Nigeria’s Emergency Fuel “Entrepreneurs” In An Obscure Economy

Taye Aiyedogbon yelled as he talked over the mobile phone: “No matter what, make sure you reserve at least two 50 litres for me o! I am sending my boy immediately. He will bring the money.”

Sitting with him at their Otun-Oba Roundabout hangout along Lawanson-Itire Road, three of his colleagues quickly made separate arrangements to also cash-in on the situation. As “free agents,” they are always ready for an opportunity to engage in anything that could potentially earn them their daily wage. It probably explains why being a fuel “black market” merchant seems appealing in Nigeria.
In this instance, Taye and his associates had just listened to the popular “Koko Inu Iwe Iroyin” (loosely translated as “Newspaper Highlights”) on Bond FM, 92.9. One of the major news headlines was about the threat by PENGASSAN to commence a nationwide strike due to what it described as government’s failure to implement the agreements they had reached together earlier. In other words, Nigerians should brace up for another round of fuel scarcity palaver.

These emergency fuel merchants need no further invitation to wade into the situation. For them, it is better to store sufficient stock early enough before the scarcity finally kicks in.
A Rampant Business

A typical situation in fuel stations across NigeriaHawking of fuel appears to be a lucrative business going by the number of people who participate in it whenever the scarcity season resurfaces. They certainly had a field day during the elongated period of scarcity that ended with the removal of subsidy and liberalization of the sector for oil marketers.
Agbebi Street in Ijesha, which is a walking distance from Otun-Oba, is a popular area for the sale of black-market petrol in Lagos. There, fuel sold up to N200 per litre during the scarcity period. The same goes for Lawanson Road leading to Ojuelegba where fuel can be easily bought at the black market. During the peak of the fuel scarcity, some sold the product for as high as N250 per litre.

Young, agile and aggressive-looking youths run the business along the whole intersection of Ishaga axis, where three petrol stations are located: Mobil, Conoil and MRS. As a result, commuting on that road can sometimes be a hellish experience.

While this describes just one major road in Lagos, the situation is not any better in several other areas. Indeed, reports indicate that before fuel scarcity becomes an issue in Lagos and other cosmopolitan cities like Abuja and Port Harcourt; it must have been a crisis in other parts of the country.

In a survey it conducted last December, Sweet Crude Report found that fuel black market is a thriving sub-economy. It also highlighted top black market spots in Lagos where Nigerians desperate for fuel go to buy the product.
This seasonal business thrives mostly because of how Nigerians have come to develop an almost total dependence on fuel for daily activities. Besides being the main driver of most automobiles, petrol also powers the economic activities of many local small and medium enterprises (SMEs). Due to erratic supply of electricity, people have resorted to exploiting alternative power sources to run their businesses. Over 80 percent of these are from fuel-powered generators.

“I spend N1500 daily to fuel my gen daily,” said Olaniyi Ige, who owns a computer workshop centre along Adeniyi Street in Itire.
“I make sure we get 10 litres of petrol, which normally lasts from the time we resume at 8am till closing time of 9pm. We cannot afford to be without light at any time of the day. Almost everything we do here depends on it. Yet, that is a cost that eats into our daily earnings significantly.”

Olaniyi is just one of the many small business owners that are being frustrated by the current situation with absence of electricity affecting their effectiveness.

In what has become a common sight in most parts of Nigeria; illegal sales of petrol resumes almost immediately during the regular episodes of fuel scarcity across the country. For instance, it was observed that black market hawkers in Abuja, Nasarawa and Kaduna sold the product on the major roads during the last shortage that almost paralyse the nation.

Regularly, men, women, boys, girls, and sometimes the gray-haired as well as the minors patrol the roadsides with jerry cans soliciting patronage for their prized commodities. Call them “fuel entrepreneurs” and you won’t be totally wrong; although that is a description that only fits occasionally.

Experts in the oil and gas sector have attributed this national malaise partly to the unfettered powers that the independent oil marketers wield. In a master class for journalists at the Pan-Atlantic University (PAU), illegal diversion of refined products sales to neighbouring countries often cause shortage in Nigeria.

This represents one of the many atrocities that oil discovery has done to Nigeria. As Dr Dauda Garuba of the Natural Resource Governance Institute (NRGI) alluded, Nigeria has lost several decades to oil theft that has impoverished her citizens rather than improve their conditions.

“Earlier hope that oil will translate into wealth and development has proved an illusion – corruption, waste, poverty, frustration and underdevelopment,” he said.
This probably explains why most oil marketers prefer to retail to black marketers than regular motorists because those pay more.

Understanding The “Black” Economy
This is how Nigerians get their lives going
Like his contemporaries who converge daily at the bus stop, Mr Aiyedogbon does not have a steady employment. Rather, he lives one day at a time, leveraging on the goodwill of his friend, Tajudeen, who introduced him to the “Chairman” who allowed him to be part of the system. Depending on how the day goes, he is expected to drop substantial part.

The job description changes often, ranging from serving as an “agbero” to collecting levies from commercial vehicle levies. Sometimes, it could be ensuring that heavy container vehicles pay before accessing the streets or demanding payment from builders of new properties. In the end, these “freelancers” occasionally become pawns in the hands of political gladiators.

Thus, black marker merchandising of fuel is not a totally open market per se. It is for the initiated and it is in the best interest of an outsider not to dabble into it without adequate information.
But, who received the order to reserve 100 litres of petrol? A fuel attendant with one of the major independent marketers in Nigeria, who is happy with the opportunity to make more money. Neither party consider what they are about to do to be illegal.

Indeed, the filling station attendants are key stakeholders in the “black market” economy. They determine who gets what quantity of the products, and can prove pivotal in the grand scheme of things. Once they can find buyers for their supplies at their preferred price, they close shop to other buyers.

At Total fuel station in Lawanson area of Surulere, Ahmed Azeez initially claimed that they (attendants) only follow instructions from the management. But observation by this writer shows that he and his colleagues are actually lords and masters in their rights.

Because there is no shortage of fuel at the moment, the attendants are eager to take as many people that want to buy petrol in a container. This is how they make extra money, as they charge an average of 50 naira per purchase for those who choose to keep their fuel in a jerry can. Like Taye.

Based on calculations from an hour-long study during an off-peak period, Ahmed retailed petrol to over 20 customers in various container sizes. That is N1000. Not bad for an extra income after every two hours; meaning he could potentially make between 5 to 10 thousand naira daily. Remember, this was money outside his basic salary.
However, investigations reveal that many petrol attendants are working because of the opportunity to earn extra and not necessarily because of their salary which they complain to be grossly inadequate. As people working in an oil sector, there are high expectations from their myriads of dependents. Sadly that appears to be the way it is in Nigeria.
But, should one really classify all those concerned with the fuel black market racketeering as entrepreneurs?
Media executive and business development consultant, Michael Eyakwaire said:

“As far as I know, entrepreneurship means solving societal problems profitably. In that sense, I would say, these guys are entrepreneurs in their own right.”
“They recognize that scarcity of fuel is a problem and they take advantage of the situation by first investing in the product early enough. Having taken the risk of storing the dangerous merchandise, no one should begrudge them of their earnings. We should rather salute their inventiveness. They are the real “hustle-preneurs” many would love to be. They get things done.”