The Effect of Fuel Crises in Nigerian Economy

THE EFFECT OF FUEL CRISES IN NIGERIAN ECONOMY (A CASE STUDY OF ENUGU STATE)

Fuel Scarcity in a nation blessed with which is supposed and believed to be flowing with milk and honey, it is unfortunately becoming a shameful order of the day. There has been epileptic of fuel nationwide to out dated nature of the equipment installed and inability of it been reserviced, this was later followed by persistence. Crisis of June 12 political and national gas staff Association of Nigeria. (PENGASSAN), clowned tools to protest the announcement of Nigeria’s first ever free and fair election. They parked their tankers and consequently forced.

According to sit Gianni, it tell Magazine (June 14, 1993. page 30) fuel scarcity hits the country when Muslims were preparing to celebrate their salah Holiday, causing a total break down in the transport system and disrupting economic movement and also the  refineries in port Harcourt, kaduna and warri  one of them is quite health. One to the unhealthy condition of Nigeria refineries. The managing director of NNOC then T.M Dankory said that warri refineries will be closed down soon for routine technical cheeks and that kaduna refinery also has a problem.

The fluid catalytic oraker chit (fuel), which converts fuel oil to petrol, remained a problem. The fear has broken down and cannot produce petrol as expected, all thse attributed fuel scarcity in our country Nigeria.

According to Obika, Punch Newspaper (February 16, 1997-p4), the fuel scarcity in 1995 and 1996 respectively were attributed due to poor condition or refineries in Nigeria but exports claimed in their professional wisdom that these refineries were not at full capacity.

The former petroleum minister prof. Dam David west accused government at tackily accepting black marketing by quoting back market sales price to trivalent and immoral” the hundred enduring hardships enlarging the scarcity. The problem of fuel scarcity resources due to in the price of petroleum products. Curiosity, the problem of fuel scarcity resources due to In the price of petroleum products. Curiously, the authorities have always told the people that their tension to increase the price of petroleum product is to curb to increase the price of petroleum product is to curb smuggling hoarding and the commodities are not short supply in the market.

To day, however, the game has changed. The period was to ready and regular supply of fuel in all parts of the countries. The long shut and non-performing refineries including Kaduna refineries and petrochemical (KRPC) and the first portharcourt refineries company (PHRC) burnt in 1989 are now functional. The turn around maintenance of these refineries and refining infrastruction has also been carefully planned by the management of the Nigeria National petroleum company (NNPC) headed by Mr. Jackson Gawobaseki as group managing director. He said that the refining could be shut occasionally for routine maintenance or due to spotted functioning but it will not take time like before. Infact, the minimum level, that motorist hardly spent five stations. The motorists hardly spent five minutes in filling station. the prices of things in the market due to steady supply of fuel in the country now.

Infact the situation of things in the country show that the paradox of Nigeria being the sixth largest producers of crude oil is a reality.

• . ECONOMIC BENEFITS OF FUEL

The economic benefits of fuel in Nigeria economy

1. HEAVY INDUSTRIES INVESTMENTS: the huge of foreign exchange earning from petroleum enables the government to make heavy industries investment. These investments helped the country to break its vicious circle of poverty and experience economic take off.
2. EDUCATION: The great expansion in educational facilities from 1960 to 1988 was primary and by oil revenue. The number have escalated secondary school in the country have escalated. There are also numerous universities, colleges of education and polytechnic in the country.
3. RISE IN INCOME: The great earning from fuel lead to a general rise in level of real income through the country. This helped to meliorate standard of living of people.

• IMPLICATIONS OF THE SCARCITY ON THE NIGERIA

It is a common knowledge today that this food price increase worsen the problem of poverty in Nigeria, many workers will lose their job as many companies will find it difficult to cope with the condition. Excessive corruption, mismanagement have become the great bone of government in Nigeria.

The implications are:-

1. RETARDATION IN GROWTH: since oil was described as one of the major revenue to the nation, it scarcity will cripple all the avenue meant for getting money.

