How to Stop Kerosene Scarcity

Fri, Dec 28, 2012

By publisher

4 MIN READ

Kerosene dealers want the federal government to grant import licence to marketers as a way of breaking NNPC monopoly on kerosene importation

|  By Anayo Ezugwu  |  Jan. 7, 2013 @ 01:00 GMT

HAS government deregulated the price of kerosene? This is the question on the lips of most consumers of the product. Although the regulated price of kerosene is N50 per litre, most filling stations sell it at between N120 and N150 per litre. For instance, a five-litre gallon of kerosene is sold at between N600 and N750 instead of N250 which is the regulated price.

Mama Remedy, a businesswoman in Lagos, is one of those not happy with the high cost of kerosene and wonders why filling stations would be selling the product above the recommended price. But the agonising aspect of the problem is that the product is hardly available at filling stations. The scarcity of kerosene has forced many consumers to depend on black marketers for their supplies. “This is frustrating. Kerosene is an essential commodity, it is central to our living as Nigerians and it surprises me that government allows us to pay a high price before getting the product even when it’s available. I prefer to buy from the black market because if you buy a five-litre gallon from there, you know that it is truly five litres rather than buying from the filling station where they will cheat you,” Remedy said.

Angelina Kelechi, a public servant in Lagos, is another person who is not comfortable with the situation. Kelechi could not recall when last she bought kerosene from a filling station because she has been depending more on the black market. “I found it annoying that you buy kerosene at almost the same price you buy at the filling station,” she said, urging the government to address the problem so that kerosene would be affordable for the people.

Our investigations at many of the filling stations have confirmed that kerosene is sold above the regulated price in many filling stations. Some of the managers, who spoke to Realnews on condition of anonymity, said the price of kerosene had gone up because the Nigerian National Petroleum Corporation, NNPC, has the monopoly of importing and distributing the product. One of them said most of the stations which currently have kerosene paid more to get it through their personal efforts.

“Since the NNPC monopolises importation of kerosene, we sell according to the price we bought from them. And you must know that the price is not stable in the international market. It is only in the NNPC filling stations that you can buy a litre of kerosene at N50, but the question is: How many of them have the product?” said one of the managers.

He also said that the price would continue to increase unless the NNPC monopoly is broken. According to him, it is about time the government deregulates the price of kerosene, and also give import license to the marketers in order to break the monopoly of the NNPC in the product.

When the magazine visited the NNPC filling station at Iba, Ojo local government area in Lagos state, there was no kerosene for sale to consumers. One of the pump attendants said the product had not been supplied to the depot in the last four months. Efforts to get the NNPC to react to the allegation failed. But according to sources close to the NNPC, the decision to import kerosene to supplement its production at the local refineries, was borne out of the desire to prevent what would have amounted to a national disaster because some major marketers have since stopped kerosene importation. Besides, they also divert kerosene allocated by the NNPC to them to the aviation sector for use as aviation fuel.

The national daily demand for kerosene is estimated at between eight and 10 million litres, of which 35 per cent is produced locally. Hence, the country has to import the remaining 65 per cent to meet the national demand.

The inability of the local refineries to produce enough kerosene as well as other petroleum products has also been attributed to the increase in the price of the product, especially now that kerosene production has declined with only few refineries producing it worldwide. If the situation persists, there are fears that Nigerians may be pushed to look for alternatives such as coal and fire woods to do their cooking.