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Reuters/Afolabi Sotunde
Traffic jam at a petrol station in Abuja, Nigeria
LIGHT AT END OF THE TUNNEL

Nigeria’s fuel crisis looks set to end just in time for its new president

With the country facing the real prospect of its economy grinding to a halt, Nigerians received good news that the current fuel crisis, easily the worst in recent times, will be resolved immediately.

The crisis was caused by strike actions by local petroleum marketers and transporters over the failure of Africa’s largest oil producer to pay bills of up to $1 billion in fuel subsidy payments.

The strike was called off after an agreement was reached between the Major Oil Marketers Association of Nigeria (MOMAN), the national oil company NNPC and the government as well as other key players in the oil and gas business.

The oil marketers, who import refined petroleum products due to a lack of local oil refineries, said they’d begin lifting and supplying petroleum products across the country. This could see some normalcy begin to return to the country after a few difficult weeks which has seen major roads blocked by fuel queues.

Nigeria’s notoriously erratic power supply worsened over the last four weeks, as gas supply to the country’s main power stations dwindled. The situation was exacerbated by a scarcity of diesel fuel which many businesses use to run electric generators to enable them provide consumer services. Several major businesses including telecommunications companies, radio stations, public services and banks have either curtailed or shut down operations

The strike may have been called off, and queues may very well soon disappear, but it will still take a while for full operations to resume across Nigeria.

The fallout of the fuel crisis will still be dealt with by incoming president, Muhammadu Buhari who will be inaugurated on May 29. Magnus Abe, chairman of the Senate committee on petroleum resources, said one of the concessions to enable the end of the strike meant the new government would be committed to paying off the outstanding claims to the marketers.

Buhari’s government will have to make an immediate decision on the subsidy on fuel which was fiercely opposed by Nigerians when initially proposed by president Jonathan’s administration in 2012. Whether Buhari’s government decide to keep it in place or remove, care must be taken to ensure that the country is not faced with the possibility of a similar shutdown in activities due to fuel shortages.

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