Monday 9 December 2013

Why Nigerians still buy kerosene above N50 per litre

                                            
Kerosene consumers in the country have continued to groan over its short supply.

 Recently, the Nigerian National Petroleum Corporation (NNPC) partnered the Independent Petroleum Marketers Association of Nigeria (IPMAN) to ensure adequate supply of the product.

The partnership led to the selling of kerosene at N50 per litre across the country by IPMAN members through the IPMAN-Kero-Direct scheme.

Investigations have however, revealed that soon after the IPMAN-Kero-Direct scheme is launched in any state by the leadership of IPMAN, the price of kerosene will jump to the old price of between N130-N150 per litre.

Most of the filling stations where the scheme was launched, when visited by the Nigerian Tribune, were either out of supply or selling at the old price.

At MAO filling station along Iyana-Iba road, kerosene was selling at N130 per litre after being sold at N50 per litre when the scheme was newly launched.

It was the same story at NIMSTAR, Petrostar and other petrol stations scattered across Lagos State.

Though NNPC mega stations are mandated to sell at N50 per litre, but when visited, most of them were out of stock except Ikoyi mega station, Osogbo mega station and Abuja mega station.

A source within the NNPC, who pleaded anonymity, said that “the Kero-Direct scheme was a gimmick by politicians and the marketers to defraud the masses. These people make a minimun of N2million on a 33,000-litre truck of kerosene.

“The best thing is to remove subsidy officially on kerosene because when removed, DPK will be sold officially between N120-N140 per litre which is the same as the rate Nigerians are buying it presently.”

He explained that politicians get allocation from the Petroleum Product Pricing Regulatory Agency (PPPRA) to lift kerosene from the depot at N40.90 and the allocation is immediately sold to marketers who are either members of IPMAN or any marketer who is ready to play along.

“The politicians sell at between N98-N102 per litre to marketers that are ready to buy. The marketers pay all the necessary depot charges and tariffs. This has led to the current price of kerosene at between N120-N140 per litre depending on the location,” he stated.

Furthermore, he stated that major consumers of kerosene like construction companies and stakeholders in the aviation sector get kerosene in large quantities from the marketers who divert kerosene meant for domestic use to commercial use.

Most filling stations that belong to IPMAN across the country are not functioning, yet they receive allocations. They are known for sharp practices like hoarding and pump-adjustment.

When contacted, the National President of IPMAN, Alhaji Abdulkadir Aminu, admitted that some of his members engage in sharp practices. According to him, “there is no perfect organization anywhere in the world, we will continue to improve on our services to the masses.

“We partnered with the NNPC on distribution of kerosene to Nigerians but the major consumers like some construction firms and others who are major consumers of kerosene go to the same market to buy kerosene like every other Nigerians with 5-litre gallons.

“There is need to review the national consumption pattern for DPK because this has not been done since 2003 unlike the petrol and diesel which are being reviewed on an annual basis.”

Aminu further stated that “for the past 15 years, none of the major marketers have constructed new filling stations in Nigeria except Conoil Plc. “

The NNPC is the sole importer of kerosene in Nigeria. While daily consumption is put at 12 million litres per day, the landing cost is N152.20 per litre, according to PPPRA. This means that N102.20 is paid as subsidy on every litre of kerosene consumed by Nigerians, yet it is not available at the recommended price of N50 per litre.

The NNPC has not been able to account for N628billion subsidy payment for kerosene in 2012.

The product is the predominant source of cooking for Nigerian masses.

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