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Fuel scarcity still frustrating Nigeria cities, businesses—BH Report

The fuel scarcity that roared its head since early December last year is still persisting in parts of the country even though the government and industry players are maintaining silence. This is the high point of the weekly report of the Business Hilights Intelligence Unit (BHIU), released in Lagos on Sunday.

According to the report, “The federal government is yet to agree to the solution provided by the major marketers who asked for tax holiday in other to take care of the risen landing cost of petroleum products since the global price of crude oil went across $50. Oil price in the last one week is hovering above $70 and the landing cost that will trail refined products imported during this price regime must be above the official landing cost of N138.

“Some importers are looking at N171 as their current landing cost which means that fuel pump price should be in the region of N185 or more, but the government is considering the closeness of general elections to continue to keep mute on the looming crisis of new pump price.

Checks in parts of Lagos show pump price around N170 and above in obscurely located filling stations in Lagos and above N220 in many parts of South South and south east.

Across the north with the exception of Abuja, motorists pay as high as N250 per litre.

“Because Nigeria, the six largest producer and exporter of crude oil in the world is unfortunately an importer of refined products, the negative dynamics inherent in oil price mechanism will continue to hamper activities in Nigeria and in some cases aid inflationary trend.

BHIU also noted that “The only solution will be for Nigeria to refine all it needs or continue to suffer the shocks of refined products landing costs which usually go up when crude price is up and down when price is falling”.

“Currently, all four national refineries are down and producing far below capacity, thus posing pressure on available tank farms along the coastlines of Lagos, Port Harcourt and Calabar.

Government claimed since last year that it is searching for investors to revive the refineries while Nigerians continue to suffer official lack of ideas or implementation of refining policies good for Nigeria.

“In the last few months OPEC had tried to drive, successfully a regime of rising oil prices which is only good for Nigeria in terms of revenue earnings, but very negative when macro economics of the entire scenario is put on the table.

One of the reports across the Nigerian media over the weekend showed that prices of food items increased in the last one month in Kaduna metropolis due to persistent fuel scarcity in the metropolis.

In Lagos, Abuja and other mega cities, the story is the same as “More than half of all petrol stations put together in Nigeria do not dispense product regularly.

Observers say the Department of Petroleum Resources (DPR) is becoming tired in sealing of petrol stations even though the human capacity of the agency cannot track stations engaging in sharp practices across the federation.