Marketers blame hike in kerosene, diesel, cooking gas prices on products scarcity •As Nigerians groan

There are strong indications that unfavorable foreign exchange regime may have caused marketers to stop importation of Household Kerosene which has resulted into product scarcity and Nigerians are groaning over the rising prices of these petroleum products which have continued to soar high amid economic hardship.

Investigations by the Nigerian Tribune on Monday revealed that petroleum products that are very relevant to the masses like the household kerosene and Automotive Gas Oil (AGO) called diesel are now selling for above N250 per litre while Liquefied Petroleum Gas (LPG) otherwise called cooking gas is selling for N3,500 per 12.5kg cylinder.

Executive Secretary, Depot and Petroleum Marketers Association (DAPPMA), Olufemi Adewole, blamed scarcity of foreign exchange for the hike in pump price of petroleum products, while chatting with the Nigerian Tribune via telephone interview.

According to him, “the reasons for the hike in price could be attributed to scarcity of foreign exchange. Marketers find it extremely difficult to import kerosene due to huge gap between the official exchange rate and the parallel market rates. For instance, a dollar is selling at N285 at the floating market while it is selling at N360 to a dollar at parallel market.

“The perfect alternatives the country has are the refineries. But our inability to refine kerosene locally also contributes to the hike. It’s not as if marketers are not importing, but it is not in sufficient quantity. Marketers that bring in products will have to recoup their investment.”

In his opinion, the Public Relations Officer, Independent Petroleum Marketers Association of Nigeria (IPMAN), Western Zone, Alhaji Abdul Lateef Jaiyeola, argued that “because diesel has been deregulated, value of Naira in exchange to a dollar will translate to hike in pump price of diesel. On the other hand, scarcity of foreign exchange has discouraged marketers to import kerosene while the Nigerian National Petroleum Corporation (NNPC) which has been importing kerosene for marketers has also stopped importing the product.

“They rely on kerosene from refineries, mainly Warri and Port Harcourt refineries. But recent attacks on the pipelines and other oil installations have reduced output from the refineries. Another important factor that is responsible for increase in pump price of kerosene is that it is being diverted into aviation fuel. Liberalization of foreign exchange rate has resulted into expensive imported Jet-A1 fuel otherwise called aviation fuel. And because kerosene can be re-processed into aviation fuel, many marketers may have been diverting the product.”

The National Controller, Operations, Mike Osatuyi, said due to inability of some marketers to settle their debt obligations to foreign suppliers, “many of them have stopped supplying us. And scarcity of foreign exchange has discouraged marketers from importing kerosene.”

The Corporate Affairs Manager, NIPCo Plc, Taofeek Lawal, argued that many marketers no longer import kerosene, saying “most of the oil marketers import diesel and petrol; they are not importing kerosene now because they believe that it will not sell fast. This is why the price is on the high side because the demand is now more than the supply.”

On the hike in price of cooking gas, efforts to speak with the Executive Secretary, National Association of LPG Marketers (NALPGAM), Bassey Essien, proved abortive as calls out across to his line were not answered.

On his part, the South-West Chairman of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Tokunbo Korodo, urged the Federal Government to make a clear policy on kerosene.

“The government has deregulated diesel and petrol, but it is yet to make clear policy on kerosene. This has made the product to be sold for as high as N240 per litre in most filling stations. Most of the filling stations, especially NNPC mega stations in Lagos do not have the product, thereby forcing masses to buy from road side marketers,” he said.

He argued that kerosene has not been deregulated based on the Federal Government policy on the product.

“Part of the excuse given to us was because of the hostility in the Niger Delta which has reduced the capacity of the refineries. The increase in the price of kerosene has also triggered up price of gas which is now between N4,000 and N4,300.

“Kerosene is the only product that is accessible to rural and urban women and government needs to explain to us why the product is more expensive than diesel and petrol now. For kerosene to be sold for more than N200 at pump price is uncalled for and government should look inward and address it urgently,” he said.

However, a source in the LPG sub-sector who preferred anonymity stated that the price should have gone down following intervention of the PPMC. According to him, “before now, all LPG from NLNG was being diverted to one terminal owned by NAVGAS. But the intervention of the government through the PPMC has ensured that LPG is being discharged in other terminal like NIPCo terminal and others.”

He argued that Nigerians will soon witness decline on price of cooking gas.

In a chat with the Nigerian Tribune, a trader, Bolanle Oladosu, said the price of kerosene has become unbearable. She argued that in her area, a four-litre keg of kerosene is being sold at N1400. “I have been forced to switch to cooking gas because a 3-kg cylinder costs me N1000 to fill and will last me as much as kerosene would do,” she said.