Nigeria claimed it will receive huge amounts of imported gasoline in the next few weeks in a move that would likely add severe strain to an already tight global market.
More than 2.3 billion liters (1.7 million tons) of gasoline will be delivered by the end of February to restore stocks to a national target of 30 days supply, the Nigerian National Petroleum Co. said in a statement posted on Twitter.
That would exceed the 1.2 million tons of the fuel held by independent storage companies in Europe’s Amsterdam-Rotterdam-Antwerp trading hub, and test the tanker market’s ability to suddenly deliver such large volumes at relatively short notice.
The need for resupply arose after the African country imported a batch of gasoline that contained too much methanol, making it unsuitable for domestic usage. That led to large queues at filling stations, and several government agencies working to resolve the crisis.
It’s led to fewer cars on city streets, as motorists wait in long queues at gas stations to fill up their vehicles, and surging transport fares.
“I used to spend 200 naira (48 cents) a day to get to work and back, but now I am spending 1,000 naira,” Cynthia Favour, a 28-year-old resident of the capital, Abuja, said in an interview.
The shortage has caused an “unnecessary shock” to the Nigerian economy that may lead to a spike in inflation and slower economic growth, Statistician-General Simon Harry said Tuesday.
“It is a negative signal that is capable of affecting not just the inflation rate, but also other macroeconomic variables,” he said.
Inflation in Nigeria is currently 15.6% and any acceleration would further burden a nation where more than 39% of the population lives on less than $1.90 a day.
The level of gasoline stocks that are safe to use in cars and machinery is currently about 1 billion liters, the NNPC said. The shortage of gasoline has created a thriving black market where the product trades for about five times the official subsidized price of 165 naira (40 U.S. cents) a liter.
Gas stations plan to stay open for a minimum of 18 hours to try and clear the queues, members of the Major Oil Marketers Association of Nigeria said Wednesday.
The fuel crisis is “decimating income revenues for ride-hailing drivers,” said Justin Curtis, 35, an Uber driver who said he waited at least 18 hours in a queue for gasoline having spent the night at the gas station.
“We are losing money and our customers are also stranded,” he said.
Follow us on social media: