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Economy | Oil & Gas

Fuel Queues Resurface in Abuja, Kaduna and Other States

Mar 07, 2023   •   by CSL Research   •   Source: CSL   •   eye-icon 183 views

According to a Punch newspaper report, long queues to purchase Premium Motor Spirit, also known as petrol, have resurfaced in Abuja, Nasarawa, Niger, Kaduna, and other states. Oil marketers claim that the resurgence of fuel scarcity is due to a lack of access to the commodity, and that many of their trucks have been stranded at depots since October of last year. According to the Nigerian National Petroleum Company Limited, the resurgence of long queues is due to restrictions on businesses and physical movement imposed to allow the presidential and National Assembly elections to take place. Fuel scarcity has been a persistent issue for Nigerians since early 2022. 

 

The product's scarcity has led to arbitrary increase in price above the government's approved price of N185 per litre. The pump price of petrol, which was between N162 and about N170 per litre prior to last year, suddenly started moving up to c.N200 per litre when the first disruption in the petrol supply occurred in the first quarter of 2022 due to the importation of adulterated petrol into the country by the Nigerian National Petroleum Corporation. Since then, the country has not recovered from the event, as product scarcity and racketeering have persisted. Now, a litre of fuel sells for between N200 to N600 per litre depending on the location. Oil marketers have consistently blamed the shortages and price hike on the unavailability of the product, the high cost of renting daughter vessels and the cost of trucking products to many parts of the country, particularly the far north and east. 

 

Amid the scarcity and widespread queues, the NNPCL announced that it has enough product to keep the country wet for 47 days. The NNPC stated that it has 2.1 billion litres of PMS stock, representing 0.9 billion litres in all the land depots nationwide and 1.2 billion litres on marine vessels, which is equivalent to 35 days sufficiency as of March 4, 2023. Citizens were advised not to engage in panic buying as there are plans to close the month of March 2023 with about 2.8 billion litres, equivalent to 47 days of sufficiency. 

 

We continue to keep our eyes on the commencement of the Dangote refinery, an integrated petrochemical refinery which is situated in the Lekki Free Zone, Lagos State. It has a capacity of processing about 650,000 barrels of crude oil per day. Nigeria’s hope of attaining self[1]sufficiency in the local domestic oil refining space might just rest largely on the operations of the Dangote refinery. The refinery, which has one of the largest production capacities in the world, operating at full capacity would more than meet Nigeria’s domestic fuel requirements with excess capacity for exports. While we note that achieving self-sufficiency in local refining capacity might not reduce the cost of petrol significantly, sufficient local refining capacity would at least boost the availability of the product and bring a lasting end to the persistent issue of fuel scarcity in the country

 

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