On January 24, 2015, the news came that the Federal Government had hiked the pump price of kerosene, from N50 to N83 per litre. By that, the government has, in fact, removed the “subsidy” on kerosene. Curiously, this new pump price, according to the template released by the Petroleum Products Pricing Regulatory Agency (PPPRA), applies only to the Nigerian National Petroleum Corporation (NNPC)’s outlets. In essence, other filling stations in the country are at liberty to sell at varying higher prices. And this they will do in an outrageous manner.
Prior to this hike, the official pump price of kerosene at NNPC filling stations was N50 per litre, while other stations sold it at various higher prices, mostly at double the official price. This never had any positive impact on the availability of the product. As a matter of fact, only few filling stations dispense kerosene. The recurring lengthy queues for it at NNPC mega stations, such as the one in Wuse Zone 1, Abuja, are nightmarish. Many people spend almost a whole day on queues for kerosene at NNPC stations. By limiting the application of the new pump price to NNPC stations, the government has taken poor Nigerians from frying pan to fire.
By the price hike, the government still regulates the pump price of a product whose distribution it claims to have deregulated. I am not an economist, yet I know that regulation and de-regulation are antithetical and opposite. This reminds me of an Igbo saying that one cannot bestride a farmland and its boundary simultaneously.
Earlier, few Nigerians had welcomed the very minimal reduction in the official pump price of petrol. But many dismissed it as of no moment and not reflective of the fallen price of crude oil. Unfortunately, whatever gain that may be attributed to the negligible drop in the pump price of petrol has been cancelled by the hike in that of kerosene. There is also the question of whether the price of kerosene, a byproduct of crude oil, should go up amidst the sliding price of crude oil?
Only few homes in Nigeria do not use kerosene daily. In the rural areas and suburbs of our urban cities, kerosene is part of daily life. People who cook with firewood or charcoal or kerosene stove need it to ignite fire. If kerosene sold at over N150 per litre when its official pump price was N50, its price will certainly skyrocket in filling stations other than NNPC’s. There are genuine fears that it may hit N200 per litre. Worse still, NNPC filling stations have not lived up to the reason for their establishment. Instead of rescuing Nigerians from the recurring hoarding and artificial scarcity of petroleum products, they have joined the evil cartel. Most of them are always shut in the daytime, and only open at odd hours to dispense petroleum products to black marketers at high prices.
Has it ever occurred to successive governments in Nigeria that a substantial reduction in the pump price of kerosene can translate to a decline in the indiscriminate felling of trees and check deforestation? I doubt. Successive regimes noisily announce a resolve to fight deforestation but either do nothing concrete to that effect or adopt the wrong approach. Former President Jonathan had, on 26 November, 2014, approved above N9.2 billion for the procurement of cooking stoves for distribution to rural women, out of which N5 billion was released. Their distribution, supervised by the Federal Ministry of Environment, was kicked off by then Vice President Sambo on 26 May, 2015.
The government had claimed the project would lessen rural dwellers’ reliance on firewood for cooking, and reduce deforestation and its attendant effects like loss of tree species, desertification and global warming. These are very good motives and goals. But they would remain a mirage. This is not because the cooking stoves may never reach their intended beneficiaries as, like fertilizers and insecticide-treated mosquito nets, they will be hijacked by bureaucrats for sale to traders.
Rather, the project will fail to achieve its goals because kerosene is more expensive than firewood and charcoal. Again, while the procurement of kerosene is generally stressful, it is very convenient to buy firewood and charcoal. The sale of firewood and charcoal has become a thriving business in nooks and crannies across the country. Huge heaps of firewood and charcoal are found in many residences around Nigeria. Daily, hewers of wood go on rampage, cutting down trees, as others burn felled trees to produce charcoal.
So, if the government is serious about fighting indiscriminate tree felling and desertification, mindful that forest guards seem to have disappeared from our clime, it should make kerosene far cheaper and more convenient to procure than firewood and charcoal. For instance, while kerosene sells for above N150 per litre, a cellophane bagful of charcoal goes for around N50, and a handful stack of firewood goes for N100. It costs more to operate a kerosene stove, but costs far less to use firewood or charcoal. Even families which use cooking gas, still have standby kerosene stoves and charcoal pots. By increasing the price of kerosene, the Nigerian government is unwittingly encouraging Nigerians to persist in felling trees for the cheaper firewood and charcoal, and inadvertently aiding and abetting deforestation and beckoning on its side-effects. A revisiting of the hike in the pump price of kerosene is recommended.