How NNPC contributes to rise in kerosene price in Nigeria

The hope of having the price of kerosene come down sooner has been dashed with the insistence by the Nigerian National Petroleum Corporation (NNPC) that it has foreclosed any plan of importing the product into the country in the nearest future.

This is contained in the NNPC report for the third quarter of 2016 on financial and operational activities, made available to Ripples Nigeria on Sunday.

According to the report, importation of kerosene has been left for the private sector in line with the directive by government to gradually eliminate subsidy on the product, which was gulping about $1bn annually.

“The NNPC has not directly imported kerosene into Nigeria since June 2016, but has been supporting marketers with the necessary logistics to have the product in parts of the country at affordable prices,” the report stated.

It stated that the last time the corporation imported kerosene into Nigeria under the direct-sale direct-purchase/offshore processing agreement (DSDPA) was in May 2016.

According to the report, “In the months of June, July and August of this year, the NNPC did not get a single litre of DPK under the DSDP/OPA. This is in line with the February announcement by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, replacing the crude swap arrangement with (DSDPA) framework, which took off in April 2016.”

This means Nigeria was able to save about $336.4million between April and July 2016.

But despite the claim, NNPC disclosed that for June, July and August, it supplied 1.18 billion, 798.33 million and 901.35 million litres of Premium Motor Spirit (fuel), via its various depots but none for kerosene.

Analysts gave the development as the main reason for the sudden scarcity of Kerosene, both for domestic use and industrial purposes, especially in the aviation sector.

The price of a litre of the product has been varying from one part of the country to the other, a situation that has seen a litre selling for N250 in Lagos and Abuja and N300 in other states.

By Emma Eke….