IMPACT OF FUEL SCARCITY ON NIGERIA’S ECONOMY

BACKGROUND OF THE STUDY: Until the early 70’s, the mainstay of Nigeria economy was agriculture. Then the country was famed for her proficiency in the production of groundnuts hence the Kano groundnut pyramids, oil palm and the faster part of cocoa in the western part of the country.The discovery of oil in the country in commercial quantities brought about radical changes in the economy of the nation. All other sectors seemed to have gone into oblivion and indeed were abandoned thereby making the country to be totally dependent on oil for her foreign exchange earnings; not agriculture any more. All effort made since then to diversify the economy of the country have come to naught (Ovaga, 2012). As expected, the narrowing of the economy to a monolithic export commodity has its attendant drawback as oil by virtue of its importance to the economics of nations has inevitably become a subject of political manipulation. But the greater danger for Nigeria is that as a sole commodity of the nation and the inherent total dependency on oil has made the country’s economy revolve around it. Virtually all essential service rendered in the country revolves it. Almost all other sectors of the economy depend on oil.Any contemplation therefore of a possible scarcity or unavailability of the product will no doubt spell doom for the economy of the country (Sikkam, 2009).

Just like water and air are important to the living human being for daily duties and hitch-free survival, the importance of fuel to automobile cannot be over looked. A typical situation is in the case halts because of the fact that there is shortage of fuel. The importance of fuel in this our developing and technically inclined economy is fast like the mixture of oil and salt as far as the economy forgets growth as one of its goals. Fuel is used in a variety of activities ranging from production, mobility, cooking, electricity supply, sources of foreign exchange, to mention but a few. To this extent one would accept that fuel plays a great role in the life of every citizen of the country and the country as a whole.

Yemi (2012) opined that fuel scarcity has plagued the nation recently appeared to be worse at the beginning of these years it caused a lot pain anguish and dislocation of economic and sundry activities. There was hardly any individual industries institutions and organization in Nigeria today that was not severely affected. It is widely believed in government circles what perennial fuel crisis is largely caused bottlenecks in the distribution system. But a survey show that the bottlenecks and other associated problem are caused by conflicting activities of multifarious government agencies.

Besides there are problem of manpower shortage inadequate funding lack of materials legal limitation and safely of which increase the crisis in Nigeria despite the effort of DPR some encourage and sell adulterated fuel (Nwankwor,1981). The crisis situation worsening day after day when some fuel stations sold fuel in the night to the a black markets in which they will increase the rate from N350 to N500 per gallon depending on the level on the level of adulteration with kerosene. The fuel scarcity was believed to be worse in certain occasions by hoarding fuel diversion smuggling and under deliver at retails outlets have been rampant with the overall co-operation monitoring and general supervision of product random sampling at several filling stations and observed that the perennial fuel shortage was caused by filling stations. Despite all the efforts of the ministry and parastatals the NNPC has almost found it impossible to eliminate the activities of saboteurs in the oil industry in the country. Investigation has shown that between January and March 1999 Nigeria has had a daily local consumption of 8.509 million liters of fuel supported with 6.883 million liters imported fuel thereby bringing the product available to 15.392 million litters. Allwell (2012) suggests that smugglers and saboteurs in the country contributed so much to the scarcity.