Marketers attribute high price of kerosene to forex scarcity, inconsistent policies

Indications have emerged that the prices of kerosene and diesel may increase, as petrol marketers continued to suffer under unavailability of foreign exchange (forex scarcity), federal governments’ debts and harsh policies.

National Daily gathered that the prices of the products had shot up as kerosene sold between N180 and N200, while diesel sold between N150 and N187 depending on the retail outlet.

Petroleum Marketers though said there is huge shortfall in acquiring the products as they have to pay more to source forex, which according to Central Bank of Nigeria (CBN) will be bided for.

According to the marketers, forex liberalization is a big challenge, especially to the independent marketers.“The current market policy for marketers is pegged on bidding and the highest bidder of an available forex gets it.”

One of the marketers who spoke on conditions of anonymity said the bidding for forex as stipulated by the Central Bank of Nigeria is as high as N400 or more to a $1 which many of them could not afford to keep up and as thereby discouraged many of them from adding the products to their list of import.

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He said foreign banks have cancelled all credit lines issued to marketers on the basis of prior debts owed them, which has doubled from N197 to N287 and more depending on the selling point.“What this means is that for a debt of N4 million at N197 to a dollar, we are expected to pay about N83 million at the current price regime. How do we get such money to import if government does not pay it outstanding? He queried.

The National Chairman, Surface Tankers Kerosene Peddlers (SUTAKEP), Comrade Benjamin Rotimi, said independent depot owners in Lagos are not getting supplies.“All NNPC depots across the country have not loaded Kerosene for the past 20 years. And if NNPC depots are not getting kerosene, we are then left at the mercy of private depot owners with ‘crazy price’ regime.

He said the way out of the scarcity is for the federal government to adopt the strategy used on PMS, where products are distributed to Mossimi, Ibadan.” If such is also used for Kerosene, we will avert these trauma currently bedeviling kerosene prices,” he added.

Investigations show thatthe agency in charge of petroleum products pricing, the Petroleum Products Pricing Regulatory Agency (PPPRA) had since May 2016, when the new price of Premium Motor Spirit, PMS, was announced, stopped updating the pricing template for kerosene and diesel products.