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FEATURE: Kerosene Subsidy Illusion: Nigerians Buy At High Price Despite Subsidy

The Nigerian government pays millions of Naira in subsidies daily to help reduce the cost to as low as 50 Naira, but the average Nigerian buys the … Continue reading FEATURE: Kerosene Subsidy Illusion: Nigerians Buy At High Price Despite Subsidy


Kerosene queue.The Nigerian government pays millions of Naira in subsidies daily to help reduce the cost to as low as 50 Naira, but the average Nigerian buys the product at a price almost triple the official rate.

It is the most popular fuel for domestic cooking in Nigeria, but the high cost is making life difficult for Nigerians who depend on the product to cook, light their lamps – lack of electricity- and even (Atupa) lamps at night markets.

Channels Television’s correspondent, Seun Okinbaloye, investigated the pricing of the product and how the average Nigerian struggles to buy and is ripped of his little earnings even as subsidy payment on the product continues.

Where does the subsidy money go? What is being subsidised?

Nigeria has over 30 million households; 90 per cent of these cook at least once everyday with fuels like kerosene.

The Bureau of Statistics says an average household spends about 500 Naira on food daily, but spends half that amount on kerosene daily.

Although there are huge health, environmental and economic benefits of switching from kerosene to gas for cooking, but gas is perceived as a rich man’s product.

Nigeria holds the world’s seventh largest gas reserves and is among the world’s top oil producing countries.

Despite this, more than 100 million Nigerians are unable to afford electricity or gas and greater chunk of these number are stuck with kerosene.

The Nigerian government pays subsidy on kerosene and so they require marketers to sell kerosene below market rates. It pays the marketers the difference between the market price and the government-approved retail price of 50 Naira. The Nigerian National Petroleum Corporation (NNPC) is the sole importer of the fuel but even at their own retail filling stations you hardly will find the product being sold let alone getting it at the retail price.

Seun moved around town and found the prices of kerosene written boldly on the signs as 50 Naira, but the reality is that it’s hardly sold at that price. In fact sometimes it is sold three times more.

When he visited some filling stations, starting with government owned NNPC the discovery was shocking, Kerosene was not available for sales.

From NNPC to yet another one, again, it’s a sorry tale.

At another private filling station, this time the product is available but the retail price of 50 Naira boldly written on the ‘price sign post’ is just a deceit.

It appears most people have lost hope in the filling stations and for people living in the interiors some roadside retailers are common place.

Wahab Arowosaiye, one of such retailers, has been in the business for many years. He said the product is sold to them at 130 Naira per litre and he sells at between 135 to 140 Naira.

An economist, Bismack Rewane, said that the high price of the product was as a result of the fact that Nigeria’s Kerosene serves dual purpose – as aviation fuel and domestic use.

The situation is not any better in some other parts of the country.

In an area like Port Harcourt at the heart of Nigeria’s oil producing region the situation is pitiable, even though some of the oil products are explored in their backyards, with a saddening story of polluted water and land, here, kerosene is gold.

The situation in the south may be dire but one can only imagine what goes on up north.

The Osonwa’s have a family size of about nine. They reside around new extension area of Kaduna State. Kerosene is what they use for their cooking but their story is not pleasant.

“We buy one bottle (1.3 litres) for 150 Naira. In a month, we spend more than 7000 Naira to cook. Even though you go to the market to buy food stuff, the kerosene to cook it with is the problem,” a member of the family said.

The essence of the subsidies on kerosene is to ease pains on the average Nigerian but, increasingly, the situation is looking rather hopeless.

Figures like a whooping 700 million Naira is spent on subsidising kerosene daily but the effect is not felt by Nigerians. Where do we go from here?

Mr Rewane suggested a total removal of the subsidy and a reinvestment of part of the funds into the education and productive sectors.

What has been done about the situation? Many will ask.

A lawyer, Femi Falana, stressed that “it is the duty of the government to do something about the anomalies and corruption that have swallowed-up the implementation of the subsidy.

A few people benefit from the subsidy while the poor groan over the scarcity of kerosene and the high cost of the available quantity. The essence of the subsidies appears lost, one hopes the dilemma will end soon.

But one question we ask is: Is it not better Subsidy on Kerosene is removed?