Nigeria deployed police and soldiers to gasoline stations to maintain order as fuel shortages grip Africa’s biggest oil producer, Bloomberg reported.
The most severe fuel scarcity in a year in Africa’s most populous nation has left motorists paying more than double the government’s official price for gasoline and put increasing pressure on a stagnating economy that has been hit by tumbling oil prices. The national statistics office blames the shortages, which have been on and off since May and have peaked in March, for contributing to an 8% drop in labor productivity in the fourth quarter.
“The fuel industry is holding the whole economy to ransom,” Nema Ramkhelawan-Bhana, an analyst at Rand Merchant Bank in Johannesburg, was quoted by The Business Times as saying. “Nigeria is already suffering from low oil prices, and now fuel shortages are exacerbating the problem.”
Morewover, the latest fuel crisis has been worsened by central bank foreign-exchange controls that have left retailers paying higher costs to import supplies at a time when President Muhammadu Buhari’s government has removed subsidies. While Nigeria is pumping more than 1.8m b/d, the West African nation doesn’t have adequate refining capacity and imports at least 70% of demand.