Oil prices experienced a notable increase of over $1 per barrel on Wednesday following the reappearance of fuel queues in Lagos and its environs. Brent crude futures rose to $95 a barrel by 5:27 PM on Wednesday. The resurgence of long queues at filling stations has raised concerns about a potential return of petrol scarcity in Nigeria.
Key Points:
- Brent crude futures saw a surge to $95 per barrel as fuel queues reemerged in Lagos and surrounding areas.
- The queues at filling stations have sparked fears of a renewed petrol scarcity in the country.
- Reports indicate that petrol supply has declined by 93% nationwide since President Bola Tinubu announced the end of fuel subsidies on May 29.
- Many filling stations in Lagos closed their gates to customers, while those with available products experienced conspicuously long queues, especially along the Oshodi-Ibadan Expressway.
- Notably, Mobil, TotalEnergies, and Oando stations along the expressway were closed on Tuesday.
- The North West and NNPCL Retail premises, which had products available, witnessed a large turnout of vehicles and customers with containers.
- Statistics from the Nigerian Midstream and Downstream Petroleum Regulatory Authority reveal a drastic drop in supply after May, with petrol supply by the NNPCL plummeting from 68,353,981 liters before the subsidy removal to 4,544,002 liters in August.
- Before the subsidy removal, the NNPCL CEO, Mele Kyari, stated that daily consumption was around 66 million liters. However, the latest report as of August 20 shows a significant drop in supplies.
- Despite efforts to anticipate increased supply from the Dangote refinery, delays in its operations have contributed to challenges in meeting local consumption demand.
Analysis: The resurgence of fuel queues and the subsequent rise in oil prices highlight the continued vulnerability of Nigeria’s fuel supply chain. The delay in refinery operations and forex volatility further compound the challenges faced by the industry.