The Impact of Fuel Scarcity on Nigeria Economy

The Impact Fuel Scarcity on Nigeria Economy

ABSTRACT

This research is based on the economic effects of fuel scarcity in Nigeria. The research was carried out to find out the extent to which the entire population in the Enugu metropolis has suffered due to fuel scarcity. The population used for this study is the workers of NNPPC, car owners, businessmen and women, and the entire population of the Enugu metropolis. The researcher used primary and secondary data which comprised of interviews and questionnaires to get information. From the data analysis, the researcher came up with the following findings: The middlemen contribute to fuel scarcity, Transportation became high because of fuel scarcity, Fuel scarcity has led to a rise in the price of products in the market. Based on the findings, the researcher recommends that: The government should hurry up with the maintenance of the broken down refineries to ease the problem of fuel scarcity. Pipelines that led to the various depots should be checked regularly for any possibility of leakage. To avoid fuel scarcity, escorts should be assigned to each tanker driver to avoid diverting fuel to unapproved areas. They should provide storage facilities so that even if brake down occurs, there will still be available fuel to distribute to their various consumers. If fuel is being supplied to filling station owners, it should be checked to make sure that the fuel is sold to the consumers to avoid hoarding. There should be a check by the government to the seller of fuel to make sure that fuel are been sold to the consumer at a government pump price.

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

This is to say that in the past Nigerians solely depended on the exportation of agricultural products for their source of income.  This continued until the discovery of the presence of oil in our country, especially in part Harcourt. This made them (Nigerians) divert from Agriculture to the exportation of oil to other countries, which was fetching them much money even till this present time.

There are many subsidiary oil companies scattered all over the country but the biggest among them is in port-Harcourt and it is called the Nigerian National Petroleum Company (NNPC). It is from here that crude oil is extracted from the ground refined to get those components like fuel, kerosene, and gas.

There are depots scattered all over the country like shell Port-Harcourt, NNPC Enugu, Eif oil Company, Warri Pipeline are directed towards these oil companies to facilitate distribution. Tanker drivers and other dealers will load from the depot and distribute to filling stations, then the consumers will buy from the filling stations.

Fuel supply has been moving smoothly in the country before the announcement of the budget by the head of state in January last four years 1999. It was in February 1999 that the whole issue of fuel scarcity started.  This has made it difficult for the government to accomplish that, which is proposed to do the budget.

1.2 STATEMENT OF THE PROBLEM

The word “Scarcity” means when something is insufficient. Since fuel is insufficient it is termed as fuel scarcity.

In the past, there has not been any services fuel scarcity, everything was moving smoothly, the industrialist both public and privates, does not have any problem.  Economically the price of goods and services was affordable by the people. Car owners can just go to the filling station and buy fuel at a normal price of N22.00 per liter and with much ease.

Things were moving smoothly in the country and this part of Enugu metropolis until 1994 when we had one case of fuel scarcity till this moment of this study.

Because of fuel scarcity, people are so desperate to buy fuel for their businesses. For these reasons, whenever any information was passed concerning the presence of fuel in any filling station, car owners will go there and queue -up. Some of them will have to sleep in the filling stations a day or more than two days while waiting for their turn.  People or car owners when they cannot buy fuel in any filling station, are forced to buy from the black market at an exorbitant price.  Some people use big gallons to buy fuel that will serve them for some days.

For the reason that there is insufficient fuel in the filling station, makes people sell fuel in ration so that everybody present will buy.  The car owners who think the fuel will not reach them will start jumping the queue, thereby causing fights among themselves.  Because of this reason, the filling station owners invite soldiers so that there will be peace and orderly queue in the filling stations. Fuel scarcity is sometimes artificial in the sense that during the Christmas period. Filling station owners will just hoard their fuel to sell at a high price.

1.3 OBJECTIVES OF THE STUDY

This study has the following objectives:

– To find out the causes of fuel scarcity.

– To recommend what can be done to solve the problem of fuel scarcity.

– To find out how the fuel scarcity has affected the businessmen and women civil servants etc. (the total population of Enugu metropolis).

1.4 RESEARCH QUESTIONS

The following research questions were formulated by the researcher:

– What are the economic effect of fuel scarcity in Nigeria?

– What are the causes of fuel scarcity?

– To what extent has fuel scarcity has affected the businessmen and women civil servants in the Enugu metropolis?

– What are the possible solutions to the problems of fuel scarcity in Nigeria?