ActionAid chides govt over removal of kerosene subsidy

*Kerosene queue at an NNPC filling station.

*Kerosene queue at an NNPC filling station.

28 January 2016, Sweetcrude, Abuja — ActionAid Nigeria, an anti-poverty agency has raised concerns over the increment in the price of kerosene from N50 to N83 per litre, saying that the decision of the Federal Government to hike the price of the product is targeted at plunging more Nigerians into poverty.

Ms. Ojobo Atuluku, Country Director of ActionAid Nigeria, in a statement in Abuja, disclosed that Federal Government’s decision to remove subsidy on kerosene which has led to the increase of pump price of the product, signifies a continuation of a worrying trend of regressive policies that are emanating in recent times.

These, she said, include the recently imposed stamp duties on banking transactions amounting to one thousand Naira and the increase in the electricity tariff.

She said, “The increase in the tariff, contrary to the claim of the Federal Minister of Power, Works and Housing cannot be in the interest of the poor whose income will be further depleted by the additional cost imposed on them without assurance of any added value.”

Atuluku lamented that kerosene is mostly used by the poor who have no safer means of preparing meals and lighting their home in the face of unreliable electricity”.

She further stated that with the rising cost of living, the government decision will further aggravate the state of hardship of the citizenry.

“Many of these citizens already have their resources depleted by local and states governments in the federation who are subjecting them to multiple taxation in the form of duties and levies,” she added.

Atuluku also called attention of the federal government to the fact that those to be affected by the increase in the price are also the poor who rely on recently banned small generators.

The Petroleum Products Pricing Regulatory Agency, PPPRA, had a few days ago, increased the price of Household Kerosene from N50 to N83.

The agency had stated that the N83 per litre price applied only to the Nigerian National Petroleum Corporation, NNPC, outlets. The template also showed that at N83, the Federal Government will be making a gain of N10.72 on every litre.

It further puts the expected open market price, which is the landing cost plus total margins at N72.28 per litre. The expected open market price is the prevailing open market rate for the product in Nigeria, after taking certain costs into consideration.

Giving a breakdown of the price, the PPPRA template put the landing cost of ‎the product at N57.98 per litre, while the total margin due‎ middlemen was put at N14.30.

The retailers’ margin was put at N5 per litre; transporters at N3.05 per litre, and dealers at N1.95 per litre.
It further put the bridging fund at N5.85 per litre; marine transport average at N0.15 and Administrative‎ Charges – N0.15.

About the Author