Nigeria’s debt, forex scarcity may force hike in Kerosene, Diesel

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

NEWSVERGE reports 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.

The marketers said, “The supposed forex liberalization is a big challenge to us, especially to independent marketers.

“The current market policy for marketers is pegged on bidding and the highest bidder of an available forex gets it.”

Often, the marketers stressed that the biding 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.

“Moreover, 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? A marketer asked.

“We are quite aware that if there is scarcity, prices cannot be controlled. If there is forex, we would import and the prices will crash evenly at the market.

“On the contrary, we are most worried that most Nigerian banks will fold up due to huge debts outstanding from the marketers.”

The marketers however frowned at policy inconsistency in the oil and gas industry, adding that such is hindering growth that will drive the sector as well as the economy.

Meanwhile, the National Chairman, Surface Tankers Kerosene Peddlers (SUTAKEP), Comrade Benjamin Rotimi, lamented unavailability of Kerosene across the country.

Comrade Rotimi, explained that the scarcity of kerosene is call that always resulted in increase in price. “The independent depot owners in Lagos are not getting supplies and the pressure is on Warri refinery and if enough is refined, there will be more to distribute and the price will be at equilibrium.

“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.

“The way out of this mess is for the federal government to adopt its strategy used on PMS, where products are distributed to Mossimi, Ibadan. If such is also used for Kerosene, we will avert these trauma currently bedevilling kerosene prices,” he added.

NEWSVERGE however gathered that the 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.