Nigerians are currently experiencing another round of fuel scarcity, and the situation which started last week is showing no signs of abating. In Lagos, most filling stations visited on Sunday were out of stock, while those selling had long queues of vehicles at their stations. The situation is the same in other cities around the country with only a handful of petrol stations selling fuel.
1) Scarcity of Dollar:
The scarcity of the dollar has been an issue for a while now, partly due to the exclusion of the Bureaux de Change operators from accessing Nigeria’s forex market. The CBN last month banned them from accessing its official window citing various infractions including round tripping and hoarding of dollars.
According to an interview conducted by Tribune, the marketers are finding it difficult to source for dollars to finance importation of petroleum products. The major issue is that the CBN cannot guarantee all the dollar demand to be used for importation by the marketers, so a lot of them rely on allocation from the Nigerian National Petroleum Corporation, which is the main importer of fuel.
“it is more expensive to source for dollars and finance imports with such dollars. “There is a price width which we must not exceed”. A marketer said.
2) NNPC’s Delay In Signing Crude Oil Swaps:
NNPC’s delay in signing the crude oil swap agreements is also a major cause of the fuel scarcity. According to a report in Reuters, NNPC have been trying to sign additional long-term contracts to cover well beyond the 210,000 bpd of oil that was exchanged in the past.
The report also showed that their are some 200,000 tonnes of petrol berthed offshore Nigeria, but this covers just over a week of consumption in Nigeria, while new March bookings have slowed to just over 100,000 tonnes, which is not close to the level required to service the country.
As the persistent volatility in the value of the Naira against the Dollar continues,the oil marketers would only try to bring in fuel if they have the swap contracts in hand, but otherwise would just wait and see how things unfold.