In many areas of Lagos, commercial bus fares have risen by as much as 50 percent including on ride-hailing apps, and food prices are also trending upwards as Nigeria cannot find enough dollars to pay for petrol imports or subsidies on them. It was observed by BusinessDay that there were long queues in petrol stations in many parts of Lagos, mostly on the mainland areas of Ketu, Ikorodu, Festac and Surulere. Young men were seen with cans hustling up drivers who could not wait.
Petrol marketers have given plethora of reasons for this particular round of scarcity, ranging from extortion by touts and security operatives, new taxes by the government and inability to find enough products at the depot. The central bank has been conserving foreign exchange for months, evaluating the difficult options of whether to utilize the scarce remittance the Nigerian National Petroleum Company (NNPC) brings in for local manufacturers who need to purchase imports or to use it to import petrol. The Federal Government has insisted on paying subsidies for petrol, effectively shutting out local marketers who could source their foreign exchange to import petrol if the price per litre could guarantee commercial returns. Following significant efforts, it is making to explore for oil in frontier basins, pay into the Federation Account Allocation Committee, and produce enough money to spend on fuel subsidies, the NNPC has been unable to keep up with required volume needed for the country.
According to Mike Osatuyi, national controller, operations at the Independent Petroleum Marketers Association of Nigeria, their members are finding it more and more difficult to purchase petroleum products from depots since there is not enough supply for them.
Olufemi Adewole, executive secretary of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), stated on Tuesday at an event for the oil industry in Lagos that marketers were unable to obtain foreign exchange at the official CBN rate to enhance the supply and distribution of petrol.
According to DAPPMAN, shortage of foreign exchange, coupled with several unauthorised levies, and bad roads are among the factors making fuel importation and distribution burdensome for members.
The new 0.5% tax on the gross turnover of petroleum marketing companies proposed by the Federal Government’s Finance Act is considered to have displeased the marketers.
Issues of logistics challenges in distributing the products they manage to load from the depot have been reported by the marketers. Policemen, officials of the Lagos State Traffic Management Authority, and thugs, who the Lagos state government says do not work for it, harass tanker drivers daily in a bid to extort them. Bad roads have also been fingered as contributing to the fuel scarcity being witnessed in some parts of the country. Roads are hazardous, like the Ijora-Apapa road, where at least one truck collapses daily trying to navigate the road. The fuel scarcity has affected businesses and individuals as transportation in some areas has increased by 50 percent. This is as a result of increase in the prices of PMS. This is not expected to affect the prices of AGO/MGO in the near future.
