Fuel Scarcity - Too much vested interest for it to end

by Mac on 6th May 2009 | View all blogs by Mac
So the fuel scarcity continues in Lagos and the rest of the country with seemingly no end in sight. My question though is does anyone involved actually want it to end, lets look at some of the people with a vested interest in this scarcity:

The Importers
They are apparently the root cause of the issue but the longer they refuse to import the more they demonstrate their control over the government, and the more time they buy before the downstream sector is de-regulated. The current regulated sector and the subsidy is a corrupt system beyond belief with payments made all over the place to people who don't need it.

NNPC
Why would they want this to end, they are currently the only people importing fuel in any volume into the country, which means they are the only ones making money and the only ones collecting bribes / money to deliver fuel to stations.

Station Attendants
They are clearing up, these 2 weeks of scarcity so far have probably put more filling station attendants children through school than their entire careers to date. 500 Naira a go seems to be the current "thank you" to pay to an attendant for doing their job and selling fuel to you

Area Boys etc
They are also collecting their 100 to 200 Naira a go to jump you up the queue or just to let you into the station.

Black Marketers
Is there anything more depressing than someone stood outside a filling station with a tiny 5 litres or 2.5 litre cannister of fuel and a hose / funnel? But these guys are also making huge profits, trading on the Nigerian sense of lack of time, and over reaching. If you're too busy to queue, what choice do you have?

Filling Station Owners
If you own a filling station and you can get fuel to it at the moment you can clear up. Admitedly everyone you know will be hounding you for fuel and delivery schedules but at least you're fine and you're making money regardless.

So here's an interesting question, is scarcity actually good for the economy, informal economy obviously, there's a lot of extra money floating around at the moment, proabbly enough that even if the subsidy was removed tomorrow and fuel traded at market prices we'd still be paying less on average. On second thoughts then maybe it's all a very clever communication strategy by the government, we'll all be so fedup of paying black market prices and "thank you's" that if the price went up to N150 a litre from N65 we'd still be happy, especially if we didn't have to queue anymore.

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