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IdentifierCreatedClassificationOrigin
07LAGOS92 2007-02-08 07:03:00 UNCLASSIFIED Consulate Lagos
Cable title:  

FUEL CRISIS IMMOBILIZES SECTIONS OF THE SOUTHWEST

Tags:   EPET ENERG ASEC PTER NI 
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VZCZCXRO1455
PP RUEHMA RUEHPA
DE RUEHOS #0092/01 0390703
ZNR UUUUU ZZH
P 080703Z FEB 07
FM AMCONSUL LAGOS
TO RUEHZK/ECOWAS COLLECTIVE PRIORITY
RUEHUJA/AMEMBASSY ABUJA PRIORITY 8310
RUEHC/SECSTATE WASHDC PRIORITY 8482
INFO RUEHWR/AMEMBASSY WARSAW 0123
RUEHCD/AMCONSUL CIUDAD JUAREZ 0103
RUEHIT/AMCONSUL ISTANBUL 0110
RUEHSO/AMCONSUL SAO PAULO 0121
RUFOADA/JAC MOLESWORTH AFB UK
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
					  UNCLAS SECTION 01 OF 02 LAGOS 000092 

SIPDIS

SIPDIS

DOE FOR GPERSON, CGAY
TREASURY FOR ASEVERENS, SRENENDER, DFIELDS
COMMERCE FOR KBURRESS
STATE PASS USTR FOR ASST USTR FLISER
STATE PASS TRANSPORTATION FOR MARAD
STATE PASS OPIC FOR ZHAN AND MSTUCKART
STATE PASS TDA FOR NCABOT
STATE PASS EXIM FOR JRICHTER
STATE PASS USAID FOR GWEYNAND AND SLAWAETZ
WARSAW FOR LISA PIASCIK
CIUDAD JUAREZ FOR DONNA BLAIR
ISTANBUL FOR TASHAWNA SMITH
SAO PAOLO FOR ANDREW WITHERSPOON

E.O. 12958: N/A
TAGS: EPET ENERG ASEC PTER NI
SUBJECT: FUEL CRISIS IMMOBILIZES SECTIONS OF THE SOUTHWEST

REF: LAGOS 54

LAGOS 00000092 001.2 OF 002




1. (SBU) Summary: A visit by Poloff to the Southwest showed
traffic sharply reduced and long fuel queues in every major
city. With suppliers ordered to give priority to Lagos and
Abuja, other cities had to grapple with not knowing when more
fuel was coming. One distributor admitted to hoarding fuel
until paid the subsidy owed by the Petroleum Support Fund.
Even as commerce slowly crept back to normal, high prices
remained and long-distance commerce continued to be severely
affected. End summary.



--------------------------


Traffic Drastically Reduced in the Southwest


--------------------------





2. (U) During late January visits by Poloff to the
Southwest, traffic in most places was light. The fuel
shortage has drastically reduced long-distance travel on the
normally busy Lagos-Ibadan-Akure highway. Highway vendors
found little business, and the police had shorter than normal
queues at their checkpoints. In Ibadan and outside Lagos,
trucks without fuel remained parked along the highway. While
the official government price remained posted at 65
naira/liter or approximately $1.92/gallon, the black market
price motorists paid was closer to 120 naira/liter or
$3.54/gallon.



--------------------------


Ibadan at a Standstill as Supplies
Go To Lagos and Abuja


--------------------------





3. (U) Poloff arrived in Ibadan to observe streets virtually
empty. Traffic more resembled a Sunday morning than a normal
weekday. The traffic was light enough to cut travel times in
sprawling Ibadan by half what Poloff has experienced on a
normal business day. Ibadan's largest market, Dugbe, was
virtually shut down, with only a handful of vendors at their
stands. Retail stores had empty parking lots. Mostly
everyone was searching for fuel. The queues at the petrol
stations were enormous. Most of the stations were not even
open but motorists waited in wishful anticipation of the
possible availability of fuel.



4. (SBU) S.A. Oladiti, a fuel distributor who owns four
stations in Ibadan, told Poloff that the crisis in Ibadan
began before the Christmas holiday and had virtually shut the
city down. Oladiti blamed government inaction and vandalism.
Vandalism had wrecked the major pipelines to Lagos, Oladiti
commented, putting three of the four pipelines out of
commission. In the absence of the payment of arrears owed
him by the Petroleum Support Fund (PSF), Oladiti planned to
keep his stations closed to avoid selling at the regulation
price.



5. (SBU) Perhaps to quell potential unrest in the country's
two most important cities, Oladiti told Poloff Nigeria
National Petroleum Company (NNPC) had ordered suppliers to
give priority to Lagos and Abuja by diverting fuel from other
locations. Oladiti did not foresee the government solving
the crisis unless it can end the vandalism.



--------------------------

--
Sections of the Southwest Reach Normal Activity


--------------------------

--

LAGOS 00000092 002.2 OF 002





6. (U) Visits by Poloff on January 22-24 to the state
capitals of Lagos, Ekiti, Osun, and Ondo States revealed an
increased amount of road traffic. Still long fuel queues
remained. Lagos traffic appeared to be coming back to normal
after the previous week. Ado-Ekiti and Oshogbo had
near-normal levels of traffic compared to Poloff's previous
visit to the cities in September 2006. Akure, capital of
oil-producing Ondo State, appeared to have the longest queues
and very light activity at its main markets. Long-distance
traffic remained very light, with most trucks parked in Lagos
or Ibadan. The black market price motorists paid remained
120 naira/liter or $3.54/gallon.



--------------------------


Comment


--------------------------





7. (SBU) In none of the states visited did Poloff hear of
social disturbances resulting from the prolonged shortages.
People have gotten used to fuel scarcity, particularly at the
beginning of the year. Instead of anger boiling over, the
majority response was to attempt to cope with the hardship of
higher costs. The black market price had not fallen from 120
naira per liter, but commerce in parts of the Southwest
appeared to be moving back to normal. Nevertheless the
shortages have had an appreciable impact on the local
economy. End comment.

BROWNE