THE EFFECT OF FUEL SCARCITY ON NIGERIAN ECONOMY: A SPECIAL REFERENCE TO UYO URBAN

CHAPTER ONE

INTRODUCTION

1.1     GENERAL BACKGROUND TO THE SUBJECT MATTER

Just like water and air are important to the living human being for daily duties and hitch-free survival, the importance of fuel to automobile cannot be over looked. A typical situation is in the case halts because of the fact that there is shortage of fuel. The importance of fuel in this our developing and technically inclined economy is fast like the mixture of oil and salt as far as the economy forgets growth as one of its goals. Fuel is used in a variety of activities ranging from production, mobility, cooking, electricity supply, sources of foreign exchange, to mention but a few. To this extent one would accept that fuel plays a great role in the life of every citizen of the country and the country as a whole.           However, in recent times, there has been a rampant shortage in the availability of the commodity. It is on this basis that the researcher intends to evaluate the causes and effects of fuel scarcity in the Nigerian economy, but shall concentrate on Uyo urban as a case study due to time and financial constraints.

Effects of Fuel Scarcity          

Fuel is a form of energy, according to Longman English Dictionary; fuel is a form of energy used for the energizing of the machine used for production. In that case, its scarcity will affect the living standard of the people in various ways. a.   It increases the cost of transportation b.   Electrical faults c.   The cost of food items and living d.   Social unrest e.  Adulteration of fuel and so on.           The effects of fuel scarcity in Uyo metropolis cannot be over emphasized for it is one of the very prayers for the entire economic attribute to move about. During 1998 February 12, business activities in Akwa Ibom State was brought to a light because there was no fuel. In the state, vehicles were seen in long queues in the filling stations even when there is fuel at the filling station or not. Commuters were stranded in the various bus stops with no hope of motor coming to take them to their various destinations.            Consignment upon this prices of commodities skyrocketed so much beyond the reach of the buyers “News watch publisher Vol.12 November in 1996”. The perennial fuel scarcity in Akwa Ibom State has fired production companies to produce at a low capacity, with high price, since the fuel which is used as a nourishing material to the machine which is suppose to be used in production is scarce to get and when gotten the price is 300% (three hundred percent) increase more than the former price. This is why most companies’ products are costly and these tend to scare customers away from the products. Also from the statistics available transportation costs have gone up considerably, making it difficult for customers to get to their various destinations.           A journey that normally costs ten Naira (N10) a drop now costs twenty Naira (N20) to forty Naira (40) a drop, which represents a total increase of 200 percent. Conversely the daily spending of the average citizen has increased due to the sky rocketed increases in foodstuff, which was occasioned by the fuel scarcity. Furthermore, lateness to duty or offices has been heightened as a result of lack of commuter buses and taxis to take them to their various destinations. To this end, the effect of fuel scarcity is so great that most indigenes of Akwa Ibom State and non-indigenes of Akwa Ibom State metropolis are suffering untold hardship.  

1.2    PROBLEMS ASSOCIATED WITH THE SUBJECT MATTER

Problems associated with the effect of fuel scarcity in Nigerian are as follows: Lack of Qualified Personnel Poor Management and Maintenance Hoarding of Fuel Inconsistent and Poor Government Responses. All these draw a set back on the smooth running of fueling supply. Hoarding fuel is a big problem because it makes some drivers to pack their cars at home and break to where they are going or enter transport. It is also a problem to students because sometimes student don’t go to school simply because there is no fuel in the filling stations because vehicles cannot move without fuel.  

1.3    PROBLEMS THAT THE STUDY WILL BE CONCERN WITH

The objective of this study is to provide solutions to the above problems the following hypothesis will be looked into. Good management and maintenance Consistent and good government response Government should enact embark on policies        that will facilitate easy flow Government should try and reduce the price of        fuel to be affordable by everybody.

1.4    THE IMPORTANCE OF STUDYING THE AREA

Fuel scarcity is a big problem now in Nigeria and it has caused so many things in our country Nigerian. The importance of studying the area is: To know how to organize things in other to achieve the set down goals or objectives. The fuel industry is not a place to exhibit favoritism. There was a case of a young daughter of a    Minister, a graduate of English in one of the Nigerian Universities. She was employed in the fuel industry to head a department tagged with the allocation of fuel to different parts of the country. Is she supposed to be there? No is the answer. She messed up the economy by not allocating purely on the basis but on a system no one can explain. “Tell on 24 Nov. 17, 1996”. Moreover, the important is to know how to handle the facilities used for production of fuel; to avoid the increasing breakdown of facilities and consequently going up in flames like Kaduna refinery. The fuel is very important product to the country’s economy and for its economic attributes to work out well, it must be readily available anytime it is needed.           Another importance of studying the areas is to know knowledge of does and don’t of the fuel industry not to be interested on how to make our own quick money by all available means. To stop hoarding of fuel so that there will be easy flow of fuel, because this hoarding of fuel contributes in punishing the innocent citizens by creating artificial scarcity. To stop struggling of fuel because it is now a common thing in the society. The news is not new to the people. In 1992 Nigerian lost about N54.8 million out of N22.1 million due to smuggling of fuel.  

1.5     DEFINITION OF IMPORTANT TERMS COMMUTER

It is a person who makes a regular journey of some distance between home and work especially by trains.

ROCKETED:  It is the rising quickly and suddenly of the price. CONSIGNMENT:  It is the act of sending something to person or place for sale METROPOLIS:  It is a chief city or the capital city to a country RAMPANT:  Widespread and impossible to control

CONSTRAINTS:  It is the threat or use of force to direct the action of others. HITCH:  It is to fasten by looking a rope or metal part over another object.

MOBILITY:  It is the state or quality of being movable or able to move quickly and easily. Not fixed on one position.

SMUGGLING:  It is the act of taking from one country to another unlawfully especially goods without paying the necessary tax. HOARDING:  It is the act of storing secretly especially more than is allowed.