Published in Oil and Gas
Fuel scarcity took a much worse turn at the beginning of February and one month in, the fuel queues have remained long.
March 1st, 2022
Fuel scarcity took a much worse turn at the beginning of February and one month in, the fuel queues have remained long.
Earlier in the year, the Nigerian National Petroleum Corporation (NNPC) had blamed the scarcity and the long queues at petrol stations on the importation of ‘dirty fuel’ put at 100 million litres.
Despite many promises made by the NNPC to end the scarcity, it has been unable to fulfil this promise. In the place of an end to scarcity, the group has taken on the role of clergy, urging patience while promising yet again to ensure the availability of petroleum throughout the country. In the last week of February, it was reported that the NNPC distributed 387 million litres of petroleum to ease the scarcity in the country, however, the issues are yet to be resolved.
That Nigeria continues to have supply problems is especially incongruent with being one of the largest producers of crude oil in the world.
Long Queue of vehicles waiting for petroleum in Nigeria’s capital territory
In the past, fuel scarcity or a surge in the price of fuel has been blamed in part for inflation in the country. Nigeria entered the year with double digit inflation figures and this may go even further up because of the impact of fuel scarcity on many sectors of the economy.
As usual, the ordinary citizen is the biggest loser of all. Already, the ongoing scarcity has been labelled as more suffering for Nigerians.
The impact of this scarcity is especially felt on the cost of transportation, Dataphyte’s random survey of transport fares show that motorists have increased their fares by about 33% to 50% in different parts of the capital city. Motorists who spoke to Dataphyte blamed the increase on fuel scarcity, noting that they needed to make adjustments to cover their running costs.
Food prices have also gone up as another survey showed that restaurants have increased the price of their food citing the increased cost of items in the market.
Other locations aside from Abuja also have reported the increase in food prices.
Food prices are directly connected to transportation costs as food produce is transported from villages to markets. Beyond the cost of transportation, the cost of production of cooked foods is also directly impacted by scarcity of fuel. Most businesses including restaurants generate their own electricity with fuel-powered generators.
Naturally fuel scarcity provides room for the growth of another business popularly called “the black market”. There may be scarcity in fuel stations but somehow black market dealers always have an abundance of fuel to sell at over-priced rates. The simple business strategy is “if you’re desperate enough, you will pay any price for the fuel” and Nigerians have reached the point of desperation. Businesses that need fuel to operate cannot stay in queues for 24 hours, a car stopped in the middle of the road on the way to queue for fuel is a black market customer, in fact even cars in long fuel queues have to buy black market to remain in the queues when their fuel runs out from the start and stop of slow moving queues mop up their fuel.
A vehicle owner patronising black market petrol sellers in Abuja
When Dataphyte sampled prices across different black market dealers whose business addresses are roadsides strategically close to closed fuel stations, on the average a litre goes for N500, a little over three times the cost of petrol at 165/litre.
By some “miracle” black market dealers always find the fuel treasure while the rest of the people either face the daunting task of long endless queues or patronise the business savvy “dealers”.
Anecdotal reports from Nigerians claim fuel attendants with the collusion of fuel stations are the “miracle suppliers” to the dealers for a cut of profits. Although this is plausible, there is no evidence to back it up.
A black market dealer waiting for a buyer in Nigeria’s capital territory
The ripple effect of fuel scarcity impacts almost every aspect of living, and things would get tougher if a solution is not found soon. The NNPCs promises are all well and good but they don’t power cars or fuel generators, they must fulfil their much publicised promises.
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Fuel scarcity took a much worse turn at the beginning of February and one month in, the fuel queues have remained long.
