- The average price per litre of Kerosene increased by 5.35% month on month, and 6.03% year-on-year between December 2018 and January 2019
- Consumers bought Kerosene per litre for ₦306.28 in January 2019 compared to ₦290 in December 2018.
- Average Price per gallon increased by 2.71% month on month and 5.09% year-on-year from ₦1,156.41 in December 2018 to ₦1,187.75 in January 2019.
- Jigawa witnessed the highest average price of Kerosene per gallon, while consumers in Plateau paid ₦1,056.25, the lowest price per gallon.
The Nigeria bureau of statistics (NBS) has released the report of the National Household Kerosene Price watch for January 2019. According to the NBS report, the average price of Kerosene per litre in January 2019 increased significantly by 5.35% month-on-month basis, and 6.03% year-on-year. It was reported that the price per litre of Kerosene increased from ₦290.74 in December 2018 to ₦306.28 in January 2019.
Furthermore, the report shows that at the state level, Abuja witnessed the highest average price of ₦305.75 per litre of Kerosene in January 2019, followed by Enugu where consumers bought Kerosene for an average price of ₦344.58 per litre. Lastly, Jigawa came third as Kerosene was sold at an average price of ₦341.31 per litre.
However, the average price per gallons took a different twist. Jigawa witnessed the highest price ₦1,367.14 per gallon and Kaduna came second as Kerosene was sold for ₦1,326.47 per gallon. Lastly, Enugu ranked third where consumers bought average per gallon of Kerosene for ₦1,325.95.
Also, Niger, Lagos and Taraba recorded the lowest average price of Kerosine in January. In Niger State, the price per litre in January was ₦253.47, Lagos ranked second as consumers bought for an average price of ₦260.78, and Taraba was the last state to have witnessed the lowest price of Kerosene in January 2019.
The categorisation by region shows that South-East witnessed the highest average price of ₦328.45, followed by North West with an average price of ₦313.88. South-South is the third region with the highest average price of ₦311.07, while in North central, consumers bought Kerosene for an average price of ₦298.61. The South West region ranked 5th in that order as Kerosene was sold at an average price of ₦296.23, and North East witnessed the lowest average price of ₦293.13 for the year under review.
Across the states of the federation in 2018, the average prices of Kerosene went for ₦288.57 in January, March (₦268.99), May (₦280.29), July (₦276.87), September (₦297.28), November (298.32) and December (290.74). However, in January 2019, the average price increased to ₦306.28.
Why Kerosene Price hike?
According to NBS Q3 data on Kerosene import in Q3 of 2018, Nigeria Kerosene import increased to 312.71 million litres in Q3 of 2018. This shows that with the high volume of import, the price of Kerosene in Nigeria is affected by a number of factors.
Basically, the exchange rate is an important determinant of the prices of imports. In a period when the exchange rate improves, the price of imports are likely to fall. On the other hand, when exchange rate deteriorates, import becomes more expensive.
Another factor is the demand for imports. For instance, a large percentage of Kerosene is imported from the U.S into Nigeria, the same country where Canada, Japan, Ghana and a host of other countries equally import. Traditionally, pressure on demand through market mechanism can increase price of any commodity. Both domestic of importing nation and foreign demand of exporting country can influence prices being quoted on exporting commodity.
Implication of Kerosene price hike
Increase in prices of Kerosene is likely to have an instant effect on both the investors and consumers. Whenever the price of Kerosene import increases, either through exchange rate or from exporting country, importers and distributors alike are bound to also react by increasing the market price for final consumers. Meanwhile, increasing the price may also likely reduce demand, as consumers may also opt for other substitutes of Kerosene.
The small or large business owners whose part of raw material or intermediate goods involve Kerosene usage will also be affected by Kerosene price hike. When business buys high for production, the tendency rises to also charge high for profit making. By extension, the burden will be shifted on the final consumers.