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Nigerians groan under biting petrol shortages over subsidy row


FUELBusiness leaders in Africa’s leading oil producer Nigeria on Thursday warned that jobs could be at risk, as a weeks-long fuel crisis showed no signs of easing.

Long queues have been seen for days outside filling stations, flights have been grounded and generators that kick in when the country’s patchy public electricity supply goes off have run silent, leaving many without power.

“Many companies have shut down because they cannot get diesel to fuel their plants,” Musa Yusuf, of the Lagos Chamber of Commerce and Industry, told AFP.

“Unless the situation is redressed, companies may be forced to lay off (staff).”

Addressing the crisis looks likely to be the first major task for incoming president Muhammadu Buhari, who takes office next Friday.

– Empty tanks –

Nigerian motorists have borne the brunt of the shortages, with long queues at petrol stations in major cities such as Lagos, the capital Abuja, the oil-producing hub of Port Harcourt and Kano in the north.

Drivers in Lagos have increasingly abandoned their cars, easing the megacity’s notorious traffic gridlock, but more than doubling prices for commuters on public transport on many routes.

Black market and legitimate petrol vendors were doing a brisk trade, selling at about 140 naira (70 US cents, 62 euro cents) a litre — well above the official price of 87 naira.

“I have been at this (filling) station since yesterday (Wednesday),” said Rasaq Olamitoye on Awolowo Road, the main thoroughfare in the upmarket suburb of Ikoyi island.

“I had to sleep in the car because I don’t have enough fuel to drive out of the queue. There is no hope as the station is not selling.”

At one filling station, motorists and young men with jerrycans jostled to buy supplies.

“It is a shame that an oil-producing nation like Nigeria is going through all this hardship,” said one motorist, who refused to give his name.

At Lagos domestic airport on Thursday morning, passengers were told all flights were delayed because there was no aviation fuel.

“It is not even clear if the fuel tanker is in the airport,” one airport worker said. “They delay each flight for 50 minutes each flight and then review.”

– Subsidies –

Nigeria produces some two million barrels of crude oil a day but despite its huge reserves, it imports much of its fuel due to a lack of refining capability — a situation blamed on corruption and mismanagement.

To make fuel affordable, Nigeria has frozen the price of a litre of petrol at 87 naira, lower than the market rate. Fuel importers expect subsidy payments from the government to make up the difference.

When the government does not pay, fuel runs scarce, frequently causing gridlock and panic.

But the subsidy programme has been found to be rife with corruption, including false claims and overpayments.

In January 2012, the government tried to end the fuel subsidies, causing petrol prices to more than double.

But it was forced to partially reinstate them after tens of thousands of people took to the streets in violent protests that left more than a dozen dead.

– Indefinite strike –

Unions say the crisis has arisen because the cash-strapped Nigerian government — hit by the global slump in oil prices — owes 200 billion naira in outstanding subsidies to oil importers and marketeers.

Last month, outgoing Finance Minister Ngozi Okonjo-Iweala said fuel importers were paid 156 billion naira.

But fuel depots have been shut until the debt is paid in full, preventing truck drivers from filling up their tankers with petrol since last week and distributing it for sale.

At the same time, unions are angry at the sale by the Nigerian Petroleum Development Company — the upstream subsidiary of the state-run oil firm — of two oil-producing fields to private investors.

Unions claim the sale did not follow due process and want it reversed.

“Right now, there have been no serious efforts by government to address the two issues and so the scarcity will persist,” said Tokunbo Korodo, from the National Union of Petroleum and Natural Gas Workers (NUPENG).

Babatunde Oke, spokesman for the white collar oil workers union PENGASSAN, said indefinite strike action would disrupt production at the disputed oil-producing fields.

Neconde Energy Limited, the private operator of one of the blocks, said it had not acted illegally in buying a 45 percent stake in the block and the remaining 55 percent shares were still held by government.

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  • emmanuel kalu

    we are being blackmailed by marketers and the govt is watching on. the out going president did one major thing for nigeria,by not fighting the election. he can leave a lasting impression by crushing this hostage takers called fuel marketers. now would be a very good time to crush it. nigeria are paying 140-200 for fuel. so the govt needs to use NNPC to import fuel and sell it at cost. if the govt can import enough fuel to last for 6 months, it would give the income administration the time to completely and totally crush the hostage takers for good. nigeria spend between 5-6 billion dollars each year on fuel importation. that is a enough to build 70 modular refineries that produce between 20k-50k bpd. they can be installed in 9 months. while new bigger refineries are built.

  • Osanebi Osakuni

    The signs of things to come. Buhari who is totally ignorant of the state of things promised to reduce petrol pump price to N40 per litre during campaign without understanding that the faIl in oil prices correspondingly led to fall in the value of Naira. Consequently, more Naira is required to exchange for Dollars needed for importations. Importers now need all their outstanding bills paid because of the uncertainties ahead. When the outgoing Government wanted subsidies removed to enable private investors do business of refining products locally, these same APC people and so called human rights groups rolled out war drums against them.To avoid the situation we find ourselves today, the Finance Minister promised to establish sovereign fund but Amaechi and these same people took FGN to Supreme Court. Consequently, all monies were shared and stolen. We are all waiting for May 29th to come quickly for us to see the ‘change’.

    • banks111

      Get it right bro. this problem was caused by the useless Jonathan, who sat for six years doing nothing.
      APC and Buhari have no hand in this mess.

  • olu

    The spectacle we are witnessing now has been rehashed over and over again. The solution is to completely dump the urchins (independent marketers and other distributors) who have no business distributing petroleum products. A new licensing phase be introduced where only those who have capacity to engage in the business are allowed to continue lifting and distrbuting it. The action of these marketers is nothing but sabotage as such anyone found holding the economy of state to ransom (as they often do) should be treated as traitors and appropriate sanctions imposed on them. Life ban from dealing in petroleum business may be consdered. Enough of making the whole country prostate to accomodate their greed.