Africa Focus: Fuel scarcity bites Nigeria's economy

Fuel shortage has hit several parts of Nigeria, Africa's most populous nation and biggest oil producer, following oil marketers' refusal to supply fuel until being paid the balance of up to 1 billion U.S dollars subsidy arrears owed them by the government.

The scarcity is not only affecting vehicular movement, it has started to cripple the nation's economy, as most states in the West African country are experiencing fuel scarcity with the shortage disrupting transport activities.

The crisis is affecting all the kinds of fuels namely diesel, petrol and kerosene, which is used by thousands of low-income families in Nigeria.

Most public and private organization in Nigeria rely on diesel and petrol to power their generator machines. Also, with power generation dropping to an all-time low of 1,327 megawatts, most Nigerian households are now living without electricity as they have also run out of fuel to power their generators.

Even before the dip in power generation, most Nigerian households have been relying on generators as the main source of their power supply while using the public power supply as a backup.

However, the chronic fuel shortages which started over a week ago, have made it impossible for households to even get fuel to power their generators.

Although, daily fuel consumption nationwide is about 40 million liters per day, it is estimated that a sizable proportion of the demand goes into fueling of generators.

Chinedu Badmus, a commercial motorcyclist said he bought fuel at the black market at 400 naira (2 U.S. dollars) per liter, which compelled him to increase his fare from 50 naira to 150 per drop.

Moreover, many domestic flights have been cancelled and some international flights are having to land in neighboring countries to refuel.

Long lines of vehicles and people with plastic containers have become a scene often seen at most fuel stations in several states.

Queues of cars are packing roads leading to gas stations and stretching for no less than two hundred meters, congesting street traffic.

In Lagos, Nigeria's economic hub, the fuel shortage has affected most petrol stations, with independent marketers being the worst hit. All the filling stations owned by major oil marketers visited by Xinhua reporters were under lock and key.

Most motorists have to drive from one station to another in search of the scarce commodity.

The scarcity has led to two Nigerian radio stations announcing that they will be off air as the effect of the scarcity of petrol and diesel hit harder.

Classic FM tweeted that it will be shutting down at 8.30 p.m local time on Sunday to enable it ration the available fuel. The station said it will resume broadcasting, without indicating the time.

Another radio station, Naija FM has similarly announced a temporary closure.

In the same vein, one of Nigeria's leader commercial bank, the Guarantee Trust Bank has issued a statement saying it is shortening its opening times in the latest sign of the impact of the fuel shortage.

The bank said its branches will close at 12:00, local time as it struggles to get fuel for its generators.

Two telecommunication giants operating in the country, MTN NG and Airtel has also sent out a formal warning to their consumers that services would be impaired due to the scarcity.

The companies said the scarcity is posing a significant threat to the quality of service and the ability to optimally operate the networks.

Akeem Balogun, a Nigerian business man told Xinhua that the latest fuel scarcity saga means that Nigeria's economy is slowly grinding to halt.

Balogun said he could not understand the reason behind the scarcity, adding that it has affect his business.

"I only hope the government will act fast because the issue is getting out of control, people now resort to buying fuel in the black market because filling stations cannot lift fuel," he added.

Spokesperson for the Nigerian National Petroleum Corporation (NNPC) Ohi Alegbe, said the Corporation has 25 days stock but noted that the scarcity got worse because of the workers' strike.

"As we speak, we have 25 days sufficiency. Although we import only 50 percent of national demand, the scarcity is not supposed to be this severe. The situation was worsened by the strike embarked upon by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG)."

"As a result of this strike, the Petroleum Tanker Drivers (PTDs) are not lifting fuel. Also, members of the Major Oil Marketers Association of Nigeria (MOMAN) have not imported a litre of fuel for a long time now," he added.

Meanwhile, black market operators in Lagos, are making brisk business as fuel scarcity persists in the state.

Motorists, commercial motorcyclists and other petrol users now patronize the black market operators who sell the product at between 300 naira and 200 naira per liter.

Nigeria, the biggest oil producer in Africa producing more than 2 million barrels a day, has been depending on fuel import to meet lion's share of its domestic demand because of lack in petroleum refinery capacity. (One U.S. dollar equals 200 naira) Endi