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NNPC Explains Why Kerosene Is Sold Beyond Official Price

Source: thewillnigeria.com

Implores Consumers to Switch to Cooking Gas Reassures adequate Supply of PMS in Lagos, Environs SAN FRANCISCO, February 18, (THEWILL) - The Management of the Nigerian National Petroleum Corporation, NNPC, has said that diversion of kerosene to neighbouring countries, industrial use, aviation fuel, sharp practices by middlemen and pipeline vandalism are reasons why kerosene is not readily available for domestic consumption.

Group Managing Director of the Corporation Engr.
Andrew Yakubu made this disclosure Tuesday during the two-day investigative public hearing on supply, distribution, expenditure and subsidy on kerosene.

Engr.
Yakubu maintained that due to a number of issues ranging from incessant pipeline vandalism and diversion of the product to road construction, the product which is meant for the masses 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.

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,' Engr.

Yakubu quipped.
He informed that already the NNPC has stepped up the supply of LPG from 65,000 metric tonnes in 2011 to 250,000 metric tonnes in 2013 stressing that the target is to grow the consumption of the product to 500,000 metric tonnes by the end of 2014.

The NNPC helmsman stated that the increase in the consumption of cooking gas will go a long way to reduce the 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 stated.

Answering a question on what the NNPC is doing to stop kerosene diversion, the NNPC helmsman said that the Corporation does not have the power to police marketers and sanction them adding that there are statutory bodies with the responsibility.

Commenting on the legality of kerosene subsidy, the NNPC Company Secretary, Anthony Madichie citing Petroleum Act section 6 subsection 1 said only the Minister of Petroleum Resources has the authority to fix petroleum product prices stressing that if a presidential directive is given and not gazetted, such directive will not be effective.

In his submission to the committee, the Managing Director of the Pipelines and Products Marketing Company, PPMC, a subsidiary of the NNPC, Prince Haruna Momoh informed 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 is 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, the Speaker of the House of Representatives, Hon.

Aminu Tambuwal represented by the 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, the 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.