Oil magnate Femi Otedola [pictured] has reduced the price of House Hold Kerosene (HHK) in his fuel stations in a move that could spark off a price war among the country’s oil marketers.
On Monday, the Nigerian billionaire, who is the chairman and controlling shareholder of Forte Oil, a publicly-listed Nigerian oil marketing company, ordered all Forte oil retail outlets across Nigeria to henceforth sell HHK at N50/litre (25 U.S. cents), down from the current market price of N125 per litre (62 U.S. cents).
In a press release issued to Nigerian journalists, Forte Oil said the company’s decision to slash the price was in furtherance of Otedola’s decision to identify with President Muhammadu Buhari’s bid to lighten the burden faced by millions of low-income Nigerians who rely on the fuel primarily for cooking, powering kerosene lamps and other domestic purposes.
On Tuesday, Forte Oil began selling the product, dubbed “Buhari Kerosene,” across its retail outlets in Lagos. The company will extend it to other retail outlets across the country within the next few days.
The Nigerian National Petroleum Corporation, the state-owned petroleum company, usually imports and sells kerosene to fuel marketers at the ex-depot price of N40.90 (20 cents U,S.), whereby the marketers are supposed to sell at the government-recommended price of N50 (24 cents U.S.) at the pumps, but the marketers typically sell at N120 (60 cents) – N140 (70 cents) per liter at the pumps.
Forte Oil is Africa’s largest downstream oil company by market capitalization. The company operates more than 400 gas stations and fuel storage depots and manufactures its own line of engine oils. The company currently has a market capitalization of US$1.5 billion. Femi Otedola has a current net worth of $1.29 billion according to FORBES’ realtime billionaire scoreboard on Wednesday.