May 14, 2015
In last two weeks, Nigerians have been forced to queue for fuel and pay about a dollar more than the official price, despite being citizens of Africa’s biggest oil producer. Its four grounded refineries have ensured most of its local consumed petroleum products are shipping from Europe and the US, a situation that has given rise to purported “Subsidy Cabal.”
This cabal, which got its relevance from the government’s decision to incur a portion of fuel cost for consumers by regulated the price locally. The difference is paid to this group as Subsidy. Over the last decade, this group has reportedly shared about N3 trillion, a sum that is well over three quarters of the country’s 2015 annual budget. Despite this, queues remain evident. This group has claimed the government still owes it $1 billion while public officials are suggesting they are strong-arming the government. Industry experts believe the uncertainty surrounding the incoming government’s plan on the subsidy scheme has made marketers reluctant to spend on transporting fuel down to Africa’s most populated country and its biggest economy.
The bickering aside, the real sufferers are local consumers, some of whom are purchasing fuel for N400 per litre ($2.3) at black market rate. This is four times the official N87 going rate. This is mostly seen in Lagos though, Nigeria’s commercial hub where business and board meetings are happening by the minute, and a huge chunk of the higher net worth individuals reside. In the eastern state of Anambra, home to the popular Ontisha Market, one of West Africa’s largest markets, fuel is selling for around N115 to N150. The same is seen in Warri, an oil-producing city, and Benin City.
A survey by NOI Polls showed that the fuel scarcity is biting harder in Nigeria’s Northeast, a region decimated by Boko Haram insurgency. About 97 percent of people in the region admitted they bought petrol above N87 per litre. The Southwest had the lowest percentage of people who bought petrol above N87 per litre.
The poll also revealed that a majority of Nigerians have seen a rise in domestic expenses. About 48 percent are paying higher transport fares, 12 percent are spending more to keep their businesses open, and 3 percent have been unable fuel their cars.
Source: Ventures Africa