AFRICA/NIGERIA - Concern over rising fuel prices caused by war in Middle East

Tuesday, 10 October 2023 wars   economy  

Abuja (Fides News Agency) - The fear of a possible fuel shortage spread yesterday, 9 October, in the Federal District of Abuja, where motorists made panic purchases when they learned that some gas stations were not dispensing fuel and because they believed that the temporary absence of gasoline was an indication of an imminent price increase at the pump.The latest speculation about a possible fuel pump price increase comes two days after the Nigerian National Petroleum Company Limited, NNPCL, denied reports that it was planning to raise fuel prices once again.
According to the Nigerian press, speculation is already underway largely due to concerns over the ongoing conflict between Israel and Palestine in the Gaza Strip and reports of higher oil prices on the international market due to fears that the conflict could disrupt production in the Middle East.
Nigeria finds itself in the paradoxical situation of being one of the world's largest producers of crude oil but dependent on foreign countries for petroleum products, leaving the country at the mercy of price fluctuations on the international market.
Already in August, the price of diesel rose by 57.18% to 1,272.40 naira per liter. This fuel is not only for motor vehicles, but mainly for running diesel generators used by merchants and households to compensate for the constant power outages of the national grid.
If the ongoing conflict between Israel and Palestine continues to escalate, Nigeria, which has not yet recovered from the economic crisis following Russia's invasion of Ukraine, could face another energy crisis, which in turn could force the government to spend more money on subsidies.
The further paradox that the country experiences is that if there were to be, due to the widening conflict, a disruption of production in the Middle East, and thus a shortage of crude oil on international markets, Nigeria would be unlikely to be able to take advantage of the situation because of the limits on its production. Already, Nigeria has been unable to meet its OPEC quota.
Under pressure from rising debt costs and high fuel prices, governments across Africa are trying to reduce expensive oil subsidies, but these measures are unpopular and have sparked discontent not only in Nigeria but also in Angola. Angola also exports crude oil and imports petroleum products. In June, at least five people were killed there during protests against the near doubling of gasoline prices
(LM) (Fides News Agency 10/10/2023)