The Impact Fuel Scarcity On Nigeria Economy (a Case Study Of Enugu Metropolis)

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       This research is based on the economic effects of fuel scarcity in Nigeria.  The research was carried out to find out the extent to which the entire population in Enugu metropolis has suffered due to fuel scarcity. The population used for this study is the workers of NNPPC, car owners, businessmen and women and the entire population of Enugu metropolis. The researcher used primary and secondary data which comprised of interviews and questionnaire to get information.   From the data analysis, the researcher came up with the following findings: The middlemen contribute to fuel scarcity, Transportation became high because of fuel scarcity, Fuel scarcity has led to rise in price of products in the market. Based on the findings, the researcher recommends that: The government should hurry up with the maintenance of the broken down refineries in order to ease the  problem of fuel scarcity. Pipelines that led to the various depots should be checked regularly for any possibility of leakage. In order to avoid fuel scarcity, escorts should be assigned to each tanker driver to avoid diverting of fuel to unapproved areas. They should provide storage facilities so that even if brake down occur, there will still be available fuel to distribute to their various consumers. If fuel are being supplied to filling station owners, they should be checked to make sure that the fuel are sold to the consumers to avoid hoarding. There should be a check by government to the seller of fuel to make sure that fuel are been sold to consumer at a government pump price.





Title page                                                              i

Approval                                                               ii

Dedication                                                             iii

Acknowledgement                                                  iv

Abstract                                                                vi

Table of contents                                                    vii



1.1      Background of the study                                   1

1.2      Statement of the problem                                 3

1.3      Objectives of study                                          5

1.4      Research question                                            5

1.5      Significant of the study                                     6

1.6      Scope of the study                                           7

1.7      Limitation of the study                                     8



2.0      Review of related literature                               9

2.1  History of oil industry in Nigeria (NNPC)       9

2.2      Nigerian’s Development and oil industry              12

2.3      Contribution of the petroleum industry to

Nigerian’s economic development

(positive and Negative effect).                           14

2.4      Function/Role of Nigerian national petroleum       corporations (NNPC)                                         21

2.5      NNPC and distribution of fuel in Nigeria        23

2.6      Problems of fuel distribution in Nigeria                26

2.7      Economic effect of fuel scarcity in Nigeria            28

2.8      The role of task-force on the management

of fuel scarcity                                                31

2.9      Scarcity of other essential commodities and

its effect.                                                        32


Research design and methodology

3.1 Research  Design                                              34

 3.2Area of study                                                  34

3.3    Population of study                                        35

3.4    Sampling method                                           35

3.5     Research instrumentation                              37

3.6  Validity and reliability of research instrument38

3.7  Sources of data                                               39

3.8  Method of investigation                                    42


Presentation and Analysis of Data

4.1 presentation and Analyses of results                    43

4.2 Data Analysis                                                   56


5.0      Summary of findings, conclusion and recommendation

5.1  findings                                                          60

5.2  Conclusion                                                      62

5.3  Recommendation                                             62

       Bibliography                                                    64

       Appendix                                                        67

Questionnaires                                         68


1.0                                                     INTRODUCTION


       This is to say that in the past Nigerians solely depended on the exportation of agricultural product for their source of income.  This continued until the discovery of the presence of oil in our country, especially in part Harcourt. This made them (Nigerians) to divert from Agriculture to the exportation of oil to other countries, which was actually fetching them much money even till this present time.

       There are many subsidiary oil companies scattered all over the country but the biggest among them is in port-Harcourt and it is called the Nigerian National Petroleum Company (NNPC). It is from here that crude oil is extracted from the ground refined to get those components like fuel, kerosene and gas.

       There are depots scattered all over the country like shell Port-Harcourt, NNPC Enugu, Eif oil Company, Warri Pipeline are directed towards these oil companies to facilitate distribution.  Tanker drivers and other dealers will load from the depot and distribute to filling stations, then the consumers will buy from the filling stations.

       Fuel supply has been moving smoothly in the country before the announcement of the budget by the head of state in January last four years 1999. It was in February 1999 that the whole issue of fuel scarcity started.  This has made it difficult for the government to accomplish that, which it proposed to do the budget.




The word “Scarcity” means when there is insufficiency of something.  Since there is insufficiency of fuel it is termed as fuel scarcity.

In the past, there has not been any services fuel scarcity, everything was moving smoothly, the industrialist both public and privates, does not have any problem.  Economically the price of goods and services, were affordable by the people. Car owners can just go to filling station and buy fuel at a normal price of N22.00 per liter and with much ease.

Things were moving smoothly in the country and in this part of Enugu metropolis until 1994 when we had one case of fuel scarcity till this moment of this study.


Because of fuel scarcity, people are so desperate to by fuel for their business. For this reasons, whenever any information was passes concerning the presence of fuel in any filling station, car owners will go there and queue -up. Some of them will have to sleep in the filling stations a day or more than two days while waiting for their turn.  People or car owners when they cannot buy fuel in any filling station, are forced to buy from the black market at an exorbitant price.  Some people use big gallons to buy fuel that will serve them for some days.

For the reason that there is insufficient fuel in the filling station, makes people sell fuel in ration so that everybody present will buy.  The car owners who think the fuel will not reach them will start jumping the queue, thereby causing fights among themselves.  Because of this reason, the filling station owners invite soldiers so that there will be peace and orderly queue in the filling stations. Fuel scarcity are sometimes artificial in the sense that during the Christmas period. Filling station owners will just hoard their fuel in order to sell at a high price.


This study has the following objectives:

-                     To find out the causes of fuel scarcity

-                     To recommend what can be done to solve the problem of fuel scarcity.

-                     To find out how the fuel scarcity has affected the business men and women civil servant etc. (the total population of Enugu metropolis).


The following research questions were formulated by the researcher:

-                     What are the economic effect of fuel scarcity in Nigeria?

-                     What are the causes of fuel scarcity?

-                     To what extent has fuel scarcity has affected the business men and women civil servants in Enugu metropolis?

-                     What are the possible solutions to the problems of fuel scarcity in Nigeria?


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