Persistent fuel scarcity, price increases, and way forward in Nigeria

Persistent fuel scarcity, price increases, and way forward in Nigeria

Engr. Kazeem Babalola Olawale and Emmanuel Simon Yayock
Department of Automobile Technology, School of Secondary Education (Technical), Federal College of Education (Technical) Bichi, Kano State, Nigeria
DOI: https://doi.org/10.51584/IJRIAS.2023.8508

Received: 29 April 2023; Revised: 06 May 2023; Accepted: 11 May 2023; Published: 09 June 2023

Abstract: The scarcity and regular increase in the price of petroleum products in Nigeria has significant negative effects on businesses, the transportation sector, and the economy as a whole. Businesses suffer as they have to spend more on transportation and energy costs, which reduces their profit margins. This increase in costs is often passed on to consumers, leading to inflation and a decrease in consumer purchasing power. The transportation sector is also heavily affected by petroleum product scarcity and price increases, as fuel costs are a significant part of their operational expenses. This leads to higher transportation costs for goods and passengers, which ultimately affects the prices of goods and services across the economy. Furthermore, the Nigerian economy is heavily reliant on oil revenue, and any disruptions in the production and distribution of petroleum products can have severe consequences for the government’s revenue and overall economic growth. The way forward for Nigeria is to diversify its economy and reduce its dependence on oil as its primary source of revenue. This can be achieved by investing in other sectors such as agriculture, manufacturing, and technology. Additionally, the government can work towards improving the country’s infrastructure, particularly in the area of transportation, to reduce the impact of fuel scarcity and price increases on businesses and the economy. Finally, there needs to be an increased focus on developing and implementing alternative and renewable energy sources to reduce the country’s dependence on fossil fuels.

Keywords: Fuel scarcity, price increases, petroleum products, oil producer, and fuel subsidies

I. Introduction

Persistent fuel scarcity and inconsistent price increases have been major problems in Nigeria for many years (Agiri & Morka, 2018). The country, which is a major oil producer, is struggling to maintain a stable and reliable fuel supply due to a variety of factors, including poor infrastructure, inadequate refining capacity, corruption, and inefficiencies in the distribution chain (Olaseni & Alade, 2012). The situation has been compounded by frequent price increases that have made fuel unaffordable for many Nigerians. Ironically, Nigeria has been able to maintain its position as Africa’s largest oil producer for two consecutive months, as it produced 1.3 million barrels per day in December 2022, according to the Organization of Petroleum Exporting Countries (OPEC). However, the persistent fuel shortage and uncontrolled prices are challenges facing people to get gasoline to either fuel their cars or run electricity generators (Oyedepo, 2012). The most unfortunate situation amid this shortage is the unjustified price increase from the government-approved pump price to prices that satisfy individual dealers based on location and patronage.

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