Fuel Scarcity: The Shame Of A Nation
When the queues started forming in filling stations across Nigeria in December 2017, it was greeted with mixed reactions.
While many thought it was a temporary glitch, as the government eventually claimed; so many others found it unbelievable.
It has been almost two years since Nigeria saw any episodes of fuel scarcity.
However, there has not been any of such episodes that got prolonged as it has in this occasion.
Usually, the fuel shortages come with the festive season and end at the turn of the New Year.
But alas! It's been two months after Christmas and the queues have not disappeared.
The government has moved from denial to blame and then to some acceptance of its inefficiencies; but the shortages have remained.
Also Read: 3 Reasons Fuel Scarcity Has Persisted
Behind The Clouds
From what Nigerians gather from some analysts, the current fuel crisis all seemed inevitable because of what happened in the global energy market and what transpired in Nigeria’s money market.
Analysts and industry watchers argue that at the government made a mistake by raising pump price of fuel from 87 naira to 145 naira per litre at the time that the global oil price was abysmally low and had dropped below 40 dollars per barrel.
The smartest thing to do, they argued, would have been to keep the pump price low just as the crude oil price was low.
In that case, it would have been easier for them to raise the price as crude price recover.
However, the government did not and are now forced to keep the price at an unsustainable rate of 141 - 145 naira.
The situation is complicated by the partial devaluation of the naira which was compelled by the dollar shortage that followed the decline in the oil receipts.
Blame The Dollar
The dollar shortage also meant that independent marketers could not access dollars to import petroleum products.
And when they did, it was at so exorbitant costs that importing to sell at government approved pump price does not make any business sense.
These are the dynamic realities playing out in the energy market and subjecting millions of Nigerians to untold hardship.
The solution looks pretty simple, but it seems the political will is lacking.
As it stands now, the only option left is for the government to remove price cap on pump price of petrol.
That is the only way importation of the product could become attractive.
Right now, because of the exorbitant landing cost and limited access to foreign exchange, it is not profitable for any independent marketer to import petrol.
The Nigeria National Petroleum Corporation has proved incapable in meeting the consumption needs and the independent marketers cannot step in to help unless the price cap is removed.
There is accusation that most of the marketers are importing and selling to neighbouring countries where it is more profitable.
Such trend would continue unless the government summons the courage to do the alleged impossible – remove the price cap.
Although this is politically inexpedient given that election year is around the corner, but it does not look like the government is left with much choices here.
The fuel queues are unlikely to earn the government any votes. Besides, most Nigerians are already paying exorbitant prices for petrol at between 200 and 250-naira per litre.
The time to act is now.
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