puts it.

The oil accounts for 90% of Nigerian exports and 80% of the total government revenues. However 85% of the oil revenues accrue to 1% of the population. If this is not enough, there are several more eye-opening facts. Over the past three decades, $100 billion from oil revenues, a quarter of total earnings, has simply disappeared. In 2003 alone, according to the country's anti-corruption chief, Nuhu Ribadu, 70% of the country's oil wealth was stolen.

Little wonder that the number of people living below poverty line has doubled in absolute terms, from 36% to 70% of the population, in the past three decades, i.e. since Nigeria became a major oil exporter. In nominal terms, the number of people living below one dollar a day has risen from 19 million people to a staggering 91 million.

Lagos, whose horrible slum world defies description, has expanded 40 times since 1960, mostly because of the sprawling slums. Lagos had slums even during the colonial era, but now it has been submerged into a wider ocean of slums with a population of anywhere between twelve to sixteen million. Mind it, census is a very sensitive topic in Nigeria.

Because dividing Nigeria into Muslim North with Hausa ethnic group, and Christian South with Ibo and Yoruba communities is too simplistic.

Nigeria is composed of 250 ethnic groups -- and the fault-lines are not only ethnic but also linguistic, religious and geographic. Although the country has a decidedly Muslim majority, how does one convince the Christians about this.

Similarly, because of a federal constitution, the resources and the civil service jobs are to be distributed on the basis of relative population of the various ethnic and linguistic groups. The vested interests in statistics remaining vague are so strong that many a government has failed to conduct a reliable census.

If oil resources are not being distributed evenly, then how do the poor make a livelihood? Vandalizing and stealing the exposed and insecure oil pipelines, of course. Although around one sixth of the oil is stolen before it reaches the ports for being shipped for export, the issue is not merely economic.

The charred human carcasses of five hundred or so killed just after Christmas day 2006, in the Abule Egba slum area, due to a pipeline explosion are a horrifying reminder of the perils involved. The vandals who hot-tap the pipelines remain apathetic to, and oblivious of, the misery that his exercise has left behind in the form of ten major accidents in as many years.

But the crime seems less dreary and more explainable, even if not excusable, for the poor when juxtaposed with the rich who are also involved in it. A whole oil mafia, patronized by influential politicians, bureaucrats and military officers, works to hire unemployed youth to scoop oil into jerry cans, and to run oil barges through creeks to smuggle them to the off-shore loading stations. This cannot happen without the complicity of multinational oil companies.

So the local discontent in the Niger Delta is not without reason. Although the Movement for Emancipation of Niger Delta (Mend) has not reached the proportion of Biafra's secessionist bid in the mid to late 1960's, hardly a month goes by without the news of blowing up of an oil pipeline or abduction of a foreign oil companies' workers.

The worst effect of the Nigerian oil crisis in the whole region is environmental. The theft of oil, the spillage, the explosions, the burnings -- all are destroying the soil and eco-system of the region. The legendary activist Ken Saro Wiwa became an environment martyr of the Delta region in 1995, but the aims he espoused for eradicating pollution and getting a fair share in oil revenues for his Ogoni people are far from being realized, even 12 years after his barbarous hanging by Gen. Sani Abacha's regime.

Nigeria remains on or around the top of the list of corrupt countries, by the Transparency International rating. Not that one believes the TI rating to be the gospel, or that one agrees with their yardsticks, but the magnitude of corruption is hardly a secret. One has to pay 120 Naira ($1) for every petty issue, from buying an airline ticket to registering one's vote, in Nigeria. Over $100 billion are believed to have been earned through corruption since the return to democracy in 1999.

Nigeria accounts for 9% of all US imports, and is a major pillar in the future strategy of the United States for the region, both for promotion of democracy and for war against terror. The total import bill of the United States from the Gulf of Guinea is expected to rise to 25% of the total imports by 2015, of which Nigeria's will be a lion's share. It is in Washington's interest to invest in good governance in Nigeria.

The Writer is an Oxford-published Cambridge-educated widely-read analyst on politics of the Muslim world.