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Why Kerosene price droped by 21% in Q3’ 17

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…As average price for 9 months stands at N304 per litre
…Unaffordable for many households

By Prince Okafor

THE price of kerosene dropped by 21 per cent in the third quarter (July-August) of 2017, as a result of increased importation of the product into the nation.

Investigations by Vanguard showed that the fall in price was fuelled by massive importation of the product to meet domestic shortfall.

Figures obtained by Vanguard from the Nigerian National Petroleum Corporation (NNPC) showed that the apex oil company imported 127,071, 174.38 litres in February alone.

This which was about five times higher than its regular imports and others culminated in increased availability of the product nationwide.

Consequently, the average price of kerosene dropped from N290.5 recorded in the second quarter to N256.38 per litre in the third quarter of the year.

Despite the drop, the price of kerosene remained high and unaffordable to many consumers, especially households.

According to the Nigeria Bureau of Statistic, NBS, the average price of the product stood at N304 per litre in the first nine months of 2017.

NBS disclosed that the product was sold at an average of N433.84, N352.42, and N311.30 in January, February and March respectively in the entire states of the nation.

Specifically, the price of the product dropped to N280.80, and rose again in May to N303.29 in the period under review.

Also, in June, the product also dropped to N287.27, and continued on a steady decline to N280.489, N225.52 in July and August.

Investigations by Vanguard showed that many households were not able to procure the product as a result of the high price.

Despite the drop in the nation’s inflation rate to 15.98 per cent in September from 16.01 per cent recorded in August, the NBS disclosed that the average price per litre paid by consumers for National Household Kerosene increased by 17.28 percent month-on-month and decreased by -8.38 percent year-on-year to N264.48 in September 2017 from N225.52 in August 2017.

The agency also stated that Plateau (N316.67), Yobe (N294.44) and Kaduna (N294.12) were the states with the highest average price per litre of kerosene.

It said: “States with the lowest average price per litre of kerosene were Abia (N240.56), Edo (N240.00) and Ekiti (N233.33). Similarly, average price per gallon paid by consumers for kerosene decreased by 0.45 percent month-on-month and by 16.35 percent year-on-year to N973.72 in September 2017 from N978.10 in August 2017.”

The Nigerian National Petroleum Corporation, NNPC, stated in its July 2017 report: “The petroleum products (PMS and DPK only) production by domestic refineries in July 2017 amounted to 80.18 million litres compared to 186.26 million litres in June 2017.

“A total of 1,121.92 million litres of white products were distributed and sold by PPMC in the month of July 2017 compared with 1,205.97 million litres in the month of June 2017. This comprised of 1,003.01 million litres of PMS, 41.67 million litres of Kerosene and 77.24 million litres of diesel.”

Finding showed that a total of 32,213,822 litres of kerosene were produced from the nation’s local refineries, which is the lowest since the beginning of the year 2017.

No import in 5 month

According to the Head of Energy Research, EcoBank, Dolapo Oni, “kerosene imports have been really low this year. According to the NNPC report for July, there were no import between March and July.

In addition, Oni said foreign exchange was responsible for the rise in the product since kerosene is deregulated.

Consumers narrate ordeal

According to a community health worker in Olodi Apapa, who simply want to be addressed as Obiageli, “The whole thing happening in the country today needs serious attention. Before the issue of kerosene, I used to complain about power supply. It’s been three months since we last enjoyed power supply in my area. I depend solely on kerosene stove to iron my office wears. Now the price of kerosene is so terrible to afford. How can I buy a litre of kerosene for N290 just to iron my clothes or do other stuff?

“It’s so annoying. I am not happy. The situation is causing pain to many households. We feel neglected and rejected by our leaders. Government officials and top politicians are not experiencing all of this. For the sake of the poor, our government should rise and make better plans for all Nigerians.”

NNPC’s intervention

Mr. Ndu Ughamadu, Group General Manager, Group Public Affairs Division, NNPC disclosed in a telephone interview: “The effort of the new administration to revamp the nation’s refineries, located in Port Harcourt, Warri and Kaduna, is yielding result.

“That particular period in question, the refineries produce at an average of 60 per cent, and bulk of the kerosene consumption was produced by the refineries, particularly Kaduna and Port Harcourt.

“The most important thing in the market is availability, and if NBS report say 17.28 percent, that’s insignificant compare to the time when price rose up to 300 percent, it’s a manageable figure, and the refineries demand recommendation.”

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