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Fuel Shortages in Nigeria Could Affect Economy, Election

  • Henry Ridgwell

Nigeria is suffering from a gasoline shortage as falling oil prices have affected the country’s ability to import and distribute refined fuels. Coming just weeks before elections scheduled for March 28, the shortage could have a big impact on the campaign trail.

In Abuja, the lines of cars waiting for gas are growing longer. Acute fuel shortages are gripping towns and cities across the country. Workers reliant on their cars are losing money fast - like taxi driver Bartholomew Ode Akpa.

“I work at the airport as a car hire and now I'm supposed to be at the airport and there is no fuel for me to go and look for something to do,” he said.

Nigeria is one of the world's top producers of crude oil, and exports around 2 million barrels per day. But it doesn’t have the refinery capacity to meet fuel demand, so it relies on imports. That makes the country vulnerable to a turbulent market, says Virginia Comolli of the International Institute for Strategic Studies.

“Although Nigeria has tried over the past few years to diversify its economy, 80 percent of government revenues are still dependent on the oil industry,” said Comolli.

The falling oil price has hit Nigeria's currency, the naira - and traders say government fuel subsidies are not being paid.

The CEO of the Seplat Petroleum Development Company, Austin Avuru, is calling on the government to boost domestic refining capacity.

“Then you find out that the boom and bust elements of changes in crude oil prices will have much more negligible impact on our GDP growth than we are having today, and I think that's how our country should be moving in terms of how they manage their natural resources,” said Avuru.

Nigerian Minister of Aviation Osita Benjamin Chidoka told VOA President Goodluck Jonathan was trying to reduce Nigeria's dependence on crude oil production.

“One of our major foreign currency earners is oil. But it is also an opportunity for Nigeria. It creates an opportunity for us that luckily our President has committed to improving agriculture over the past few years. Diversifying the economy, removing the subsidies that are kind of willing a dependency culture,” said Chidoka.

The timing is difficult for President Goodluck Jonathan as he campaigns, trying to secure another four years in office. The elections have already been postponed once due to insecurity caused by the Boko Haram insurgency.

It’s not only Nigeria that is suffering, says Virginia Comolli.

“Other regional countries, countries that export their goods into Nigeria, will suffer from a reduction in demand from the Nigerian market,” said Comolli.

Analysts warn that continued low oil prices have the potential to cause unrest, because the government will be forced to cut back on public spending.