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Artificial scarcity pressures diesel prices

By Prince Okafor

ARTIFICIAL scarcity has hit diesel market with depot prices souring to between N252 and N258 last weekend.

Meanwhile, National Bureau of Statistics (NBS) said that the average price paid for kerosene by consumers in November 2016 stood at N282.86, about 3.4 per cent when compared to an average of N292.73 in October 2016. But the November price still stood toweringly 88.6 per cent above the N150 Federal Government’s price tag given on the product largely used by low income earners. Ogun State, South West Nigeria, recorded the highest price of N327.92 per litre of Kerosene in November.

According to the National Household Kerosene Price Watch report released by the NBS, Lagos emerged the second state that sold the product above government recommended price of N150/ litre, selling at N316.23/ litre in the State, while Abia State where it sold for N299.90/ litre, came third. However, Vanguard gathered that marketers of the product have been lamenting that there is no possibility of getting the product at the official price, unless they cut-corners.

Most of the filling stations selling kerosene between N230 and N240 as the pump price claim it is due to the additional money on transporting the product, as well as some other levies paid by marketers.

Meanwhile, the NBS report stated that Niger State recorded the lowest price at N254.63/ litre. Other States that had the product at a little bit above the benchmark price are Borno and Abuja where it was sold at N256.48, and 259.52 respectively.The report also said that Rivers State, South-South Nigeria, recorded the highest price of N220 per litre of Automotive Gas Oil (AGO) popularly known as diesel in November.

In the NBS monthly AGO Price Watch report, Borno State dealers sold the product  at N206.25/ litre, while in Kebbi State it sold for N208.64/ litre. The national average price paid by consumers in November 2016 stood at N195.67 as against N187.25 paid in October 2016, a 4.5 per cent increase. The product’s price is deregulated.

Artificial scarcity hits diesel market: Meanwhile, Vanguard investigation show that depots around Apapa and Ibafon areas now sell Diesel at an exorbitant price of 252/litre.

A source at Ibeto Jetty said that scarcity of the product is the cause of the current increase in price, as most depots are dry. According to a source at Apapa depot, “Ships will be coming in between mid to end of January, 2017.

“Once AGO comes in, people that have products will want to sell off cheaper and face new stock because the competition would have risen as supply increased.”

He also said that the price jump has nothing to do with foreign exchange, FOREX.  “It is an artificial price increase caused by low supply or stock hoarding. Oando, MRS and Total bought the last set of AGO that were brought on December 14, 2016. “Prices would likely go up till new stock arrives. I haven’t seen this kind of price rise for AGO in depot.  It’s very strange,” he added.

Current hardship

“We at Ibeto have AGO, so we seized that opportunity to increase the price to be able to meet up the current hardship in the country. As at last Wednesday, we sold the product at N250, now we are selling at 252/litre. Other depots have resorted to trading of PMS,” he said.

When contacted, Obafemi Olawore, Executive Secretary, Major Marketers Association of Nigeria, MOMAN, said he would not comment as he was still on vacation in the village. Also, Chinedu Okoronkwo, factional President of Independent Marketers Association of Nigeria, IPMAN, said he would respond to enquiries when he comes back from holiday.



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