Kerosene out of reach for oil-rich Nigeria's poor

July 25, 2011 - 8:43 AM
Nigeria Kerosene

In this Monday, July 11, 2011, photo, residents use charcoal to prepared a meal in Lagos, Nigeria, because kerosene for burners in their kitchen is too expensive to use. In this oil rich country, kerosene has become one of the most sought after fuel products, with prices rising sharply above the government subsidized price as 'middlemen' take advantage of the situation, which leaves many families unable to pay the price and now forced to cook on open fires. (AP Photo/Sunday Alamba)

LAGOS, Nigeria (AP) — It's been five months since Toyin Felix last cooked dinner for her family in her kitchen. The price of kerosene is so high this mother of four now builds a fire outdoors with wood instead.

"My son helps me to blow when the firewood won't catch fire," she says.

Gas stations in this oil-rich country advertise kerosene for 30 cents a liter, but it actually sells for about three times that.

When asked to sell kerosene to a customer, one gas station attendant compared it to royalty: "You are asking for the king," he said. "The king is not around."

The status of kerosene, long considered gas' poor cousin, only recently rose to become one of the most sought-after fuel products in the resource-rich West African nation. Many are taking advantage of the situation.

Because of government subsidies, kerosene is supposed to only cost 30 cents a liter. But middlemen are reselling it so many times among themselves that it reaches the end-users at highly inflated prices.

It turns into an expensive — and time-consuming — odyssey just to stay in business for many.

"You waste a lot of time buying kerosene and they tell you to pay money before they even sell anything to you," said Anthony Anyi, a 27-year-old kitchen assistant who feeds some 300 people a day at his roadside restaurant from a stove made out of a recycled car rim.

Levi Ajuonoma, a spokesman for Nigeria's state-run oil company, said the government is trying to rein in profiteering middlemen by delivering 30-cent-a-liter kerosene directly to households in a few neighborhoods.

"It's a pilot project for now ... but middlemen will see that if they do not sell as we tell them to, they will have to drink their kerosene," he said.

But kerosene is also becoming hard to find for cooking because it also can be sold as jet fuel.

"As a marketer I'm faced with the option of selling my dual purpose kerosene as household kerosene or as jet fuel," explains Agusto & Co Oil & Gas analyst Dolapo Oni. "Most settle for jet fuel and inadvertently create the scarcity that leads to household kerosene being sold at about the same price."

In the commercial capital of Lagos, heavy rains have reduced the combustibility of cheaper alternatives such as firewood and charcoal.

Funke Ola, known as Madam Charcoal in her neighborhood, is happy for the extra business at her wooden stall. But the seller, whose hands are covered in ash, acknowledges people still can't do without kerosene.

"When the charcoal is dry it takes less kerosene, when it's wet it takes more, but my customers always need kerosene."

Chukwuma Awaegwu, a 37-year-old fashion designer, had to borrow money from a friend to buy a gas cylinder so that he could start using gas.

"We used to think that gas was for the rich, but gas is more affordable and easier to get than kerosene," he says.

The issue with gas, however, is that it requires more capital. The most easily available gas cylinder (12.5 kilogram) costs $77 on average and just over $20 to refill. The cheapest gas stove goes for about $20 — extra costs that the majority of Nigerians cannot afford.

Oando PLC, a major energy company, has introduced a 3-kilogram cylinder with an incorporated gas burner that costs customers about $32 plus usage. Gas may be dispensed into the cylinders using a metered pump.

"It makes a lot of sense," says Junior Kanu, a New-York based household energy consultant whose work has taken him to remote parts of Nigeria where open firewood fires are the norm. "Gas is so much better for your health, it's also cleaner and safer."