NNPC explains why kerosene is not sold at official price

The Group Managing Director of  NNPC, Mr Andrew Yakubu, on Tuesday in Abuja said that kerosene was not sold at the official price of N50 per litre because of diversion of the product by some marketers. The other reasons for the high price of kerosene, according to him, include sharp practices by middlemen, usage for road construction and aviation fuel, among others. Yakubu said this at an investigative hearing on the supply, subsidy and distribution of kerosene in the country.

The hearing was organised by the House of Representatives on Petroleum (Downstream).

He said that this trend could be checked through adequate monitoring of the country’s border to ensure that the product was not smuggled. Yakubu also said that the diversion of the product would be curtailed if the production and supply of Liquified Petroleum Gas (LPG) was improved.

He said that the corporation was making efforts to make pipelines across the country functional to check the continued diversion of kerosene. On kerosene subsidy, Yakubu said that though there was a directive to stop subsidy on the product it was not followed to conclusion. He said he needed time to avail the committee accurate volume of kerosene imported between 2010 and 2013 as well as budget for subsidy.

The NNPC boss explained that the corporation became the sole importer and supplier of kerosene when marketers withdrew because of the uncertainty over subsidy in 2011.

He stressed that the National Assembly through its resolution directed the restoration of subsidy on kerosene. In his presentation, the Managing Director of Pipelines Product Marketing Company (PPMC), Mr Haruna Momoh, said that daily supply of kerosene was increased from nine million litres to 11 million litres in 2011.

Momoh, who corroborated Yakubu’s arguments, said that the company had revived the depots in Kano, Sulieja, Jos, Benin and Aba, to check diversion of kerosene.

In a remark, the Chairman of the committee, Rep. Dakuku Peterside (APC-Rivers), said the hearing was not aimed at witch hunting any Organisation or person.

According to him, it is to encourage adherence to extant laws and transparency in the operations of the agencies saddled with the responsibilities to regulate the sector.

In June 2009, a presidential directive was issued to stop subsidy on kerosene but was not gazetted for implementation.