Opinion
We Need Petroleum Products
In recent times, the prices of petroleum products rose to the extent that citizens found it difficult to meet up.A situation where the price of petrol especially, is put at N170, N175 per litre in a country where crude oil is produced calls for concern.
Sometimes the problem may not come from the marketers but the authorities saddled with the responsibility of providing these essential commodities.I think one of the reasons for high cost of the products is the issue of importation and landing cost which according to some marketers make it difficult for them to break even.According to them, the marketers purchase from the major distributors at N161 or N162, and do not make any serious margin selling at N170 per litre.
When the present federal administration came into power a few years ago, the price of petrol was less than N100 per litre. They would always talk about subsidy removal and nothing reasonable to show from funds recovered from that.
How long will Nigerians continue to suffer with high cost of petroleum products? With epileptic power supply available, it is difficult for people to cope buying petrol at high cost to power their generating sets.
The chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Rivers State chapter, Dr. Obele Ngechu, said there was a looming petrol scarcity in the country and explained that high percentage of marketers were unable to get the products at the depots.
Motorists have been advised to avoid panic buying as the issue will soon be sorted out.
According to him, what is happening today in the international market, the rise, the upward review of crude oil is affecting the local market. The cost of gas is no longer the same. PMS is selling at over N170 or N180 in some stations. In the country today, you find out that the supply of petrol is not sufficient. Most petrol stations have run out of stock.
You imagine a situation where all the marketers will be requesting for petrol and only about 25 per cent will be able to get.
Last week, I had an experience of moving up to two or three filling stations in a particular area and none had a product.Cooking gas was also not there as they said they never had supply. When I finally got one, the price had increased.
I think there is need for Nigeria to fix the refineries and not wait or depend on private ones which may not be able to satisfy users.It is high time the National Assembly took a short-term approach to the situation by making emergency arrangement for approval for subsidy since it was not in the 2021 budget.
Let there be subsidy because it will be difficult for Nigeria to be buying petrol at the initial high rate when she is not paying subsidy.In any port in Nigeria, the landing cost of petrol is N190 per litre from the foreign market, according to the IPMAN chairman.
When these products are refined in Nigeria; for instance, kerosene prices definitely will be minimal for the masses. The kind of kerosene available does not look good.
IPMAN Chairman said adulterated kerosene has taken over the market due to the high cost of refined kerosene in the international market.His words: “All Nigeria consumes now is what they call “Kpo fire”, because kerosene imported from the international market now is very expensive, it will cost N300 to arrive Nigeria and you can see “Kpo fire” is the one refined locally and a lot of people are dying as a result of it.”
The implication is that hike in price of petrol will definitely affect transport fares. Motorists may want to increase fares to recover the cost and maximise profit, which is the mission of every business operator.
For the transporters who ply inter-state business with more quantities of fuel in some trips may also increase the fares to meet up. The rate at which people travel from one destination to another will reduce considering the high cost and scarcity of the product.
Although from December till now, with the price fluctuation, commercial vehicle operators have maintained their fares.We are aware that each time there is increase in pump price, prices of commodities rise because traders who deal on staple food especially the ones who go to “bush markets” will also increase price due to high cost of transportation.
Economic losses are always associated with high pump price because some commercial motorists can decide to withdraw from the business with the fear of not meeting up the turnover on a daily basis.
Sometimes car owners decide to keep their vehicles at home preferring to board public transport to work.
High foreign exchange is another issue affecting the major distributors from the international market and with high cost marketers find it difficult to cope.
Nigeria’s benchmark in the budget as it relates to sale of crude oil at the international market is pegged at $30 to $35 but crude oil is sold at $62 dollars per barrel.
Even cooking gas of 12.5 kg which was sold at N4000 for sometime now has gone up to N5000. This started gradually and unfortunately has not stopped till now.
As a result, some households have resorted to the use of kerosene and even firewood as their last option which, according to experts, is not advisable.
The government is supposed to subsidise the price for independent marketers and let the four refineries be fixed to function maximally, otherwise this current challenge in the petroleum industry will not do the citizenry any good.
We are not unaware that more private refineries are being established by individuals while some will be in operation soon, but let something be done as fast as possible because of the masses.
Since the four traditional refineries are not producing at full capacity, the government should set up additional modular refineries that should be able to refine fuel in Nigeria at the price that the marketers can afford and break even.
When this is done, the product will be readily available, the issue of high cost and sometimes scarcity of the product will be a thing of the past.
The Federal Government should, as a matter of fact, repair the refineries so that crude oil can be refined in Nigeria. If they have become so obsolete, then new ones can be built new ones.
By: Eunice Choko-Kayode
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