Since the invasion of Ukraine by Russia in February, the global oil market has seen the commodity scarce, leading to volatile prices for middle distillates – diesel and aviation fuel.
On Tuesday, BusinessDay observed that the pump price of diesel rose to N720 from the N650 it was weeks ago, making it difficult for businesses and households to smoothly carry on their daily activities.
Many fuel stations around Apapa-Iganmu and Ajeromi-Ifelodun local government areas in Lagos have shut their diesel pumps on the back of this scarcity. Checks by BusinessDay show that stations with diesel now sell at between N700 and N720 per litre.
Joseph Alfa, a quality assurance control personnel at the Eko Electricity Distribution Company (EKEDC), said it cost his church N720 per litre to get diesel from a fuel station at Orile Iganmu.
BusinessDay can also confirm that in the early hours of Tuesday, another station on the same axis sold at the same price.
Explaining the reasons for the scarcity, Clement Isong, the executive secretary, Major Oil Marketers Association of Nigeria (MOMAN), said that the ongoing war in Ukraine has forced up crude oil prices worldwide.
“It has got as high as $130 per barrel,” he said. “The problem simply is that even if you have the money, it is not so easy to find.”
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Isong further stated that marketers were finding it difficult to source products and import them to the country.
“Then there is the issue of accessing forex. This has been challenging for marketers.
“When you add these two things together, you will understand why we are having this problem,” Isong said.
The price of Brent crude, the international benchmark, extended its rally by $1.61 to $123.3 per barrel as of 6:40 pm Nigerian time on Tuesday. It stood at $77.24 per barrel at the end of last year.
On the other side, the International Energy Agency (IEA) has said that the current oil disaster is bigger than the 1970s oil crunch.
Fatih Birol, the executive director, IEA, made this known in an interview with German daily “Der Spiegel” published Tuesday.
“It was all about oil back then,” Birol told the news outlet. “We now have an oil crisis, a gas crisis, and an electricity crisis all at the same time,” said the head of the international agency established in the aftermath of the Arab oil embargo in the 1970s.
The energy crisis began in the autumn of last year, but the Russian invasion of Ukraine exacerbated it significantly, as markets fear disruptions in the Russian energy supply, while Western governments impose increasingly stringent sanctions on Moscow as a result of the war in Ukraine.
On Monday, the EU agreed to ban most Russian oil imports, with pipeline supply exempt for the time being. This will further constrict already constrained crude and product markets.
According to Birol, the world, particularly Europe, could face a summer of gasoline, fuel, and jet fuel shortages.
Fuel demand is expected to rise as the peak holiday season in Europe and the United States begins, Birol said.
