The current scarcity of kerosene has forced the price to skyrocket thereby causing untold hardship to millions of Nigerians that use the product.
Kerosene, a product mostly used by low income earners to cook and other sundry uses, has now gone beyond the reach of the poor.
Besides, the diversion of the product for use as aviation fuel has further compounded the situation. Furthermore, the recent increase in the price of cooking gas which has piled more demand pressure on kerosene. Many retail outlets in major cities where the loading depots for the product are situated have been hit with the shortage of the product.
A litre of kerosene which once sold between N150 and N165 earlier in the year, now sells for between N200 and N250 depending on the location and outlet while in the “black market” the price ranges between N260 and N300.
Why the scarcity
The official price of kerosene was initially regulated at N50 and N83 per litre between January and May 2016 but by May 11 when the Petroleum Products Pricing Regulatory Agency,(PPPRA), announced the new N145/litre price band for petrol, it failed to do so for kerosene.
It subsequently deleted kerosene pricing from its template signalling a full deregulation of its market.
The Pipelines and Products Marketing Company, (PPMC), the fuel marketing arm of the Nigerian National Petroleum Corporation (NNPC), had been the major importer of the product with most independent marketers depending on PPMC depots for kerosene.
However, since the deregulation of the kerosene market, the PPMC has drastically reduced imports leaving major marketers to bridge the shortfall.
NNPC in its June operations report revealed that it did not import Dual Purpose Kerosene, (DPK), or kerosene for the month, a development that may have triggered the scarcity and price increase nationwide.
The corporation, according to the report, relied on domestic production of 119.5 million litres from the refineries which was grossly inadequate to satisfy around 11 million litres daily kerosene demand in Nigeria.
The NNPC has lately curtailed petroleum product importation as a result of decline in petroleum product sales by 13.30 per cent and an increase in products distribution costs.
Also, the scarcity of foreign exchange (forex) has prevented marketers from importing the product to complement NNPC imports.
The Executive Secretary of Major Oil Marketers of Nigeria, (MOMAN) Mr. Femi Olawore disclosed in a recent media interview that even with the recent policy of floating rate for the dollar by the Central Bank of Nigeria, (CBN), it is still difficult for marketers to get dollars for kerosene import.
Marketers, he said, have to source for forex from the “black market” at a rate of over N378 which is even not readily available. He said the totality of it is that marketers are not importing kerosene, as there is no forex.
The National Treasurer of the Independent Petroleum Marketers Association of Nigeria, (IPMAN), Barrister Dibu Aderibigbe, in a recent interview with Daily Trust blamed the situation on the NNPC.
“As far as DPK (kerosene) is concerned, NNPC is not distributing through any other marketer but their service outlet, if there is a hike NNPC is purely responsible for that,” Aderibigbe said.
Also speaking in the same vain, Olawore the MOMAN scribe said the small quantity of kerosene available from refineries is sold at exorbitant price.
“I want to make it clear that major oil marketers have protested to the PPMC management because the allocation of small quantity of kerosene available is skewed in favour of other marketers. In most cases, we are completely denied kerosene supply,” he said.
Also giving reasons for the scarcity and persistent price hike, the South-West Chairman of Nigeria Union of Petroleum and Natural Gas Workers, (NUPENG), Alhaji Tokunbo Korodo said non-loading of petroleum products at NNPC depots was responsible for the hike in kerosene price.
Korodo, in an interview with the News Agency of Nigeria, (NAN), said the System 2B pipeline used by NNPC to pump petroleum products from Atlas Cove in Lagos to Mosinmi, Ibadan, Ilorin and northern parts of the country had been shut down about two months ago. Korodo said marketers in the South-West were forced to patronize private depot owners where they bought the product at high rates.
He said: “Since May, loading of products at the depots has stopped, thereby making marketers to look for petroleum products, especially kerosene, at private depots in Lagos.”
This fact, he said, has also contributed to the increase in the pump price of kerosene because it is cheaper at NNPC depots nationwide.
An official of the IPMAN, Alhaji Abubakar Maigandi, said “from private depot we buy at the rate of N182 per litre and sell N200 and above at retail stations.”
Kerosene users, dealers groan
Many Nigerians have described the scarcity and resultant high price of kerosene as very painful.
Households have been either forced to resort to charcoal or invent other means to minimize kerosene consumption.
Mrs. Mary Abiodun, a housewife in an Abuja suburb said she has switched to the use of firewood because kerosene is now too expensive.
“I buy kerosene for N250 per litre and I always buy at black market. However, the family just realized it is no longer sustainable. So, we still buy kerosene not for cooking or as much as we used to, but to simply light up the firewood. I do not like using firewood because it pollutes everywhere but I have no option for now,” she said.
For Mrs. Oloyede Adebowale, she has been alternating between gas and kerosene to cook since kerosene price increased.
“Gas was my major cooking fuel but since the price of gas went up, I have been struggling to combine both even though the price of kerosene has increased too. It is better for me this way because I use kerosene for food that takes time to cook like beans and moi-moi but gas for those foods that don’t consume time,” she said.
A fast-food vendor in Lokogoma market, Abuja, Muhammad Abbas, said he has had no challenge so far with sourcing kerosene but that his major problem is the high price.
“In January, it costs N150 per litre but now it is sold for N300 and increasing,” he said.
A widow and mother of three, Mrs. Jacinta Brown who lives at Tudun Wada village, Lugbe, expressed concern that more than half of her domestic spending is now on kerosene.
“It is tough for me and my children because what we now spend on kerosene is more than on food. Firewood is not an alternative here but we have been managing with charcoal. The only problem is where I buy the charcoal is far and with the rainy season it is difficult getting charcoal to buy when required,” she said.
A kerosene vendor, Mrs. Evelyn Isiguzo said she has been buying the commodity at between N220 and N215 per litre recently depending on the filling station.
“I don’t buy from just one. Customers complain that it is too expensive and also is not profitable for me as a seller. Government should endeavor to reduce the price,” she said.
A “black market” dealer, Ishiaka Ibrahim said he used to buy a 25 litre jerry can at N5000 since January but it is now N7000.
Despite the current challenges, some respite seems to be around the corner with IPMAN said it was partnering with some major stakeholders to import kerosene and diesel.
The National president of the association, Mr Chinedu Okoronkwo said IPMAN had been given license to import kerosene and diesel, adding that it had also concluded agreements with its foreign partners to finance the importation in a couple of weeks to ease the hardship Nigerians are going through.