‘Fuel subsidy is gone,’ President Bola Ahmed Tinubu announced to Nigerians in his inaugural speech on 29 May 2023. 

From that moment, fuel became the new gold. Tinubu won the election on the promise to renew the hope of the masses. However, it seems like a fluke.

Before subsidy removal (May 2023), fuel per litre was ₦198/₦200; after the inauguration, it rose to ₦617 per litre (May 2023). 

Fuel scarcity has always been a problem in Nigeria, but has never been this severe. It is now at an all-time high, selling for about ₦1300 in some parts of the country.

Before Tinubu’s government, the previous administration made efforts to fight fuel scarcity through the Petroleum Industry Act, but it was unsuccessful. 

The government has failed to provide a convincing explanation for the ongoing fuel scarcity, which has aggravated the country’s already dire economic conditions.

This administration has not offered any solutions for the problems it has caused Nigerians, for an administration that has spent millions of dollars renovating presidential lodges and planes.

It is already a shame that the world’s sixth-largest crude oil producer cannot refine its petroleum products. Nigeria boasts some of the highest-quality crude oil.

However, as with many other areas, we export our best resources only to purchase these same resources back from others. Despite having an abundance of crude oil in the Niger Delta’s creeks, we now import finished petroleum products, including the very petrol we have in surplus.

NNPC Limited, the exclusive importer of finished products and holder of a monopoly in this area, was indebted to gasoline suppliers for over $6 billion. This debt led traders to withdraw, causing a fuel shortage in the country.

According to the contract terms, NNPC Limited is supposed to make payments within 90 days of delivery; otherwise, traders are entitled to a late payment compensation of $250,000 per shipment.

Sadly, the presidency is not presented with many options. Either the government continues paying subsidies, or we refine our crude oil locally.

Since the government-owned refineries in Port Harcourt, Warri, and Kaduna are not functional, Billionaire industrialist Aliko Dangote stepped up to the task of running a refinery locally for the first time in 28 years. 

Here are the effects of fuel scarcity on Nigerians:

1. Fuel Scarcity 

Fuel scarcity significantly impacts the cost of living, creating a ripple effect that touches various aspects of daily life. When fuel is scarce, its price often rises due to supply-demand imbalances. 

2. Hiked Fuel Prices

Higher fuel prices lead to increased transportation costs for both individuals and businesses. For commuters, this means higher travel expenses to work or other destinations. Public transportation fares will also increase, further straining household budgets. For businesses, the cost of shipping goods and transporting employees rises, which will be passed on to consumers in the form of higher prices for products and services.

3. Economic Disruption

Fuel scarcity can lead to economic disruptions, including reduced productivity and job losses. Industries dependent on consistent fuel supply, such as manufacturing and agriculture, may face operational challenges. This can result in lower economic output and potential layoffs, reducing household income and increasing financial strain on affected families.

4. Higher Cost of Goods and Services

The increase in transportation and production costs due to fuel scarcity affects the entire supply chain. Retailers and service providers are forced to raise prices to cover their increased expenses. As a result, consumers face higher costs for essentials such as food, clothing, and healthcare. Services that rely on transportation, such as delivery and ride-sharing, also experience price hikes, further impacting household budgets.