Nigeria, Africa’s largest economy, is on the verge of total shutdown due to a widespread and worsening scarcity of petroleum products. The scarcity, a result of strikes by fuel marketers and transporters, has intensified in the last two weeks as black market prices across the country have skyrocketed past the government-approved N87 ($0.44) per litre price.
Even though Nigeria is Africa’s largest oil producer, it has to import refined petroleum products due to a lack of local refineries. The importers have been in dispute with the government for some time over unpaid bills of nearly $1 billion. That’s the difference between the cost of imported products and the government subsidised fuel prices in Nigeria since October 2014.
The scarcity has resulted in a number of high profile companies shutting down or curtailing operations as radio stations, telecommunications companies and public services have all been badly affected.
The aviation industry has also been affected as Arik Air and Aero Contractors, two of the biggest local operators, cancelled flights.
MTN, Nigeria’s biggest telecommunications network with over 50 million subscribers, have warned customers to expect service cuts due to an inability to power base station across the country
Airtel Nigeria, another major mobile network operator, also warned the lack of fuel products will negatively affect its service. Mobile networks in Nigeria, like many local companies, rely on diesel generators to keep operations running, such as local network towers.
Public services have also been hit as LAGBUS, run by the Lagos state government, could be stopping transport operations in Nigeria’s most populous city.
The scarcity comes at a crucial time for Nigeria as the inauguration of the new government of President-Elect Muhammadu Buhari is set to be held May 29 with as many as 50 global leaders expected to be in attendance.