Scarcity of forex may drive Kerosene price higher
THERE are indications that prices of kerosene and diesel may further go up following acute dearth of the products, as marketers yesterday blamed the scarcity and hike prices of the products to unavailability of foreign exchange, FOREX, unpaid debts by Federal Government and other government’s harsh policies. The prices of the products have already gone up as kerosene is sold between N180 and N200, while diesel is sold between N150 and N187 depending on the retail outlet. A cross section of marketers who spoke to Vanguard on condition of anonymity, said there was a huge shortfall in the importation of these products because of scarcity of FOREX.
According to them, “The supposed FOREX liberalization is a big challenge to us, more especially to independent marketers. The current FOREX policy is on bidding and the highest bidder gets the available FOREX. Often, the bid gets to as high as N400 or more to $1 and some of us who cannot afford to keep up are discouraged from adding these products to our list of import. “Moreover, foreign banks have cancelled all credit lines issued to marketers because of unpaid debts owed them. FOREX has doubled from N197 to N287 a dollar 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 debt? 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.” They also decried policy inconsistency in the oil and gas industry, adding that such inconsistency was hindering the growth that would drive the sector as well as the economy. Corroborating the marketers, National Chairman, Surface Tankers Kerosene Peddlers, SUTAKEP, Benjamin Rotimi, lamented the unavailability of Kerosene across the country. According to him, “Kerosene is very scarce and it is not available. As we are aware, when it becomes scarce, its price is bound to go up. That is the state we are in now.” The independent depot owners in Lagos are not getting supplies. 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.”