Lingering fuel scarcity and agricultural production in Nigeria

As fuel scarcity continues, the agriculture sector is seriously affected because the prices of food items in the country have skyrocketed as a result of an increase in transport fares in the country.

Although, there has been an increase in the prices of almost every other good and services in the country for some time now, the fuel crisis has worsened the situation despite promises by the government to put an end to the scarcity.

Checks in some markets and food selling points in Osun State, Abuja, Lagos State and other states by FarmingFarmerFarms show that there had been a rise in the prices of food. The price surge affects staples like rice, beans, garri and yam, among others.

“The fuel scarcity is affecting me seriously. Before now, I used to pay N1,000 to convey these goods from my house to this place, but now, I am paying between N1,800 to N2,000, just to convey them down here”, Odetunde Tayo, a roadside food vendor at Sabo area in Ile-Ife, said.

Fuel Issues
The crisis started last two year after the government said it would remove fuel subsidies to save revenue. As a result, marketers began to reduce the amount of fuel they sold. This continued even after the government announced a reversal of the plan. The scarcity became worse in February last year when the Federal Government said its agents had imported substandard fuel. Transport fares have since increased across the country.

In Osun, from Osogbo to Ile-Ife is now N700 against the previous price of N400. Traders have passed the increased fares to customers and their products have, therefore, become more expensive. A container of yellow ‘garri’ that was N350 in 2022 is now N500 and white garri now goes for N350 against its previous price of N200. Similarly, five tubers of yam now cost N5,000 from N3500, while a mudu of rice that was N900 before, now goes for N1,400. Also, one litre of palm oil that was N700 is now N750, 25kg of groundnut oil is now N34,000 from N23,000 and a crate of eggs is now N1,800 from N1,500.

Sources
A senior official in the Ministry of Petroleum Resources, who spoke on condition of anonymity with a leading newspaper, said the fuel scarcity might get worse in the days and weeks to come as there were many issues affecting the smooth supply of the product across the country.

According to him, the inability of the NNPC Limited to import sufficient volume of Premium Motor Spirit (petrol) is primarily responsible for the current scarcity.

He explained that the NNPCL did not have sufficient funds to import the required quantity of fuel for domestic consumption and the situation was compounded by the falling value of the naira as the company had to source for scarce forex to buy petrol from abroad and pay shipowners, who convey it to the country.

The official stated, “The dollar issue is a major problem as the NNPCL is running helter-skelter to get forex to import fuel, yet the product cannot be sold at the market value; so, it is bearing some part of the cost in the form of subsidy. You can’t get products at higher rates and sell at lower rates and there won’t be crises. The Federal Government is worried that the removal of subsidy close to the general elections will be disastrous as the organised labour will mobilise the citizens to resist it and the security agencies may not be able to contain the attendant upheaval. The source also explained that the inability of the country to produce enough crude oil to meet its Organisation of Petroleum Export Countries’ quota was another problem, noting that insecurity and crude theft had significantly affected the production capacity”.

He added, “Another issue is the failure of the crude swap for refined products deal that the Nigerian National Petroleum Company Limited (NNPCL) had with major international oil firms and traders. The inability of the NNPCL to meet its own side of the deal by supplying the required quantity of crude has frustrated the arrangement. While Nigeria has been taking refined products from the partners, it has not been able to supply the crude equivalent and the international firms and traders have stopped shipping products to the country. Oil marketers also alluded to the problems in the downstream sector and predicted that the current scarcity would not abate until the government comes out with a clear position on subsidy removal, full deregulation and price determination. They also faulted the claim by the Federal Government that it had not increased the pump price of petrol, as they continued dispensing the commodity at exorbitant rates.”

The Minister of State for Petroleum Resources, Chief Timipre Sylva, had announced that President Muhammadu Buhari did not approve any hike in petrol price.

This was after oil marketers stated that the government might have commenced the gradual removal of subsidy on petrol, as they stated that the cost of Premium Motor Spirit was raised from N175/litre to N185/litre.

The Executive Director, Distribution Systems, Storage and Retail Infrastructure of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Ogbugo Ukoha, said the authority would continue to collaborate with the NNPCL and other stakeholders to ensure seamless and efficient supply and distribution of petroleum products nationwide.

Ukoha said, to ensure more product availability at filling stations, a total of 121 trucks were dispatched from the Suleja Depot to filling stations within Abuja and neighbouring states with an assurance that the tightness in terms of distribution would soon ease.

It was found that queues in the few outlets that had the product were still long. Many filling stations in Osun, Lagos, Oyo, Abuja, Nasarawa, Niger and neighbouring states were closed due to lack of products to dispense.

In the few filling stations selling the product in Lagos, motorists spent several hours on queues and those, who managed to buy petrol paid far above the official rate.

Traders Talk
According to Salaudeen Ahmed, a yam seller in Ile-Ife, said the increase in the price of yam is a result of insecurity and the current fuel scarcity in the country.

He said, “Yam is expensive now; the farmers-herders fight and the current fuel scarcity situation is affecting the price of yam. Where we normally buy yam in Niger State, there is a fight going on there, so getting products from there is difficult. Even the first set of yams we sent, they are inside a bush now in Niger State, the driver and passengers ran and left the car with yam inside in the bush because of the fight. So, these ones I am selling, I bought them from another market, not directly from the farmers, so they are a bit expensive now. Also, the transport fare to bring them down here is high now. For instance, these small ones are N2,500 for five tubers. Initially, we used to sell that size N1,500”.

Victoria Ene, a food vendor, said the changes in the price of food items and transport fare had affected how she sells food now.

“Initially, I used to sell a plate of food for N250, but now it is N400 and N500 depending on the number of meat I add for you. 25kg of groundnut oil that I used to buy N22,000 or N23,000 before, now it is N34,000, 5kg of semolina before was N5,000 or N4,500, but now it is N5,500 and N6,000 in the market. Even 25kg of palm oil that I used to buy at N19,000 before is now N24,000 or N25,000. Checks also confirmed that there is at least a 50 to 60 per cent food price increase in some restaurants in the city. A plate of food that was sold at N500 initially now goes for N800 at some restaurants in Osun State. “

The people are, however, hopeful that things would change for the better when stakeholders take a more decisive action to end the scarcity.