Fuel Adulteration Looms over Drop in Kerosene Price

Group Managing Director of NNPC, Dr. Maikanti Baru (right) received the LOC of the 2018 Nigeria Oil & Gas Industry Games (NOGIG), led by the Chairman, Mr. Aminu Zaria in Abuja last week

Following the drop in the price of kerosene by 21 percent in the third quarter of 2017, fresh indications have revealed that adulteration looms in the country, even as downstream professionals have warned that the price of kerosene must not be reduced any further than the diesel in order not to encourage the ‘rice and beans’ (adulteration) syndrome.

 A downstream operator, Olanife Adeoye told Shipping Position Daily last week in Lagos that one of the factors that encourage fuel adulterators is when there is a significant increase in the price of Automotive Gas Oil (diesel) over the Dual Purpose Kerosene (kerosene).

 

He noted that in recent times, the ex-depot price of kerosene has dropped further to N179 per litre while price of diesel at the depot is N184 per litre. Meanwhile, our correspondent gathered that kerosene is sold at the filling station for N200 per litre while diesel is sold for N205.

 Speaking, Olanife who is also an executive of the National Union of Petroleum and Natural Gas Workers (NUPEN) raised concerns that, getting petroleum tankers to load petroleum products at the tank farms located along Coconut axis of Apapa-oshodi expressway is now proving difficult due to the dilapidated state of the Apapa-Oshodi expressway.

 “I don’t pray that the price of kerosene should drop, if the price of kerosene should drop further lower than the diesel, this would encourage adulteration and pollution which we normally refer to as ‘rice and beans’

“When the price of kerosene was higher, it totally removed the business of adding kerosene and diesel together. The price of kerosene is now about N10 lower than the AGO, it was higher than the AGO before. Today the price of kerosene is N179 while AGO is N184”

“As the diesel is crashing, the kerosene price is also crashing. If the price of the product falls too much, it would encourage some people to start diluting the product”

The operators also lamented to Shipping Position Daily that there is no trucks to load product at the depot. He said that “To get to the depot today is hectic, we have the tankers, the containers and the bad road, they had to station a container master permanently here this week because of the frequent falling of containers around the depot”

Mr. Ndu Ughamadu, Group General Manager, Group Public Affairs Division (NNPC) confirmed the drop in price of kerosene by 21 per cent in the third quarter (July-August) of 2017, he said this was as a result of increased importation of the product into the nation.

NNPC data showed that the apex oil company imported 127,071, 174.38 litres in February alone. This which was about five times higher than its regular imports and others culminated in increased availability of the product nationwide. Consequently, the average price of kerosene dropped from N290.5 recorded in the second quarter to N256.38 per litre in the third quarter of the year.

 

The NNPC spokesman disclosed in a telephone interview that “The effort of the new administration to revamp the nation’s refineries, located in Port Harcourt, Warri and Kaduna, is yielding result”

 

“The most important thing in the market is availability, and if NBS report say 17.28 percent, that’s insignificant compare to the time when price rose up to 300 percent, it’s a manageable figure, and the refineries demand recommendation.”

 

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