September 2024
By Okafor Joseph

Nigeria is facing a looming crisis in its petrol supply chain as a $6 billion debt and soaring foreign exchange (forex) rates threaten to cripple the industry. The Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised alarms over a possible prolonged petrol shortage, which could have dire consequences for the nation’s economy and daily life.

In a statement issued on Monday, IPMAN warned that the current financial situation poses a significant threat to the availability of petrol, with many marketers unable to secure the necessary forex to import fuel. The $6 billion debt, largely owed to foreign oil suppliers and trading partners, has further complicated matters, as creditors are now reluctant to extend more credit to Nigerian importers.

“The situation is dire,” said Chinedu Okoronkwo, President of IPMAN. “Many of our members are struggling to stay afloat due to the high forex rates, which have made it almost impossible to import petrol at viable rates. Coupled with the outstanding debts, we are at a breaking point.”

The warning comes amid a turbulent period for Nigeria’s oil sector, which has been grappling with multiple challenges, including fluctuating oil prices, inadequate infrastructure, and policy inconsistencies. The ongoing forex crisis has exacerbated these issues, leading to reduced import volumes and increasing the likelihood of supply disruptions.

Several petrol stations across the country have already reported shortages, with long queues becoming a common sight in major cities like Lagos, Abuja, and Port Harcourt. The scarcity has led to a surge in petrol prices on the black market, further straining the finances of everyday Nigerians.

“The government must intervene immediately to resolve the forex crisis and settle the outstanding debts,” Okoronkwo added. “Without urgent action, we could see a prolonged shortage that will affect not just the economy but the livelihoods of millions of Nigerians.”

Economists have echoed IPMAN’s concerns, noting that a sustained petrol shortage could have far-reaching consequences for Nigeria’s economy. “Fuel scarcity affects everything—from transportation to food prices,” said Dr. Ayodele Thompson, an economist at the Nigerian Institute of Social and Economic Research (NISER). “If this situation persists, we could see inflation rise even further, worsening the already tough economic conditions.”

In response to the warning, the Nigerian government has assured the public that it is taking steps to address the crisis. The Ministry of Finance announced that it is in talks with foreign creditors to renegotiate the outstanding debts and explore alternative forex funding mechanisms.

“We understand the gravity of the situation and are committed to finding a sustainable solution,” a government spokesperson said. “We are working closely with the Central Bank of Nigeria and other relevant agencies to stabilize the forex market and ensure a steady supply of petrol.”

Despite these reassurances, IPMAN insists that time is of the essence. The association is calling for immediate measures to be put in place to stabilize the forex rates and clear the backlog of debts. Failure to do so, they warn, could lead to a catastrophic breakdown in the petrol supply chain.

As Nigeria navigates this challenging period, the coming weeks will be critical in determining whether the country can avert a full-blown petrol crisis. For now, the specter of a prolonged shortage looms large, with millions of Nigerians anxiously awaiting the government’s next move.