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Fuel dilemma for Nigeria's new leader

Tuesday, May 26, 2015 - 01:51

Chronic fuel shortages in Nigeria have severely disrupted telecommunications, banking and aviation. As Sonia Legg reports, the crisis comes just days before Muhammadu Buhari's inauguration as president of Africa's biggest economy and top oil exporter.

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A deal at last after weeks of chronic fuel shortages. Nigeria's fuel marketers have finally agreed to resume distribution. It's a massive relief for the phone companies, banks and airlines brought to a standstill by the crisis. But it'll take a day or two for supplies to filter through to customers and it gives Nigeria's new President a major challenge. Muhammadu Buhari takes office on Friday. (SOUNDBITE) (English) LAGOS RESIDENT, KAZEEM LAWAL, SAYING: "This man that is coming in now, I mean Buhari, before he can really get everything together, it's going to like take a while, because this government now has already spoilt everything." Nigeria is Africa's biggest crude producer. It exports two million barrels a day and relies on oil for 80 percent of its revenue. But it has to import nearly all the 40 million litres of gasoline it uses every day due to old or inadequate refineries. As a result fuel importers control the supply. They shut their depots in a dispute with the government over unpaid subsidies. Bismarck Rewane is an economist in Nigeria. (SOUNDBITE) (English) ECONOMIST, BISMARCK REWANE, SAYING: "This is the right opportunity to take out the subsidies, put the matter to rest and take out the subsidy system that actually creates this absurdity, this fraud, because these guys are blackmailing the country as a whole, and that cannot be accepted." But attempts by outgoing president Goodluck Jonathan to end subsidies in 2012 led to riots in the streets. Oil prices were far higher then than now. But gasoline prices would still jump by around a third if subsidies were removed. One estimate puts the cost of the recent shortages at five billion dollars. That's a hefty blow to an economy already creaking under the weight of slowing growth and rising inflation.

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Fuel dilemma for Nigeria's new leader

Tuesday, May 26, 2015 - 01:51