Business

Kerosene may hit all-time high of N200/L

There are concerns that Kerosene, a petroleum product mostly used by the poor may climb to an all-time high of N200 per litre, following government’s total removal of subsidy from fuel products.

This is even as Dr. Ibe. Kachikwu, the Minister of State for Petroleum/Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) said on Tuesday that the Federal Government did not pay any subsidy on petroleum products in January 2016.

Kachikwu, while addressing the House of Representatives’ Ad-Hoc Committee set up to investigate the NNPC’s offshore processing and crude swap arrangement for the period between 2010 to date, also noted that the country would save $1 billion (N200 billion) from the newly introduced Direct-Sale-Direct-Purchase, DSDP, arrangement in Nigeria’s crude oil for products transaction which is to commence next month.

Though government had fixed the pump price of Kerosene at N83 per litre, there are fears that with the removal of subsidy, coupled with its scarcity, the price of the product could climb to as high as N200 per litre in some parts of the country.

A number of marketers and dealers who spoke on the issue noted that before the new price announced by government, they sold the product between N100 and N150/Litre, but added, that with the new price, they will sell at even higher prices.

Though government had fixed the pump price of Kerosene at N83 per litre, there are fears that with the removal of subsidy, coupled with its scarcity, the price of the product could climb to as high as N200 per litre in some parts of the country.

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Some filling stations visited in Abuja, claim they have not yet purchased new stock since the announcement, while those that had the product were selling at N120 per litre.
A number of consumers also lamented, that there is no significant difference between when government was supposedly subsidizing the product and now, as they normally bought it product at N110 per litre before now.

Meanwhile, Kachikwu, told the House Committee that the DSDP was adopted to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement so as to introduce and entrench transparency in the crude oil for product transaction by the corporation in line with global best practices.

According to him, the DSDP option eliminated all the cost elements of middlemen and gave the NNPC the latitude to take control of sale and purchase of crude oil transaction with its partners, adding that the initiative would save one billion dollars for the Federal Government.

The Direct Sale-Direct-Purchase alternative allows for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.

Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.

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Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
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