Nigerians pay more for kerosene, diesel

•HHK sells above N200 a litre as marketers divert product to aviation fuel
• Petrol scarcity looms

Efforts by the Federal Government to ensure kerosene remains affordable are being undermined by spiraling price of the product, which now sells between N200 and N300 per litre.

Also, Automotive Gasoline Oil (AGO), known as diesel, which used to sell between N110 to N130 per litre, now goes for N200 per litre.

The country may also witness another round of scarcity of Premium Motor Spirit (PMS) this week because government and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) are yet to reach agreement on how to resolve the ongoing strike by oil workers. Consequently, the union has stopped lifting of petroleum products from all its depots nationwide.

The Federal Government had, in January this year, officially ended the controversy on subsidy for kerosene by raising the price from N50 per litre to N83.

According to the last revised template of the Petroleum Products Pricing Regulatory Agency (PPPRA), the landing cost of the product is N57.98 per litre, while the total margin due for middlemen was put at N14.30.

Further breakdown of the total margins showed that retailers’ margin was N5 per litre; transporters, N3.05; dealers, N1.95; bridging fund, N5.85 per litre; Marine Transport Average, N0.15 and admin charges, N0.15. The PPPRA put official ex-depot price — which is the price depot owners would sell to marketers — at N68.70 per litre; official ex-depot price for collection, N73 per litre; while ex-coastal price was N68.02 per litre.

Kerosene has become so scarce and expensive because some marketers divert it to aviation operators who find it cheaper than jet fuel (Jet A1) used to power airplanes.

The substitution of aviation fuel with kerosene has become an industry norm and it is not hidden from stakeholders.

Also, diesel has become expensive following inability of marketers to import the product due to scarcity of foreign exchange.

A marketer told The Guardian that many depots in Apapa had run out of diesel.

Another marketer explained: “The diesel market is deregulated, which allows marketers to sell the product at a competitive price. Any marketer selling the product at above N200 may have also paid high prices at the depots.”

Many filling stations visited in Lagos yesterday did not have kerosene and diesel. A few filling stations that had the products were selling them at cut-throat prices — ranging from N200 to N250 per litre.

PENGASSAN, while giving update on its strike, said there was total compliance in government agencies, as workers stayed away from their offices. Offices of the PPPRA, Nigeria Nuclear Regulatory Agency (NNRA), Pipelines and Products Marketing Company (PPMC) and the Petroleum Equalisation Fund (PEFMB) were locked.

PENGASSAN said the strike action was not only about the members of the association but the survival of the oil and gas industry in Nigeria.

Its National Public Relations Officer, Comrade Emmanuel Ojugbana, said, “The inability of the government to fund the Joint Venture (JV) operations and settle cash call arrears has denied the country of new investments, while the existing operations and activities are being stalled. This has resulted in lack of new job opportunities, while our members, who have been in employments, are losing their jobs because their employers could not meet salary obligations to them.”

According to Ojugbana, “the Union demands immediate action of government to address these cash call arrears to avoid imminent collapse of the industry. The government must provide feasible guidelines to clear all outstanding payments and evolve a pragmatic system of funding the joint operations.”