Nigeria’s Fuel Crisis Worsens With Oil Prices Dropping
Friday , 18-02-2022’s oil price drop came as fuel scarcity continues to plague Nigeria, West Africa’s largest economy. After climbing to $92.94 on Thursday, Brent crude future fell 1.52 percent to $91.46 at 10:30 AM Nigerian Time.
According to the latest update by the OPEC Secretariat, OPEC’s daily oil basket price stands at $95.32 a barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped 71 cents, or 0.7 percent, to $91.05 a barrel in the previous session.
Nigeria’s state oil company, Nigeria National Petroleum Company (NNPC), has had to ramp up import of petrol to cushion the effect of the scarcity caused by product withdrawal due to excess methanol two weeks ago.
The country consumed 80 million litres of petrol before the scarcity; however, no statistics are available since the scarcity hit major cities, including Lagos and Abuja, causing long queues at few filling stations with products.
While most filling stations are under lock and keys for lack of products, the situation has forced motorists and residents into the hands of profiteering black marketers, who now sell product as high as N500 per litre as against N165/litre official price.
Meles Kyari, CEO of the Nigerian National Petroleum Corporation (NNPC), appeared before the House of Representatives downstream committee on Thursday, where he assured that a methanol-free product order worth 2.1 billion litres will arrive soon.In a few days, he promised, the scarcity would end.
“We are a law-abiding company. There is no way we could have known about the methanol presence. The only way we could have known about it is if our suppliers, in good faith, disclosed it to us,” he said.
“In this particular instance, the discovery was made by our inspection agents who noticed the emulsification at the filling stations and brought it to our attention.
“Subsequent investigation revealed that the four cargoes which are all from the same source also contained methanol-blended PMS,” Kyari told Reps.
Nigeria, an oil producing country, depends on importation to meet its petrol consumption needs.
Experts, including the IMF, have in previous years, urged for the renovation of the country’s four refineries to cut importation costs, exorbitant subsidies, which according to them, would in-turn boost the country’s economic indices.
Despite the scarcity, civil society groups have called on the government for damage compemsation caused by the excessive methanol fuel.
Also, NNPC has stated it will sue foreign companies that supplied contaminated products.