Hope for fuel rises after economy loses N2.4 trn to strike

BusinessDay estimates the economy may have lost up to N2.4 trillion or  three percent of GDP, calculated over a four-week period and based on rising scale of the impact of the fuel shortages on business, especially in the transportation, telecoms, manufacturing and banking sectors.

Recall that in 2012, the eight-day fuel subsidy strikes cost the economy about N207 billion, according to the National Bureau of Statistics (NBS), whereas independent analysts put the figure much higher at N720 billion.

The estimates were derived using NBS growth rates for GDP in Q2 2015, pro-rated over the past four weeks and weighted to reflect the increasing impact of the fuel shortages every week.

However, lifting and distribution of petroleum products were scheduled to resume across the country last night, following an agreement between the Federal Government and oil marketers to end the lingering fuel scarcity strangulating business  and social activity for weeks.

Magnus Abe, chairman of the Senate Committee on Petroleum Resources (Downstream) disclosed this at the end of the public hearing by the committee in Abuja yesterday.

Abe said the resolution was reached after a meeting among the Senate Committee on Petroleum Resources (Upstream and Downstream), Major Oil Marketers’ Association of Nigeria (MOMAN), Ngozi Okonjo-Iweala minister of Finance and Coordinating Minister for the Economy,Joseph Dawha, Group Managing Director, Nigeria National Petroleum Corporation (NNPC), and major stakeholders in the oil and gas sector.

While the main bulk of oil marketers is expected to start loading today, after the agreement with government, Capital Oil, an independent marketer which pledged to break the stike yesterday, is said to have started loading and despatching many of its 1,000 trucks with petroleum products across the country last night.

This should bring some relief to businesses and Nigerians at large who have been cramped for weeks by shortages arising from the deadlock.

In the past few weeks, there has been a slowdown in economic activities across sectors, including, telecom, banking, manufacturing and education among others.

Banks and other financial institutions and telecommunication companies yesterday despatched  messages to their customers. The banks announced they would be resuming at 9.00am and closing at between 1.00pm and 2.00pm, while the mobile operators reported quality of service might take a bashing on account of dwindling fuel reserved to run electricity generators for their base stations.

A senior telecom sector source who pleaded anonymity, said “a few base stations in Lagos have already gone offline because the mobile operators in question cannot get diesel to those locations”. Mobile subscribers in the commercial nerve centre have begun to experience serious difficulties in making voice calls and browsing the internet.

A message from a second tier bank to its customers yesterday said, “Due to the current unavailability of petroleum products, kindly be informed that beginning today, (yesterday) our branches will close at 2pm each day, until the current energy crisis is resolved.

It added, “Please understand that this is an energy saving measure intended to ensure we are able to power up our branches for a sufficient period of time each day, to attend to your banking needs in view of the persistent diesel shortage. All electronic channels and services however, will remain available all through the day for your banking needs.”

Another bank in a notice to its customers said, “The current shortage of petroleum products in the country has limited our ability to supply diesel to all our branches in order to continue normal branch operations. Due to this, we unavoidably have to close our branches nationwide at 1pm, from Monday, 25th May 2015.

“Whilst we have had to take this step to close branch operations early, we would like to seek your understanding at this time, and assure you that we will continue to work hard at finding alternative solutions to this situation and will advise you once the situation has abated.

“However, all our alternative channels will be fully functional and available for all your Personal and Business Banking, e-Branches, Automated Teller Machines (ATMs), and Internet Banking”.

A media statement on Monday by Etisalat, UAE (United Arab Emirates)  based telecommunications operator, confirmed the current development. “The scarcity of petroleum products has impacted every sector of the economy and the provision of telecommunications services is no exception. We are however working with partners and doing all that is possible to continue to deliver quality services in spite of the challenge. Such a prolonged situation threatens our ability to re-fuel all our sites and thus negatively impacting service”, the statement said.

Akin-Olusoji Akinyele; joshua bassey; Iheanyi Nwachukwu; Ben Uzor; Owede Agbajileke & Kehinde Akintola