LAGOS - For months, a gasoline shortage has left Nigerian drivers waiting in hours-long lines to fill their tanks. A planned, nearly 70 percent price hike may help keep the pumps flowing, but could spill over into other parts of the economy.
Under a new price regimen announced this week by the petroleum ministry, the government will encourage Nigeria’s gasoline importers to boost their supply and end the shortages, which have sent lines snaking out of gas stations across the country, snarling traffic and frustrating drivers.
In Nigeria’s largest city Lagos, drivers were waiting along roadsides to fill their tanks Thursday. Many said they were willing to pay more if it meant they wouldn’t have to wait in fuel lines for hours.
“If they should increase the price and let the scarcity of fuel dissolve, fine,” said Uchenna Nze, a bank employee.
Others were worried the price increase would cause jumps in the cost of staple household goods.
“The basic necessity of life is food, shelter and clothing ... by tomorrow will increase in the market,” said Femi Adi, a carpenter in the northern city of Kaduna.
Despite being one of Africa’s top petroleum producers, Nigeria imports most of its gasoline, because its four refineries can’t satisfy demand.
A shortage of foreign exchange to pay for imported fuel led to the nationwide scarcity of fuel.
Bismarck Rewane, chief executive officer of Financial Derivatives Company Limited, said the new pricing would suppress demand and end hording by drivers worried about when they could next fill up their tanks.
“By increasing the price and reducing the fear factor, you’ll find the demand will drop and the supply will more than meet the adequate [level] of the demand,” Rewane said.
He predicted the price would reduce over time as gas stations competed with each other to attract consumers.
A major organized labor group, the Nigeria Labour Congress, blasted the fuel price increase, saying in a statement the hike “represents the height of insensitivity and impunity.”
Ayuba Wabba, NLC president, said Nigerian workers are suffering because of rising prices.
The utility regulator increased electricity prices this year, and inflation has been climbing, reaching almost 13 percent in March.
“Any other increase in any commodity or any service will have a direct impact on the working class, because of the fact their purchasing power has been reduced.”
Wabba said the NLC would meet on Friday to discuss its response to the fuel hike.
A similar hike in gasoline prices in 2012 sparked street protests across Nigeria that ended when the government reversed its decision.
Wabba declined to say if the NLC would consider calling a strike.
Ibrahima Yakubu contributed reporting from Kaduna, Nigeria.