Nigerians groan as scarcity of kerosene and increase in the price of cooking gas in the country worsens with the regulatory agencies unable to solve the problem which has been on for about two months
| By Anayo Ezugwu | Aug 1, 2016 @ 01:00 GMT |
NIGERIAN masses are going through a harrowing time now. This is not just because the country’s economy is in technical recession with its attendant inflation rate of 16.5 percent as at June. But the scarcity of Kerosene is making the commodity which many households rely on to light their stove to cook food is making their life miserable. The price of the commodity has also gone up from the official price of N83 per litre to between N250 to N600 depending on which area of the country one lives. To make matters worse, the price of cooking gas has also gone up, making it unaffordable to some middle income earners who have turned to Kerosene as a cheaper source of energy thereby contributing to the high demand for the scarce product with limited supply. The scarcity has hit major cities across the country, with most retail outlets in Lagos, Ogun, Oyo, Enugu, Akwa Ibom, and Abia States out of stock.
This is why Gift Okonkwo, a resident of Ajuwon, Lagos, is lamenting that she is spending half of the money meant for her family’s upkeep to buy only kerosene. She told Realnews: “Kerosene is very expensive now. Presently, it’s more expensive than the food we cook with it. Unlike before I now spend more money to buy kerosene to cook food like beans.” According to her, the cost of a measure of beans with Derica cup is N150 and the ingredients used to cook it cost about 50k while she buys more than N250 worth of kerosene to cook it. She said: “A litre cannot possibly cook a Derica of Beans. For a family of four, five litres of kerosene lasts for seven days without the family using it to boil hot water for bathing the children. We are spending at least N4500 every month to buy kerosene to cook. And this is actually affecting the family’s meagre income,” she said.
Another resident of Ajuwon, who identified herself as Mummy Joy, told that the rising price of Kerosene had made it difficult for the poor to buy the product for cooking. “I sent my daughter to the filling station to buy kerosene, thinking it was still N180 per litre. To my surprise, my daughter came back without the product, telling me that it was selling for N220 per litre at the filling station. How do we survive in this country when the last hope of common people to cook their food is no longer available? The government should not continue to watch the masses suffer, they should come up with palliatives to save us,” she said.
Also, Blessing Amah, a resident of Lagos, said she had changed from using cooking gas to kerosene. She said the increase in kerosene price had, however, also pushed up the price of cooking gas. “Even now, the price of gas has increased; before 12.5kg cylinder was sold for N2,800, but now it is N4,000 while 6kg cylinder is N2,000.” She also pleaded that government should help and do something about this increase, the masses are suffering.”
The experiences of Amah, Okonkwo and Mummy Joy, represents what many Nigerians are passing through on a daily basis to provide food for their families. Women and Children now trek miles in search of a filling station that sells kerosene wasting time and energy that should have been deployed to do other things. Some spend hours in the filling station queuing to buy the product.
In spite of several complaints by Nigerians, the federal government and its agencies in charge of the downstream sector of the oil and gas industry have failed to provide any explanation for the rise in the prices of the commodities.
The Consumer Price Index, CPI, released by the National Bureau of Statistics, NBS, on Monday, July 18, showed that the increase in the price of kerosene was among the highest of all other commodities in the month of June 2016.
Although the price of kerosene has been partially deregulated over the years, government still monitors how much it is sold so that those importing the product do not rip off consumers. On January 24, the government hiked the price of Kerosene to N83 per litre from N50 per litre, in order to end subsidy on the product. Incidentally, that policy is having no positive effect on the erratic supply of kerosene.
The federal government and its regulatory agencies in the downstream sector such as the Department of Petroleum Resources and the Nigerian National Petroleum Corporation, which also imports the product have not explained why the product is scarce. However, Realnews reports that the recent upheavals in the downstream sector with the vandalisation of product pipelines and scarcity of foreign exchange could have combined to make it impossible for marketers to get the product to dispense to the public. There is also the allegation that kerosene is being diverted to neighbouring countries as some of the sharp practices by middlemen.
In the case of cooking gas, it is also being alleged that there is a conspiracy between the officials of Petroleum Products Marketing Company, PPMC, and Nav Gas, a subsidiary of Vitol Group, to manipulate prices for profiteering. The idea is that when a ship load of gas arrives from Bonny to discharge the product at PPMC multi products terminal, officials allegedly divert the vessel to Nav Gas terminal.
