Ques­tions marks sur­round crip­pling fuel short­age

Finweek English Edition - - IN BRIEF -

I’m in the car and creep­ing through heavy Abuja traf­fic. Pass­ing a fill­ing sta­tion, I see a long queue of cars all the way down the street and around the cor­ner, driv­ers out and loung­ing against their ve­hi­cles in the bak­ing sun.

Some have been here only a few hours, some longer, hav­ing spent the night in the queue. My driver waited 18 hours to fill up in Abuja last week, and tells me most sta­tions he passes in the search for fuel are gated shut, ei­ther be­cause there’s noth­ing to sell or be­cause they won’t sell with­out higher prices. If a ru­mour gets around that a cer­tain sta­tion is re­ceiv­ing a tanker that night, it’ll go from hav­ing hardly any cus­tomers to con­tend­ing with a kilo­me­tres-long queue in the blink of an eye.

Mean­while, black-mar­ket ven­dors have ap­peared on street cor­ners by petrol sta­tions, charg­ing a near 100% pre­mium for the priv­i­lege of fill­ing up fast with their ques­tion­able prod­uct, usu­ally a wa­tered down and messed about ap­prox­i­ma­tion of the real thing.

As you’d ex­pect in a road-re­liant city like Abuja, the queues are af­fect­ing busi­ness. Con­tacts can’t make meet­ings be­cause tanks are empty, taxi fares are up and so­cial lives are suf­fer­ing.

Talk about the fuel sit­u­a­tion has dom­i­nated con­ver­sa­tion in many of Nige­ria’s ma­jor cities in re­cent weeks, though the crunch is said to be worst in Abuja. “Why no fuel?” “When is the fuel ar­riv­ing?” “Why will you not sell me fuel?”

Th­ese are all per­ti­nent ques­tions and, as usual, there have been many, many sug­ges­tions as to why pumps have run dry. The re­ceived wis­dom in­so­far as it ex­ists is that the gov­ern­ment had been late pay­ing fuel dis­trib­u­tors, a rea­son that speaks to two painful truths about the state of the econ­omy here. Firstly (I have said it be­fore, I’ll say it un­til the day it’s fixed), it is ris­i­ble that Nige­ria can ex­port more crude oil than any other coun­try on the con­ti­nent but re­mains re­liant on im­ported oil prod­ucts be­cause its own re­fin­ing ca­pac­ity is limited, de­graded and some would say be­yond sal­vaging.

Se­condly, the fuel cri­sis shows just how much of a cash squeeze Nige­ria’s gov­ern­ment is fac­ing af­ter a steep fall in crude oil prices that has se­verely pres­sured rev­enues. There’s an un­set­tling irony here, I know. On 5 May, out­go­ing fi­nance min­is­ter Ngozi Okonjo-Iweala said that Nige­ria has al­ready bor­rowed more than half the cash it can this year, and it’s only the start of May. To give an idea of the grav­ity of the fix that Nige­ria’s in, some of the bor­rowed money went to pay gov­ern­ment salaries.

If it ’s t his bad now, God help driv­ers and fuel dis­trib­u­tors when the gov­ern­ment has reached its bor­row­ing l imit. More to the point, God help Nige­ria’s next f inance min­is­ter with books like th­ese to bal­ance.

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