1. INCREASE IN TRANSPORTATION: The persistent fuel scarcity raised transport fares, which make travelers pay exorbitant fare, some people who cannot afford this money stay at home and unabated in Enugu. Animals and human beings are now being transported in the same vehicle for both situation necessitated by the persistent fuel crisis/ scarcity which had paralyzed socio- economic activities in the state, has forced traders to desperately shared the vehicles with animals in the absence of buses or car due to over 508 percent increase in transport fares. Changed by few vehicles on the road.

• The acute fuel crisis which continued in the country has been identified as one of the problems militating against smooth trade transaction in African. The observation was made by a bulletin jointly produced by the republic of Benin, Niger, Nigeria, Chad and Cameroon, the publication which reviews the brose transaction within the continent between July and September 1997 declared the fuel crisis usually induced long queues and tame wasted, particularly when moving time wasted with that or state the perishable  goods with that or state the cost borne by traders assume an up ward shape while the multiplier effect on  consumer trickles down in form of increased market prices of goods and services.

1. Many industries across the country have been rendered redundant and are recording large financial losses as the current fuel crisis takes a serious toll on their operations.
2. Many people died due to fuel illegal business at Geziva 26 kilometers from Keno six persons believed to be members of an illegal fuel syndicate were burnt to death after a motor accident. These people were killed when their vehicle loaded with about somersaulted as result of tyre burst and caught fire.
3. The federal government commenced new measures to check the scarcity of petroleum to check the scarcity of petroleum after a meeting of the defense head Quarter with the special adviser to the head of state on petroleum , Mr Arat Adams and include ensuring the avaliablilty of the products and effective distridution specially, they are:-
4. To facilitate the bridging of refined petroleum products across the country the PPMC will hence for the pay competitive rate for the haulage of petroleum product to transporters and markets.
5. The PPMC is to accelerate the importation of refined proucts to improve the supply situation.

iii.        The PPMC should reach an immediate agreement with Nigeria Railway cooperation (NRC) to assist with the knowledge of petroleum products across the country.

1. State administrators and respective attorney General to apply existing laws which prescribed severe penalties for diversion/ hoarding and adulteration and other unlawful acts to their respective domains in dealing founders.

Presently, thing have changed, we are no longer in the period of fuel rationing which lead staffs embarked on rationing of  fuel to motorists in a bit to alienate their problems. More so, we are no  longer in the period of long queen in the filling station, now most of oil marketing outlet plead to motorists to come and patronize the because other filling  station have to compete with their notice in fact all the filling station but during the fuel scarcity, they don’t have time for such things. Consequently, we hardly see smullgers selling fuel along the road side because now motorists go straight to the filling station and buy as cheap prices to the filling station and buy cheap prices unlike before when smugglers sell petroleum products at exorbitant prices to people.

2.3       SCHOOL OF THOUGHT RELEVANT TO THE PROBLEM OF STUDY.

There are many school thought will regard to the problem of fuel crisis.

According to the Alhaji Wada Nisi a special adviser to the formal head of state, late General Sani Abacha, blame the situation (fuel crisis) on activities of economics saboteur who diverts about 80 percent of fuel supplied daily for local consumption to the black market. The saboteurs include tankers drivers, smugglers, tasks force etc.

The  ex-military administration set- up these task force to ensure that petroleum products meant for their state were obtained and delivered to their destination and  dispensed to motorist and to accompanied, monitors delivery to their destination and dispensed to motorist and to accompany monitors delivery tanker right from the depts. To the print of discharged. But then, the task forces of the personnel were learnt to be part of the large since hoarding, smuggling and fuel racketing to country. In the same vain, the boss Mr. Jackson Cnarus Obaseki decided to discard some of the task force because product smuggling, hoarding and adulteration or diversion occasioned by hindering scarcity has become moriblend. Infact, some of the workers alleged that the regulations to supply by the NNPC in recent time was going down well with some of thee task forces personnel, who were feeding  fat in the illegal money, the were going  from hoarding, smuggling and fuel racketeering .

The constant stabilization of the fuel prices to the country has made it possible to have quantity of fuel devoid of adulteration unlike before when prices were not stable. Recently, the government proposed increase in the fuel price, ever since then the problem of fuel scarcity has reduced.

More over, the innovation of turn around maintenance of the major refineries to the country has made it possible to enhance sufficient fuel unlike before when Luke worm attitude is exhibited by the authority concerned.

