• Tuesday, June 25, 2024
businessday logo

BusinessDay

Petrol scarcity persists, drains pockets

Petrol scarcity persists, drains pockets

Commuters, households and businesses in Nigeria are still bleeding money and man-hours on the back of the scarcity of petrol that re-emerged in November last year.

The two months-long scarcity has exacerbated the cost-of-living and cost-of-doing-business crises in Africa’s biggest economy, which is home to 133 million people living in multidimensional poverty.

With many petrol stations raising pump prices, transport fares have surged in recent months, even as commuters waste hours in petrol queues-induced gridlock; and small businesses and homes relying on petrol generators are spending more on fuel amid poor supply from the grid.

The total electricity generation in the country fell to 3,738 megawatts (MW) on Wednesday from 4,016MW on Tuesday, according to data from the Nigerian Electricity System Operator, which put the national peak demand forecast at 19,798MW.

BusinessDay’s findings showed that queues for petrol at filling stations in many parts of the country have continued unabated, causing hardship for residents and motorists trying to get the product.

On Wednesday, there were long queues of motorists at many filling stations in Lagos, worsening traffic conditions and leaving many stranded at bus stops.

Independent marketers in Lagos were seen selling the product at over N250 per litre, while the major marketers and the Nigerian National Petroleum Company sold it at N169-N170 per litre respectively.

“We are currently in the middle of nowhere; nobody knows how long this scarcity will persist; the government seems undecided about how to proceed. The government seems overwhelmed with the supply crises the country is currently going through,” a senior executive in the downstream sector said.

Oil marketers who spoke to BusinessDay said the fuel supply crisis in many parts of the country might persist till June, based on the government’s plan to end petrol subsidies in that month.

“We are getting the product between N230 per litre and N240 per litre from the private depots. The price becomes higher when we add our transportation cost. So, there is currently no way we can sell at the government-regulated price,” Mike Osatuyi, national operations controller at the Independent Petroleum Marketers Association of Nigeria, said.

Osatuyi said his members have been unable to get their products at government-approved prices, which automatically pushed prices up at various pumps.

Despite the Federal Government budgeting about N3.6 trillion for petrol subsidy till June 2023, Osatuyi said independent marketers are getting petrol from depots at N240 per litre, excluding transportation.

“We are getting the product between N230 per litre and N240 per litre, without transportation. If I get the product at N260 per litre, how much should I sell?”

Billy Gillis-Harry, president of Petroleum Retail Outlet Owners Association of Nigeria, said the availability of petrol for marketers to distribute has remained an issue of concern.

“Let there be products to sell. That is what we are yearning for. Once that problem is sorted, then others shall be addressed too,” he said.

Apart from the pain from the pump, the blow from blackout has left many Nigerians worried as they prepare to go to the polls next month.

Some Lagos residents who spoke with BusinessDay said power outages have reached an embarrassing proportion in the state, forcing businesses and households to rely more on generators.

“The double whammy of petrol scarcity and power outages is making life difficult for everybody. Everybody seems to be talking about the election,” said a resident in the Ikotun area of Lagos who spoke on condition of anonymity.

Analysts at CardinalStone Research have posited that 2023 will be mostly transitional, with gradual policy rollouts, while the strategic priorities of the new administration would likely be more pronounced in 2024.

“With few weeks to the general elections, the economic outlook remains uncertain,” CardinalStone said.

A new report from United Nations Children’s Fund (UNICEF) has warned that some 25 million Nigerians risk severe hunger between June and August this year.

Read also: 163,000 litres of adulterated petroleum products seized in 2022 – Ondo NSCDC

The UN agency, which put the number of famished Nigerians at 17 million, cautioned that the figure would hit 25 million in the predicted period if urgent efforts are not taken to stem the tide.

UNICEF said the drivers of the development include persistent conflicts, climate change, inflation and rising food prices.

It noted that access to food has been affected by unrelenting terrorism in Borno, Adamawa and Yobe, as well as banditry and abductions in Katsina, Sokoto, Kaduna, Benue and Niger states.

“The food security and nutrition situation across Nigeria is deeply concerning,” said Matthias Schmale, UNICEF’s resident and humanitarian coordinator for Nigeria. “I have visited nutrition stabilization centres filled with children who are fighting to stay alive. We must act now to ensure they and others get the lifesaving support they need.”

Other experts say the threats facing Nigeria are multiple and widespread.

On January 7, armed men attacked a train station in the southern state of Edo, kidnapping about 30 people and wounding others.

Eighteen candidates are vying to replace President Muhammadu Buhari, whose final and second term ends on May 29, 2023. The key candidates are Atiku Abubakar of the main opposition Peoples Democratic Party, Bola Tinubu of the ruling All Progressives Congress, and Peter Obi of the Labour Party.