Businesses decry huge loss of man-hours as fuel scarcity bites

Businesses operating in Nigeria have decried the huge loss of man-hours as the petrol scarcity in the world’s sixth largest producer of crude, persists.
The fuel scarcity has resulted in traffic gridlocks in major cities, leading to very flexible work hours with a ripple effect of poor labour productivity and low production levels for businesses, a BusinessDay survey reveals.

Corroborating our survey, a recent report by the National Bureau of Statistics (NBS) stated that the country’s “labour productivity declined by eight percent in the fourth quarter of 2015, the first quarter in the period under review to experience a drop in labour productivity.”

“Before the fuel shortage, resumption time in my office was 8am. With the current shortage, I get to the office by 11am and the HR manager never faults me because she is stuck in traffic somewhere,” a respondent revealed when quizzed by BusinessDay on challenges arising as a result of the scarcity.

The NBS report attributed the decline to prevalent petrol scarcity, low investment and government spending, and the decline in power generation during the quarter. However, stemming from our investigations, the decline may continue in subsequent quarters.

“We rely on generators now than ever, because the power situation has worsened. However, with the fuel scarcity, we have to manage the fuel at our disposal. The generator now runs between 12:00 pm and 4:00 pm, this has marred our labour productivity,” an SME operator told BusinessDay.

This implies that as poor labour productivity and a dip in production levels continue to compound the miseries of businesses, many are left with no option but to cut down work hours in a bid to ration the limited fuel they have.

In what a good number describe as the worst fuel crisis ever, the situation has also led to staff retrenchment as businesses seek to buffer expenses incurred from paying a premium price for the product in the black market.

“When you have to pay double in fuel expenses, it disrupts your financial budget for the year and it has become inevitable for us to reduce our staff strength in a bid to balance expenditure,” a major SME operator said.

Although some of our respondents revealed that they have been forced to lay-off staff, others have not. However, they admit that it will be considered if the situation continues unabated in the short run.