​NNPC Lingering Kerosene/Cooking Gas Scarcity: Some Serious Matters Of Concern By Ifeanyi Izeze

Politics aside, when the Holy Bible said that “Wisdom is profitable to direct,” it seems from all indications that the present administration was not part of those being admonished as it has stubbornly continued to reject “Wisdom as the principal thing,” in managing the affairs (all) of this country.
The government has looked the other way for almost two years running while the issue of unavailability and the senselessly high cost of kerosene, a commodity that is mainly used by the bulk of deprived Nigerians citizenry, has remained unresolved despite the hundreds of billions of Naira our government is said to be secretly paying as subsidy for the product. How can a government that is supposed to be “of the people by the people and for the people” display such callous aloofness to the sufferings of the masses that, against all odds, stood out to install what they believed would be a change of attitude in the governance of their affairs?

Is the government pretending not to be aware that its policy of supposed forex liberalization is a big impediment to oil marketers, more especially the independents? The current policy thrives on bidding for the available forex and the highest bidder gets whatever is available for sale. It is a well known fact that most times the bid gets to as high as N420 or more to $1.

Industry players in the mid and downstream sectors of the nation’s oil industry have for almost two years continued to cry out that the “funny” foreign exchange policy arrangement and other harsh policies of the present administration are killing business and pointedly frustrating efforts to bring down prices of essential commodities and services.

How many independent marketers can afford to keep up with this exchange rate? Moreover, foreign banks have cancelled all credit lines issued to marketers because of unpaid debts owed them as a result of unexplainable jack-ups in the nation’s foreign exchange rates. Of course how do you expect them to pay back the debts owe banks when the monies were borrowed under a N200 to one dollar forex regime and now the dollar exchanges for N400 or more? And to worsen the matter, most of these marketers are also heavily owed by the government in the subsidy scheme or rather scam.

The question is: why has it become so hard for the Central Bank of Nigeria (CBN) to take a second look at its forex policy that has strangulated almost every aspect of the socio-economic life of this nation? Are our laws/policies made for the betterment of the citizens of this country or to punish them? What kind of a country is this?

Before now, the Independent Petroleum Marketers have largely relied on the Nigeria National Petroleum Corporation (NNPC) for their supplies of kerosene. But all that changed when the NNPC found a more lucrative channel of disposing its imported kerosene.

Severally it has been said that no matter what the administrators of the Nigerian National Petroleum Corporation (NNPC) may coerce us to believe, the nation’s apex oil concern is full of glaring aberrations some systemic, most deliberately dubious. It would be recalled that both the Association of Petroleum Products Marketers and Major Oil Marketers Association of Nigeria sometime ago alleged that the NNPC is the source of the sharp practices in kerosene marketing and consequent high cost of the product.

According to the marketers associations, “The sharp practice is attractive, because while NNPC which was supposed to sell kerosene at the subsidised price of N50 per litre, now sells DPK as aviation fuel at anything from N250-N350 per litre to airline operators.

The tragedy of the NNPC fraud is that because aviation fuel, Jet A1, has been very scarce and airline operators have resorted to the use of DPK as substitute, the NNPC and its importers now found it more profitable to sell the subsidised kerosene (DPK) to the airline operators that buy at more than triple the official government-pegged pump price for kerosene.

Statistics from the PPPRA show that the landing cost of DPK is N108.06, local distribution takes another N13.20 per litre, bringing the ex-depot price to N121.26 per litre against the federal government’s official pump price of N50 per litre, showing a subsidy of N71.26 on every litre. So selling to the airlines at N250 per litre, the NNPC makes extra N200 on every litre, thus bringing its rake-in to over N271 on every litre of kerosene brought into this country. Good business, is it not? But the question is: at whose expense?

NNPC has been claiming that Warri Refinery currently turns out two million litres of kerosene daily, while Port Harcourt produces three million litres of kerosene on a daily basis. Is this true? Even people on the streets know that these name plate refineries cannot churn out such volumes on daily basis even running on 50 percent installed capacity. As for Kaduna refinery, nothing comes from it except what it receives from the PPMC’s Mosimi depot in Lagos. So why

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