ECONOMIC INTELLIGENCE, Reports, SECURITY THREATS

FUEL SHORTAGES AND ELECTRICITY TARIFF HIKES IN NIGERIA

Nigeria, Africa’s most populous country is riddled with an array of economic challenges ranging from fuel scarcity to rising electricity tariffs. These issues not only affect the daily lives of citizens but also have broader implications for social stability and security, particularly regarding criminal activities. Fuel Scarcity One of the most pressing challenges Nigerians are facing is fuel scarcity, which has been recurrent in the country. The shortage of fuel is linked to various factors such as inadequate refining capacity, pipeline vandalism, and inefficiencies in the distribution system. As a result, transportation, businesses, and essential services have been disrupted, leading to frustration and economic losses for both individuals and enterprises. In late April 2024, Nigeria faced fuel scarcity that caused long queues in major cities such as Lagos, Abuja, and Kano. The Nigeria National Petroleum Company urged citizens to avoid panic buying as the scarcity resulted from logistical issues. Despite their claims, fuel prices have significantly increased, with some areas reportedly selling as high as ₦1000/litre. This has caused concern among Nigerians, who are already facing economic challenges. Regarding logistical issues that have further aggravated fuel scarcity, criminal syndicates have been known to vandalize pipelines and steal petroleum products. These activities not only deprive the government of revenue but also contribute to environmental degradation and pose significant safety risks. Electricity Tariff Hikes Another challenge Nigeria is facing is the recent increase in electricity tariffs. On 3rd April 2024, the Nigerian Electricity Regulatory Commission (NERC) approved an increase in electricity tariffs for customers under the Band A category to N225 per kWh, up from N66. The commission stated that customers under the classification are those who receive 20 hours of electricity supply daily. The government implemented this increase to address the long-standing challenges in the power sector, including inadequate infrastructure, low investment, and revenue shortfalls. The move is intended to improve service delivery, encourage investment in the sector and also eliminate the annual electricity subsidies of 1.14 Trillion Naira. This has sparked widespread discontent among consumers, particularly amidst the backdrop of economic hardships. The tariff hike places an additional burden on already struggling households and businesses, further exacerbating poverty and inequality. For many Nigerians, reliable access to electricity remains a distant reality, with power outages being a common occurrence in both urban and rural areas. Public Discontent The frustration and disillusionment stemming from these socio-economic hardships can fuel social unrest and exacerbate existing tensions within communities. On 27th February 2024, the Nigeria Labour Congress (NLC) held protests in Rivers, Bayelsa, Abuja, Kaduna, Lagos, Ogun, Kwara, Ondo and several other states over the high cost of living in the country. In March, residents from Omagwa in Ikwerre Local Government Area protested at the Port Harcourt International Airport in Rivers State over consistent power outages. The protesters also blocked the route leading to the airport. Precursor for criminal activities The ramifications brought about by fuel scarcity and higher electricity tariffs create a fertile ground for criminal activities to thrive. In such an environment, criminal elements may exploit the vulnerabilities of disenfranchised populations, further destabilizing the social fabric. Unemployed youths may turn to illicit means to sustain themselves, including theft, robbery, and vandalism. Moreover, the lack of affordable and reliable electricity further compounds the challenges businesses face, leading to closures and job losses. This economic downturn can push more individuals towards criminality as they seek alternative sources of income to survive. Conclusion The recent hike in fuel prices and other economic challenges have recently been a major driver of calls for protests and shutdowns by various civil society, workers’ unions, and pressure groups. Unions such as the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) have given the Nigerian Electricity Regulatory Commission (NERC) until 12th May 2024 to reverse the electricity tariff or face unprecedented industrial action. Protests would incur the deployment of security forces to locations which may likely lead to clashes between security forces and protesters. Also, criminal gangs may likely use the chaos to carry out crimes without disruptions. To address these issues, approaches including infrastructure investment, policy reforms, and effective law enforcement strategies to combat criminal activities are required. As Nigeria strives towards economic growth and social development, ensuring access to affordable energy and mitigating the impact of fuel scarcity are imperative steps towards fostering stability and security within the nation.