Fuel scarcity in Nigeria has led to significant economic disruption and price inflation. The Major Energy Marketers Association of Nigeria (MEMAN) reported that despite the scheduled arrival of 300 million litres of petrol, the situation has not improved. As a result, businesses are experiencing daily losses, and small and medium-sized enterprises (SMEs) are having to ration their operating hours. Motorists are facing long queues at fuel stations, leading to man-hour losses, while commuters are forced to walk long distances due to increased transport fares. The scarcity has also created a black market, with petrol prices reaching as high as N1,500 per litre. The Independent Petroleum Marketers Association of Nigeria (IPMAN) warned that the shortage would persist for two weeks and threatened to halt petrol supply if outstanding bridging claims are not paid. Dealers at the Apapa depot in Lagos complained that priority is being given to trucks heading to Abuja, resulting in a shortage of supply for Lagos and neighboring states. MEMAN CEO, Mr. Clement Isong, suggested opening up the sector to allow other private sector players to compete [073ae068].
In addition to the fuel scarcity, cooking gas dealers in Nigeria have adjusted their prices following improved supply and forex availability. The price of refilling 12.5kg of cooking gas has crashed from N14,000 to about N10,000. The price crash is attributed to supply improvements, relative availability of foreign exchange for import, and the Nigerian government's removal of value-added tax (VAT) from the product. Recent data from the National Bureau of Statistics (NBS) shows that the price of 12.5kg of LPG increased by 46.88% in one year. The demand for cooking gas has declined amid increasing living expenses. The Nigerian Bureau of Statistics reported a rise in the inflation rate from 28.92% in December 2023 to 29.90% in January 2024 [9b3b1fbc].
Meanwhile, the price of a 100kg bag of garri has reached record prices in markets in Jos, the capital of Plateau State. Traders blame the hike on farmers who deliberately delay processing the products to cause artificial scarcity. The price of garri has soared to its highest level in decades, with a bag of 100kg selling for N72,000. The high demand for garri and the delay in processing by farmers contribute to the price increase. The price may rise even further as the rainy season hasn't fully set in. The rising inflation in Nigeria has affected the prices of commodities, including garri. The continuous rise in the costs of staple foods has reduced the buying capacity of Nigerians [998950fc].
The federal government of Nigeria is considering assisting independent fuel marketers in installing Compressed Natural Gas (CNG) pumps at filling stations. This move is part of the government's plan to accelerate the adoption of CNG, which is cheaper than petrol. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has ordered all filling stations to commence selling CNG. However, independent marketers have raised concerns about the high cost of setting up CNG pumps, citing the current high cost of borrowing from banks. They are requesting government assistance in obtaining loans at lower interest rates. In response, the government has stated that it will consider assisting the marketers if they need funding to install CNG pumps, as the return on investment for gas is significantly higher than that of petrol, gasoline, and diesel. The Nigerian National Petroleum Company Limited (NNPC) has also assured the public that it has over 1.5 billion litres of petrol in stock, enough to serve the country for the next 30 days [ba4ba2da].
Oil marketers in Nigeria, represented by the Major Energy Marketers Association of Nigeria (MEMAN), have stated that petrol prices at the pump cannot drop below N300 per litre unless Nigeria starts manufacturing PMS in significant quantities. They argue that the price will crash when mass production begins, citing the example of diesel prices which dropped from N1,700 to N1,200 after the Dangote refinery began production. The marketers claim that foreign refineries are taking advantage of Nigeria and that local refiners need access to sufficient crude oil. Some filling stations in Nigeria have started selling Compressed Natural Gas (CNG) as an alternative to petrol. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has ordered all filling stations to commence selling CNG [f9ffa9b6].
The federal government stated that about $2.5 billion would be saved yearly from every one million vehicles powered by Compressed Natural Gas (CNG). The Programme Director of the Presidential Initiative on Compressed Natural Gas, Michael Oluwagbemi, disclosed this during a stakeholders' meeting in Port Harcourt. Oluwagbemi explained that the initiative can reduce inflation and the cost of transportation, as well as contribute to the nation's economic progress and the end of pollution and environmental deterioration. CNG is described as cleaner, cheaper, and more reliable for the transportation sector. The use of CNG vehicles could save the country about $2.5 billion a year and 6,000,000 liters of fuel per day [bcf54708].
The federal government, in collaboration with the National Agency for Science and Engineering Infrastructure (NASENI) and Portland Gas Limited, has opened a Compressed Natural Gas (CNG) reverse-engineering, training, filling, and conversation centre in Abuja. The CEO of Portland Gas Limited, Folajimi Mohammed, praised President Bola Tinubu for his vision to diversify the country's energy sources and lower transportation costs. Mohammed also mentioned the company's collaboration with Kia to develop and distribute CNG hybrid models in Nigeria. The Federal Government plans to introduce 2,700 compressed natural gas-powered buses and tricycles in Ilorin, with a goal of setting up 60 refueling locations and 100 conversion workshops across 18 states by the end of 2024 [f11a5d57].
Funnels are being sold on Uhuru highway in the city where electric power is available. The economic reality is that filling up a fuel tank is no longer possible and running out of fuel is not unusual. The booming business in funnels came after fuel prices hit Sh200 per litre, increasing the chances of motorists running out of fuel. Funnels on sale indicate that the economy is doing badly, affecting both small car owners and the affluent. The funnel sales reflect the hard economic reality. Bottles used to be cut and used as funnels, but even such bottles are now unavailable [e5de6a69].
Cooking gas dealers in Nigeria have crashed the price of cooking gas to a four-month low, attributing it to the government's intervention, such as free cylinder distribution and import duty removal. The price of cooking gas has fallen below N900 per kilogramme for the first time in four months. The government's interventions include removing VAT and import duties, improving access to forex for import, and distributing unrestrained gas cylinders to Nigerians. Dealers are now accessing forex relatively easily in the official market, making import easy. The government needs to sustain its interventions in the sector to ensure more Nigerians use cooking gas. Despite attempts by the government to crash cooking gas prices, dealers have reported a slight increase in the cost of the commodity due to foreign exchange challenges. The current price of cooking gas is N1,066 per kilogramme [278e4499].