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Fuel Scarcity Grips Lagos and Abuja as Oil Marketers Face Challenges

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Petrol - Investors King

Residents of Lagos and its environs are facing yet another bout of petrol scarcity with many oil marketers closing their outlets to motorists and buyers.

This troubling situation has also affected the nation’s capital, Abuja, and surrounding areas.

The recent scarcity in Abuja was initially attributed to poor road conditions and the high cost of diesel required for distribution, but the situation has now extended to Lagos.

This crisis has left only NNPC Limited, the national oil company, available to serve customers in most parts of Lagos.

The root causes of this renewed scarcity can be traced to market uncertainties and the lack of foreign exchange.

Currently, the informal exchange rate stands at over N1,000/dollar, making it financially unviable for other operators to import petrol despite deregulation.

In response to the crisis, Chinedu Okoronkwo, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), indicated that measures are being taken to help oil marketers access foreign exchange at a more sustainable rate.

However, in Abuja, major marketers have taken matters into their own hands by raising pump prices from N615 per liter to N625 per litre.

The situation has been exacerbated by the reliance on NNPC as the sole importer of petrol, creating a bottleneck in the supply chain.

Chinedu Ukadike, the Public Relations Officer of IPMAN, explained, “Most private depots depend on the NNPC for their supplies. This arrangement encourages profiteering and has caused difficulties in picking products from NNPC, leading to the current scarcity.”

NNPC’s Managing Director reassured that they are expecting new supplies, but the issue of petrol scarcity still looms large. As depot owners grapple with increased costs of crude oil and exchange rates, many are unable to secure the necessary loans due to high-interest rates, further intensifying the challenges faced by the downstream sector.

This petrol scarcity serves as a stark reminder of the fragility of Nigeria’s fuel supply chain and the need for sustainable solutions to address the nation’s energy demands.

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Economy

NLNG Boosts Cooking Gas Production to 1.5 Million Metric Tonnes Annually

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cooking gas cylinder

Nigeria Liquefied Natural Gas Limited (NLNG) has announced a significant milestone in its operations, boosting its annual production of liquefied petroleum gas (LPG), commonly known as cooking gas, to over 1.5 million metric tonnes.

This surge in production underscores NLNG’s commitment to meeting the rising demand for clean cooking energy in Nigeria.

The entirety of NLNG’s 1.5 million tonnes production is now being sold domestically within Nigeria.

Moreover, the company has initiated a landmark shift by starting to supply LPG in naira, moving away from the traditional practice of trading in United States dollars.

This move aligns with calls from stakeholders in the oil and power sectors advocating for naira transactions, especially amidst the challenges posed by currency fluctuations.

During a panel session at the 7th Nigeria International Energy Summit in Abuja, NLNG’s General Manager of Finance, Fatima Adanan, highlighted the company’s dedication to enhancing LPG penetration across the country.

Adanan emphasized NLNG’s vision to make Nigeria a better place by promoting the use of cleaner energy sources like gas.

While NLNG’s production surge is commendable, Adanan acknowledged that Nigeria’s LPG requirements surpass the current output, necessitating imports to bridge the gap.

However, NLNG remains committed to expanding its production capacity to meet the nation’s energy needs and drive increased adoption of LPG as a cleaner cooking fuel.

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Economy

CBN Raises Benchmark Interest Rate by 400 Basis Points to 22.75%

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has raised the benchmark interest rate by 400 basis points to a record 22.75%.

The decision made by the Monetary Policy Committee (MPC) comes amidst rising inflationary pressures and growing uncertainty in Africa’s largest economy.

Nigeria’s inflation rate rose to 29.90% in January 2024, the highest in over two decades while the nation’s unemployment rate quickened to 5% in the third quarter of 2023. Suggesting that the rising costs have continued to drag on both new job creation and the existing ones.

This coupled with a series of policy adjustments implemented by President Bola Ahmed Tinubu has plunged economic productivity and eroded consumer spending as citizens grapple with high fuel prices, electricity tariffs, a record-high foreign exchange rate, and insecurities.

Therefore, it is surprising that the Monetary Policy Committee (MPC) led by the CBN will further increase borrowing costs by 400 basis points at a time when job creation is paramount.

While the economy reportedly grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, this growth is yet to crystalise as businesses and citizens have taken to the street protest against the harsh economic situation.

Economic experts have started questioning the data from the National Bureau of Statistics (NBS) given its lack of correlation between the data and economic reality.

 

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Economy

President Tinubu Unveils Geometric Power Plant in Aba After 20-Year Wait

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Geometric Power Plant

After two decades of anticipation, President Bola Tinubu, through his representative Vice President Kashim Shettima, inaugurated the long-awaited Geometric Power Plant in Aba, a significant milestone in the city’s quest for reliable electricity supply.

The event, which also saw the commissioning of three rehabilitated roads by Abia State Governor Alex Otti, symbolizes the culmination of years of perseverance and determination to transform Aba’s power landscape.

Addressing the audience, Vice President Shettima hailed the project as a testament to the power of visionary leadership and unwavering commitment to progress.

He said the Geometric Power Plant exemplifies the transformative impact of strategic infrastructure investments on local communities.

Governor Otti echoed similar sentiments, emphasizing the importance of the power project in positioning Aba as a hub for national and international business ventures.

He commended the efforts of Geometric Power Limited while urging them to uphold transparency and avoid exploiting consumers.

The inauguration of the Geometric Power Plant comes amidst growing concerns over Nigeria’s power infrastructure and the need for sustainable solutions to address electricity shortages.

The project, with a capacity of 188MW, holds promise for significant improvements in power supply across Abia State, benefitting nine out of seventeen local government areas.

The Managing Director of Geometric Power Limited, Ben Caven, underscored the scale of investment involved, totaling $800 million.

He highlighted the comprehensive nature of the project, which includes the installation of new power substations and a 27km natural gas pipeline, signaling a comprehensive approach to enhancing Aba’s energy infrastructure.

In conclusion, the inauguration of the Geometric Power Plant represents a transformative moment for Aba, offering renewed hope for economic growth and prosperity powered by reliable electricity supply.

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