- Stakeholders Advocate Involvement of MFBs to Tackle Kerosene Scarcity
Stakeholders in the oil and gas sector have advocated the involvement of microfinance banks in the distribution of kerosene to address the scarcity of the product.
They said the involvement of the banks would not only bridge the gap between suppliers and end users, but also ensure the right pricing of the product.
This position was canvassed in Calabar, Cross River State, when members of the House of Representatives Committee on Petroleum Resources (Downstream) inspected tank farms at the Calabar Free Trade Zone as part of their oversight function.
The Managing Director of Fynefield Petroleum Limited, Mr. Akshay Saxena, said some middlemen who had the resources to buy the product from depots and sell to retailers were responsible for the hike in the price of kerosene.
According to him, retailers of kerosene are mostly small business owners who do not have the finance and storage facilities to buy more than 5,000 or 10,000 litres of the product.
He said because retailers of the product had no large storage facilities, it was easier for the middlemen buying at discounted prices from depots to sell to retailers at higher prices on credit.
Saxena, therefore, suggested that microfinance banks could take over the role of middlemen by providing credit facilities to retailers at a much more reduced rate.
He said, “Middlemen, who have money to buy large quantity, end up getting huge discounts from depots. They then go to these retailers and supply at an exorbitant price on credit basis. These retailers have no option than to accept it that way.”