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Fuel Scarcity: Traders, Others Lament High Transportation Costs

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Shell filling station In Nigeria
  • Fuel Scarcity: Traders, Others Lament High Transportation Costs

The fuel scarcity that started shortly before Christmas has registered its expected impact on the prices of items in the market owing to the attendant hike in transportation costs.

According to the Chairman, Ikeja Shop Owners Association, Mr. John Okonkwo, in the past one week fares have gone up by as much as 25 per cent and this has informed an increase in the prices of items sold in the market.

Okonkwo said that the items that sold at N800 before now were being sold for N1,200 while those sold previously for N1,000 had gone up to N1,500.

He said people bringing goods from the rural hinterland complained that the cost of transportation was too high and they had to increase the price of their produce.

On Sunday, there were reports of a nationwide increase in food prices due to the fuel scarcity.

For instance, the News Agency of Nigeria reported that in Owerri, a basket of tomatoes, which sold for N6,000 increased to N10,000 while price of red pepper rose from N5,500 to N8,000/basket.

There was equally an increase in the prices of items used for seasoning and garnishing food during the festive season, such as onions, reported to have increased from between N17, 000 and N21,000/bag to N28, 000 and N35,000.

A medium-sized yam tuber increased from N500 to N700 while smaller sizes increased from N200 to N400.

The report also noted a rise in prices of vegetable oil, turkey and rice.

The hike in transportation costs also affected exporters who found it challenging and very expensive to procure produce from the rural hinterland.

The Secretary General of the Cashew Association of Nigeria, Mr. Sotonye Anga, confirmed this to our correspondent on the telephone.

He said that farmers who brought produce from the villages complained of high fares and had to increase the prices of the produce.

Importers said moving cargoes from Lagos to various locations in the country was also an uphill task as transportation costs had become unbearably high.

The Chairman, International Freight Forwarders Association, PTML Chapter, Mr. Sunny Nnebe, said apart from the fact that transporters had increased the cost of carrying a 20-feet container from N70,000 to N200,000 owing to the gridlock at the Apapa ports, in the past few days, there had been additional increase in the costs of transporting cargoes to various locations in the country.

Travellers bound for the East reportedly spent N18,000 on transportation from Lagos to Cross River State while a bus trip to Owerri and other eastern cities ranged from N12,000 to N15,000.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns

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Crude oil

Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.

Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.

The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.

This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.

While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.

Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.

Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.

Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.

Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.

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Crude Oil

Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm

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Dangote Refinery

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.

Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.

The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.

However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.

Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.

He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.

Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.

The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.

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Energy

NNPCL Pledges End to Nigeria’s Energy Scarcity Within a Decade

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Mele Kyari - Investors King

The Nigerian National Petroleum Company Limited (NNPCL) has announced a bold initiative aimed at ending Nigeria’s persistent energy scarcity within the next decade.

Mele Kyari, the Group Chief Executive Officer of NNPCL, revealed this ambitious plan during the opening ceremony of the seventh Nigerian International Energy Summit in Abuja.

Kyari’s announcement comes as a beacon of hope for millions of Nigerians grappling with chronic power shortages and energy deficiencies.

In his statement, Kyari expressed confidence that all issues related to energy scarcity in the country would be resolved within the next 10 years.

Assuring stakeholders of NNPCL’s unwavering commitment, Kyari emphasized the company’s dedication to collaborating with partners to bridge the energy deficit gap and foster prosperity for all Nigerians.

He highlighted NNPCL’s pivotal role as a key partner to oil-producing companies in Nigeria, facilitating the divestment of international oil companies from onshore and shallow water assets in the country.

Furthermore, Kyari underscored NNPCL’s statutory mandate as the enabler of national energy security, emphasizing the importance of sustainable production from divested assets to ensure energy security for Nigerians.

In addition to addressing domestic energy challenges, NNPCL is also exploring avenues for sustainable energy investment across Africa.

Kyari revealed the company’s intention to invest in the proposed African Energy Bank, aiming to secure funding for energy projects on the continent and guarantee regional energy security.

The event, attended by prominent stakeholders including government officials and representatives from international organizations, marks a significant step towards reshaping Nigeria’s energy landscape and fostering economic development through improved energy access.

As NNPCL charts its course towards energy abundance, Nigerians remain cautiously optimistic about the prospects of a brighter energy future.

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