Economy
Nigeria Hit with the Worst Fuel Scarcity Yet
Nigeria is the main oil producer in Africa and is currently the continent’s largest crude oil exporter. This status however holds no value for Nigerians who have now been accustomed to fuel scarcity in varying degrees being a constant challenge.
In 2024 alone, the country has been hit with two fuel scarcity crises. The first occurred from April to May when the fuel cost increased by 68.01% on a year-on-year basis from N842. 25 per litre in April 2023 to N1415. 06 per litre in April 2024. The second crisis is ongoing. It has seen the petrol price rise to N1,050 per liter in a matter of days from the average of N770.54 recorded in July 2024. This fuel scarcity is another addition to the ongoing cost of living crisis Africa’s largest economy is experiencing.
Nigeria’s Cost of Living Crisis Continues to Soar
During his inaugural speech on May 29, 2023, President Tinubu announced an end to fuel subsidies in the country, citing that continuing subsidies were unsustainable and a drain on public finances. The president acknowledged in another address on June 12, 2023, that although halting the subsidies added a burden on the people of Nigeria it was crucial to the country’s economic survival. Over a year after this bold move by the government, most Nigerians are struggling to make ends meet sparking protests across the country.
NOIPolls, an independent pollster in West Africa disclosed in 2023 that 63% of adult Nigerians surveyed across the country desire to relocate to other countries. The lack of economic opportunities is the primary motivator for leaving Nigeria. As the “Japa”— a colloquial term for emigration— itch among Nigerians intensifies, the youth who can’t leave have sought to earn an income remotely working for foreign companies, gambling on international online casinos, and working multiple low-level jobs.
The prices of food, cooking gas, medication, and public transport have risen since President Tinubu assumed office in May 2023. This rising cost of living has been a result of the naira’s poor performance against the dollar and the instability of the country’s economy. Nigerians have had to survive through high levels of inflation not experienced before in the country for three decades.
According to the World Food Programme, 26.5 million people across the country are projected to face acute hunger between June and August 2024. This is an almost 40% increase from the 18.6 million Nigerians recorded to have faced food insecurity at the end of 2023. This new fuel scarcity crisis has seen Nigerians make long queues at filling stations to access petrol, led to significant increases in transport fares, and resulted in losses for businesses that rely on fuel to power them.
NNPC Explains Cause of Current Fuel Scarcity
In response to rising concerns about fuel scarcity in the country, the Nigerian National Petroleum Corporation Limited (NNPCL) through Dapo Segun, the Vice President, attributed the ongoing fuel scarcity to the impact of the recent heavy rains, lightning, and thunderstorms across the country. Mr Segun explained that the rains had caused saltation in the Estragos channel making navigation difficult and thus hindering the transportation of petroleum products across the country. Additionally, Seun reported that fuel discharge from both onshore and tankers had been suspended occasionally due to lightning and thunderstorms. These three natural extreme weather conditions have made distributing petroleum products across the country challenging.
As the NNPCL vows to resolve the fuel scarcity crisis soon, Nigerians are looking to two other refineries that were set to begin operations to ease the cost of fuel burden. The Dangote Refinery is expected to begin selling petrol in Nigeria by the end of this August. The chairman of the Dangote Group, Aliko Danknote, who had committed to this milestone is positive that his company will meet the target. Additionally, the Port Harcourt refinery is expected to be operational and supplying petroleum products across the country by September 2024 as assured by the group chief executive officer of the NNPCL, Mele Kyari. This will be the third time the refinery’s operational month has been moved this year following its mechanical completion in December 2023.
The Independent Petroleum Marketers Association of Nigeria (IPMAN), on the other hand, has accused the NNPCL of actively contributing to fuel scarcity by failing to provide petroleum products to its members even after payment. IPMAN disclosed that even though payment to the state oil company was made three months ago members have been forced to purchase petroleum products from private depots whose prices are significantly higher. IPMAN is now calling on the government and other key stakeholders in the oil industry to intervene in the situation to lessen these hardships.
Citizens of Africa’s largest crude oil producer and exporter are now no longer surprised by fuel scarcity in their cities. While many try to find ways to survive under the new economic hardships, others opt to leave the country in search of greener pastures. It is evident that Africa’s largest economy is on the brink of collapsing should the government not turn around the economic situation soon.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Dipo Olowookere
For the fourth consecutive trading session, the Nigerian Exchange (NGX) Limited closed higher on Friday by 0.63 per cent on sustained renewed buying pressure.
Apart from the energy and industrial goods sectors which closed flat, every other sector ended in the green territory, according to data obtained from the bourse.
Business Post reports that the insurance index appreciated by 1.52 per cent, the banking space improved by 0.63 per cent, and the consumer goods counter expanded by 0.46 per cent.
As a result, the All-Share Index (ASI) gained 617.47 points to settle at 99,378.06 points compared with the preceding day’s 98,760.59 points and the market capitalisation went up by 375 billion to close at N60.242 trillion, in contrast to Thursday’s closing value of N59.867 trillion.
The volume of transactions on Customs Street yesterday grew by 11.13 per cent to 544.2 million shares from the 489.7 million shares transacted a day earlier.
The value of transactions increased during the session by 49.30 per cent to N10.6 billion from N7.1 billion and the number of deals went up by 1.93 per cent to 8,464 deals from the 8,304 deals posted in the previous trading session.
The busiest equity for the trading day was Japaul with the sale of 71.7 million units valued at N158.0 million, eTranzact exchanged 70.7 million units worth N477.5 million, Tantalizers sold 57.3 million units for N101.2 million, FCMB traded 33.0 million units worth N297.3 million, and Universal Insurance transacted 27.1 million units valued at N9.6 million.
A total of 36 stocks ended on the gainers’ chart, while 15 stocks finished on the losers’ table, indicating a positive market breadth index and strong investor sentiment.
The trio of Aradel Holdings, Ikeja Hotel and Caverton gained 10.00 per cent each to trade at N550.00, N8.80, and N1.98, respectively, as Africa Prudential rose by 9.87 per cent to N17.25 and Golden Guinea Breweries soared by 9.64 per cent to N8.64.
On the flip side, Austin Laz lost 10.00 per cent to close at N1.62, ABC Transport crashed by 8.00 per cent to N1.15, Royal Exchange slumped by 7.69 per cent to 60 Kobo, Secure Electronic Technology plunged by 5.26 per cent to 54 Kobo, and The Initiates crumbled by 4.26 per cent to N2.25.
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