Nigeria‘s third largest oil producing state, Bayelsa is currently facing a severe fuel shortage that has left most commuters and motorists stranded in a situation analysts blame on a drop in fuel imports caused by the partial removal of subsidies.
Residents in Bayelsa queued at petrol stations in a bid to fill up their cars with petrol while some struggled at various black market points which sold a litre for a staggering 500 naira (3 dollars).
The fuel scarcity has made some residents in Bayelsa resort to walking long distances to their destinations and car owners going into neighbouring states like Delta state to buy at a cheaper rate of 100 naira per litre.
Some residents in Bayelsa state said they had been at the petrol station for three days.
“I found out that fuel was costing 500 to 600 Naira per litre, so I decided to park my car here and since that time I have been here until now. So it has been pathetic,” said Bob Ahprela, a pastor.
“We are begging the people bringing the fuel to bring the fuel to us because we are suffering here, our people are suffering one litre of fuel in the black market is 500 naira, we do not know what to do so we are begging them to bring us fuel,” said Emma Saviour, a bus driver.
The situation has deteriorated as residents complained of increase in transportation fare to other cities.
“Yesterday from River state to Yenagoa I paid 1200 naira (7 dollars), today I am paying 1400 naira (8 dollars) I don’t even know the cause of the increase,” said Lyver Douye, a student.
Petroleum marketers had warned earlier this month that the nation may witness fuel shortages in the coming weeks as petrol imports, the major source of domestic supply, have dropped by about 40 percent since the government announced the partial removal of subsidy on the product.
President Goodluck Jonathan‘s government abruptly removed the subsidy on January 1 but strikes and protests by trade unions and civil society forced him to reinstate some of it, although the pump price was increased by 50 percent.
Analysts warn that policy makers have failed to protect consumers from unscrupulous dealers.
“In Bayelsa there is so much impunity on the part the people who are at the helm of affairs. That because they don’t take the welfare of the masses into considerations a lot of times when they take their decision. So there is no price control in the state and anybody can come to do business and decide to sell at whatever cost,” said Godsent Jim-Dorugu, an analyst.
Major marketers and other private importers are responsible for 50 percent of domestic supply with the Nigerian National Petroleum Corporation supplying the balance.
There are indications that marketers, who had import allocations from the Petroleum Product Pricing Regulatory Agency, had either halved or stopped fuel importation.
Nigeria imports most of the fuel it consumes because its four refineries are decrepit, producing at only a quarter of their installed capacity.
Several investigations are now in place on Nigeria’s energy sector that were spurred by the fuel subsidy row, including a Senate probe into subsidies, a probe by the corruption watchdog into the state oil company and price regulator, and an audit of the entire Oil Ministry.
The naira ended at 159.20 to the dollar, weakening from a close of 158.85 on Friday when it hit a 2-1/2 month high, helped by U.S. oil giant Chevron selling $54 million to banks in exchange for naira.
The currency was unchanged after a central bank auction on Monday.
The bank sold $250 million at 156.50 naira to the dollar at the auction, the same rate and amount sold at its previous auction last Wednesday.
Dealers say they expect dollar sales this week from energy firms including state-owned NNPC to help give the naira a boost.
“We expect the naira to strengthen this week because of expected dollar sales by NNPC, Mobil and Shell ,” one dealer said, adding that interbank rates could start to converge with central bank rates if dollar liquidity is sustained.
The naira lost 4.5 percent against the dollar in 2011 but analysts say the Nigerian currency is likely to appreciate this year given the country’s foreign reserves of $34.72 billion and because of oil companies’ expanding supply of dollars.
“The market has witnessed significant dollar inflows from energy firms since the beginning of the year which will help stabilise the value of the currency in the medium term,” he told Reuters
- Naira hits 5-week high on ample dollar supply (catheyspost.wordpress.com)