The diversion helps Nav Gas create a monopoly of the product and subsequently create acute scarcity to fix arbitrary prices and make a lot of money to settle PPMC officials. Ordinarily, as Nav Gas and PPMC are supposed to get supplies of the product at the same time from PPMC terminal, other markerters such as Conoil, Nipco, Mobil, and others will key in their hose to take the product to their own tank in their plant. But because of this diversion only Nav Gas gets delivery of the product.
This notwithstanding, Femi Adewole, secretary, Depot and Petroleum Marketers Association, DAPMA, attributed the scarcity of kerosene to shortage of foreign exchange. Adewole said the price may continue to soar higher as a result of the inadequacy of foreign exchange. He said at the moment, there is a shortage of kerosene at the tank farms and that majority of the marketers do not have the products allocated to them. He blamed the Nigerian National Petroleum Corporation, NNPC, for the woes faced by kerosene marketers.
“You should ask the NNPC because we have not been receiving kerosene, we do not even know that the product still exists. The same challenge that we have with the PMS in sourcing foreign exchange is the same we have with AGO and Kerosene,” he said.
Similarly, Kudo Eresia-Eke, general manager, External Relations of the Nigerian Liquefied and Natural Gas, NLNG, said that infrastructure bottlenecks and not scarcity are the real reason behind the rising cost of cooking gas nationwide. Eresia-Eke named shortage of terminals for the discharge of LPG in the country, storage facilities at the terminals and delays in getting the product from the terminals, as the reasons why the price of LPG is on the increase. He stated that hitches in areas such as transportation of LPG from the NLNG’s base in Bonny, Rivers State to Lagos and distribution of the product to consumers, is the bane of the sub-sector.
The issue, he said made people to conclude that LPG is scarce in the country. “The increase in price of LPG was caused by infrastructure problems, and not scarcity of the product. Only two terminals were dedicated for the supply of LPG in Nigeria. The terminals, which are based in Lagos, are: NAFGAS Terminal and the Northern Oil Jetty, NOJ, which is being managed by the Products and Pipeline Marketing Company, PPMC, on behalf of the Nigerian National Petroleum Corporation, NNPC. “The terminals are not only limited, but were made to give priority to supply of white products such as petrol, diesel and kerosene. This has made it difficult for LPG vessels to discharge its content promptly enough,” he said.
Supporting, Tokunbo Korodo, South-West chairman of the Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, said there had been no loading of products at the PPMC, depots since May 31. Korodo said the situation had resulted in the increase in prices of kerosene and diesel, as oil marketers sourced for the products in private depots in Apapa, Lagos.
Most of the private depots sell a litre of diesel for N180 per litre while kerosene is sold for N200 per litre.
Nonetheless, the PPMC has said it will probe the allegation by some marketers that its officials connived with some terminal operators in Lagos to divert LPG vessels and create monopoly in the supply of LPG. At a recent inauguration of the Nigerian Association of Liquefied Petroleum Gas Marketers, NALPGAM, Building and Resource Centre in Lagos, Ahmed Farouk, managing director, PPMC, said the company would not tolerate any form of monopoly in the industry. “I am hearing this for the first time. I have been executive director for nine months and I am hearing this for the first time but I am not holding brief for anyone; if this is substantiated, we will take steps. If you have any evidence, please, bring it to my notice. No one in their right minds will take that step to frustrate efforts of bringing the LPG closer to the people. I will look into it,” he said.
The danger in the scarcity of the commodities, especially kerosene is that it is now being adulterated and this could cause explosions, which poses a threat to life and property. There is the recent explosion of gas cylinder in Edo State, resulting in the death of three persons with many others injured.
Kerosene scarcity has also forced many households to resort to dirty energy such as firewood and charcoal for cooking in spite of the health and environmental hazards they pose.
According to the World Wildlife Fund, WWF, use of firewood as cooking fuel accounts about half of the trees that are removed from the forest illegally, most significantly in developing countries such as Nigeria. The National Geographic reports in deforestation overview indicate that 70 percent of the plants and animal species on earth live in the forests.
The complex nature of the forest ecosystem means that deforestation usually leads to a domino effect, hence driving a reasonable number of species to the point of extinction owing to the destruction of their natural habitat. In Nigeria, it has been estimated that 899 species of birds, 274 mammals, 154 reptiles, 53 amphibians and 4715 species of higher plants will be strongly affected by deforestation.
Whatever, the NNPC, PPMC and other regulatory agencies should work hard to flood the country with kerosene and cooking gas to crash the price and reduce the suffering of the masses.