The fuel monitoring group set up virtually to all state left the federation has helped in no small way to alleviate the activities of smugglers.

Finally, we are no longer in the period of long queen in the filling station, fuel diversion hoarding and fuel racketeering due to the effort of government, NNPC oil marketing companies to solve people problem.

According to Bhimberg News Magazine (December 20 1999 p 38) oil output in Nigeria from Shell and other companies has been dogged by violence in the Niger delta, where local communities are demanding a bigger share of the country’s oil wealth.

According to sam Aluko an economies professor and head of Neic said that people in the oil industry the military and other law enforcement agent were profiting from the black marketing, hence no services effort was being made to resolve the problem of refineries which are still short for now

Analyst reason that dealer may have resorted to diverting the product outside the country to protest against their margins which have now been revised down ward.

A marketer at total filling station located at Agbani Road also says that it was caused by a drop in supply of imported fuel.

According to Asiodu, Chief Eonomic Advice to the president, news watch magazine (December 13, 1999 p, 38) that due to the leads to smuggling of the commodity it leads to smuggling and corruption.

According to Obuna, manger to C to C filling station located at 175 Agbani the go out side Enugu live port Harcourt, Warri and Lagos to get products and when they do this they have to increase the price of the commodity. It also said that they means in which this problem can be corrected such as stopping of pipeline between Enugu and Aba: this launders the movement of the products.

2.4       DIFFERENT METHOD OF STUDY THE PROBLEM

1. PERSONAL INTERVIEW: This involve direct contact with various managers, pump attendant and members of the general public in order to collect vital inform action that will be useful to this research work.

According to Chinasa Ugwu, a pump attendent of AP filling station at Zik Aveune, said that they enjoy and gain enough money during crisis that they enjoy and gain enough money during crisis because most of their customers gave them money other gift in order to get fuel before others.

According to the managing director of jex situated at 22 Osadebe street opposite temporal taduim said that company spent a lot of money, when, transportating. Their products to their customer due to the problem of products or fuel crisis.

1. DIRECT OBSERVATION/ PERSONAL CONSTANT: This is by personal observation rewards the reaction of people and things during the fuel reaction of people and things during the fuel crisis.

During this period the period of the fuel scarcity the prices of goods and services increase greatly, traders said that transportation expenses contributed to the increase of goods in the market. Even, some lecturers and other civil servants came to office late. They all complained that the suffered because of this problem.

2. SECOND DATA: These are the information derived from newspaper and magazines that contain views and opinions of people in particular areas of interest.

2.5       SUMMARY.

Despite the attempt by officials of NNPC to arrest or curb the lingering fuel crisis in the nation but the problem refused to go. The implication this problem flame has been a sustainable scarcity of petroleum products nation wide.

Infact, the development was that the whole nation has to depend on fuel imported from other country.

The effect of this also went far into the economy with many industries effected .the problem effect civil servants, businessmen, student etc had to their offices. The loses was indeed too great for that os yet to develop.

Ove to cancellation, or June 12 political election, Sallah holiday, breakdown of refineries live in fuel price etc. attributed to fuel scarcity in Nigeria. The government was accused by tam. David west for promoting black marketing by quoting black market sales prices. Alhaji Wda Nas blamed the situation (fuel crisis)  on the activities of economic sabotueur, who divert fuel supplied to local consumption to the black market on order to curb the activities of economic saboteurs the boss of NNPC  Mr. Jackson Gairs Obaseke  disbanded some of the forces set up the ex-military administrations because they find it difficult operating within a militarized environment while we are in democratic system of government while we are in democratic government set up new measure to  check the scarcity of petroleum products in the country in order to eliminate the agony people are going through.

Finally, the period of fuel scarcity had gradually given way to steady and regulate supply of fuel in all parts of the country. The long shut and non- performing refineries are now functioning, infact most of the oil marketing no longer bribe pump attendant or spend 24 hours at the filling station. These days, all at the filling station. These days, all the fuel station gives notice that they have fuel.

More over, we are no longer in the period of rationing unlike before when two filling stations had one tanker of fuel. Now we see smuggler selling along the road side.

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