Monday, 28 October 2024 04:51

Fuel price hikes: 10,000 marketers face closure, 1m potential job losses amid consumption collapse

Rate this item
(1 Vote)

The Nigerian fuel retail sector is facing an unprecedented crisis following the removal of fuel subsidies in May 2023. Fuel consumption has plummeted 92% from 60 million liters per day in May 2023 to just 4.5 million liters in August 2024, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

Key impacts:

- Fuel prices increased nearly 500%, from N175 to over N1,000

- Only 16 of 36 states received fuel supplies in August 2024

- Cost of a fuel truck rose from N7m to N47m in 16 months

- An estimated 10,000 fuel marketers face closure within 45 days

- Potential job losses could affect up to one million workers

Industry associations, including PETROAN (Petroleum Products Retail Outlets Owners Association of Nigeria), have appealed to President Tinubu for a N100bn grant to prevent mass closures. Meanwhile, NUPENG (Nigeria Union of Petroleum and Natural Gas Workers) reports significant job losses among truck drivers and station workers.

Analysis:

1. Economic Impact:

- The dramatic drop in consumption suggests severe demand destruction

- The crisis appears to be creating a negative feedback loop: higher prices → lower consumption → business failures → job losses → further reduced consumption

- The situation is contributing to broader economic challenges and inflation

2. Policy Implications:

- The subsidy removal has created significant market disruption

- The limited fuel distribution to only 16 states indicates possible supply chain issues

- The request for government intervention (N100bn grant) suggests the market hasn't yet found a sustainable equilibrium

3. Social Consequences:

- Widespread transition from private to public transportation

- Significant employment impact in the fuel retail sector

- Ripple effects across the broader economy due to increased transport costs

4. Positive Side Effect:

- Reduction in cross-border fuel smuggling due to higher prices

The situation appears to represent a major structural shift in Nigeria's fuel market, with significant implications for both the economy and society.

December 23, 2024

Investors on NGX gain over N1trn in 5 days

The Nigerian Exchange Limited (NGX) posted strong gains last week, with investors adding more than…
December 20, 2024

Atiku questions alleged hack of NBS website, says timing suspicious

Former Vice President Atiku Abubakar has raised concerns over the recent claim that the website…
December 22, 2024

How to know if your memory lapses are serious or not

The older I get, the more panicked I become when something slips my mind. Is…
December 21, 2024

‘Professional Back-Scratchers’ charge up to $130 per hour

The Scratcher Girls is an unconventional relaxation therapy studio that charges clients up to $130…
December 21, 2024

NAFDAC busts illegal rice repackaging operations in Nasarawa, Abuja

The National Agency for Food and Drug Administration and Control (NAFDAC) has cracked down on…
December 23, 2024

Here’s the latest as Israel-Hamas war enters Day 444

Israel's Netanyahu eyes Iran after triumphs over Hamas, Hezbollah, Syria 2025 will be a year…
December 20, 2024

OpenAI launches voice and text access to ChatGPT through new phone service

OpenAI has introduced a novel way to interact with its popular ChatGPT artificial intelligence system…
December 17, 2024

Ademola Lookman named 2024 CAF Men’s Player of the year. These players won in other…

Ademola Lookman, the Super Eagles winger, was crowned the 2024 CAF Men’s Player of the…

NEWSSCROLL TEAM: 'Sina Kawonise: Publisher/Editor-in-Chief; Prof Wale Are Olaitan: Editorial Consultant; Femi Kawonise: Head, Production & Administration; Afolabi Ajibola: IT Manager;
Contact Us: [email protected] Tel/WhatsApp: +234 811 395 4049

Copyright © 2015 - 2024 NewsScroll. All rights reserved.