The unemployment rate in the country is being exacerbated by the current fuel scarcity that has bedeviled the country and which major operators in the downstream sector of the petroleum industry said would extend till March 2010.
The implication of a prolonged fuel crisis, according to analysts, is that there would be further contraction in activities in the economy. While a number of structures would be weakened, investments will slow down, unemployment will increase and doing business in the country would be less rewarding.Some companies are thinking of laying off staff should the situation persist without any palliatives from the government. This is to enable them cut costs.
Kunle Ajala, a former economics lecturer and now the managing director of SPOG Petroleum, said the economy thrives on the availability of premium motor spirit (PMS) and if its short supply persists, it would be difficult for industries to operate efficiently. ''Things are in bad shape but the country would get over it", he said.Again, productivity is on the decline as more people spend more time at filling stations with official vehicles of many companies queuing all day for fuel without much success, thereby wasting away valuable times that should have been deployed into useful ventures.
It is feared that the present situation might lead to food crisis as agricultural products from the hinterland might be transported to the cities while the ones that get there would have their prices moved up because of the high cost of transporting the commodities.According to officials of oil marketing companies, the scarcity is persisting because the Nigerian National Petroleum Corporation (NNPC) has reduced the number of cargoes it normally brings into the country and while banks are asking for guaranty from the Federal Government before they advance any credit facilities to the marketers.Contacted on the contraction on imported cargoes of PMS, NNPC's spokesperson, Livi Ajuonuma, said: "I am in a meeting" and hung up.
To the managing director of Mobil Oil Nigeria, Tunji Oyebanji, the sector is having these problems because it is heavily regulated. He said that although deregulation may not be the cure all it would lead to efficient allocation of resources and therefore attract investments in various areas of the sector. "Investments would come with deregulation", he said. Investigations revealed that various petroleum depots in Lagos are empty as only skeletal services are being rendered by them. Some depots, BusinessDay learnt, have not had supplies since December 2009.
Trucks from various parts of the country are parked along the major roads that lead to the major depots in Lagos in anticipation of supply.The situation now is very critical because the little that is made available by NNPC is immediately taken away by dealers that have already positioned themselves at the depot gates. These customers in turn sell the product to independent marketers who sell at between N90 and N100.
Source: Fuel scarcity worsens Nigeria's unemployment rate (http://www.businessdayonline.com/index.php?option=com_content&view=article&id=8057:fuel-scarcity-worsens-nigerias-unemployment-rate-&catid=85:national&Itemid=340)