Diversion of kerosene to neighbouring countries, sharp practices by middlemen and pipeline vandalism are some of the reasons why kerosene is not readily available for domestic consumption, the Nigerian National Petroleum Corporation (NNPC) has said.
Speaking on Tuesday during the two-day investigative public hearing on supply, distribution, expenditure and subsidy on kerosene, Group Managing Director of the Corporation, Engr. Andrew Yakubu lamented that due to a number of issues ranging from incessant pipeline vandalism and diversion of the product to road construction, the product is not readily available.
“There are quite a number of competing demands for kerosene and until these are addressed by other relevant agencies, the issue of kerosene not being readily available for domestic use will continue to reoccur every now and then”, he said.
“The way out is for this committee to collaborate with the NNPC to encourage the sale of liquefied petroleum gas otherwise known as cooking gas”.
He stated that already, NNPC has stepped up the supply of LPG from 65,000 metric tonnes in 2011 to 250,000 metric tonnes in 2013, and that the target is to grow the consumption of the product to 500,000 metric tonnes by the end of 2014.
He argued that the increase in the consumption of cooking gas will go a long way to reduce dependence on kerosene, which will in turn help in the redistribution of kerosene to those who may still want to consume it.
Responding to a question on whether kerosene subsidy is still in place, the NNPC GMD said that was exactly what he met when he assumed office in June 2012 adding that kerosene subsidy is funded by unrealizable revenue flow.
“The NNPC takes crude at international price and sells it at the domestic market at regulated price of N50 per liter,” he said.
Answering another question on what the NNPC is doing to stop kerosene diversion, Yakubu said that the corporation does not have the power to police marketers and sanction them, as there are statutory bodies with the responsibility.
Commenting on the legality of kerosene subsidy, Company Secretary of NNPC, Anthony Madichie cited the Petroleum Act Section 6 subsection 1, saying only the minister of petroleum resources has the authority to fix petroleum product prices, and that if a presidential directive is given and not gazetted, such directive will not be effective.
In his submission to the committee, Managing Director of the Pipelines and Products Marketing Company (PPMC), a subsidiary of the NNPC, Prince Haruna Momoh disclosed that kerosene is sourced for the Nigerian market through importation and domestic refining, adding that Dual Purpose Kerosene is sold to coastal marketers, Major Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and NNPC Retail.
“I can confirm to this committee the statistics for the supply of DPK are as follows: In 2010, NNPC supplied 2,515,582.44 metric tonnes of DPK, in 2011, NNPC 1,922,263.56 metric tonnes, in 2012, NNPC supplied 2,622,843.20 metric tonnes and in 2013, NNPC supplied 2,671,747.97 metric tonnes making a total of 9,732,437.17 metric tonnes,” Prince Momoh revealed.
In his keynote address, Speaker of the House of Representatives, Hon. Aminu Tambuwal, who was represented by Deputy Speaker, Hon. Emeka Ihedioha said the investigative hearing is aimed at finding a lasting solution to kerosene scarcity in the country.
Presiding over the investigative hearing, Chairman of the House of Representatives Committee on Downstream, Hon. Dakuku Peterside said the hearing was not to witch-hunt any agency but to work out modalities to ensure that kerosene is bought at the official pump price by the masses.
