Nigeria fuel shortages ground telecoms, banking and aviation

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fuel69_18Chronic fuel shortages in Nigeria brought phone firms, banks and flights to a standstill on Monday, just four days before Muhammadu Buhari’s inauguration as president of Africa’s biggest economy and top oil exporter.

Besides airlines, which could not obtain aviation fuel, phone companies such MTN and domestic banks ground to a halt because the private generators that produce most of Nigeria’s electricity ran out of fuel.

“Services are already degraded and some of our customers are already feeling the impact,” Funmilayo Onajide, a spokeswoman for South Africa-based MTN, said.

Even though it is Africa’s biggest crude producer, Nigeria has to import nearly all its fuel due to old or inadequate refineries. Fuel importers say they are owed money by the government and have shut depots to press their case.

Finance Minister Ngozi Okonjo-Iweala denied this was the case, telling reporters the government had not failed to pay importers and adding they had received money as part of an agreed plan of rolling instalments.

Buhari, a former military ruler who last month became the first opposition candidate to defeat a sitting president in Nigeria, will be installed as head of state on Friday.

Besides MTN, Abu Dhabi-listed telecoms firm Etisalat also reported disruption.

A number of banks including Guaranty Trust Bank and Union Bank of Nigeria shut branches early.

Many travellers were also braced for long delays after airline Arik was forced to ground a number of domestic flights at the weekend and rival carrier Aero said its flights would not operate regularly.

BUSINESS CONDITIONS

The shortages are an early headache for Buhari, who is taking over an economy creaking under the weight of slowing growth and rising inflation.

“Shortages will not only hold implications for output but will also add upward pressure on inflation,” said analyst Cobus de Hart of South Africa’s NKC Independent Economists. “Prolonged fuel shortages may also result in job losses as business conditions deteriorate.”

In the commercial hub Lagos, usually gridlocked streets were relatively clear during the Monday morning rush-hour because many drivers had run out of petrol. Some resorted to buying black market fuel for 500 naira ($2.53) per litre, more than five times the official subsidised price.

“Five hours on the road, the cost of coming to work is too high, the cost of transportation is too high,” said Gbenga Forotimi, a civil servant who struggled to find buses and had to pay extra for a journey that normally takes two hours.

The only people smiling were black-marketeers lining the streets with jerry cans of fuel. “I have sold three 30-litre cans of fuel today at 12,000 naira each,” one salesman, who wanted to be referred to as Samaila, told Reuters.

($1 = 198.0000 naira)