Subsidy not for the poor

At the Ascon Filling station along Ibrahim Babangida Way, a private security personnel attached to the facility told LaNUBlog that kerosene has not been sold at the outlet in the past three years. Pump attendants at the NNPC Mega station located along Aminu Kano Crescent/Kashim Ibrahim Way also said they had not been supplied kerosene for over one year. During the one week our team visited major filling stations in Abuja in search of kerosene, only the NNPC Mega station located at the Central Business District had supply. However, hundreds of plastic cans formed an interminable line inside the facility, with armed soldiers and policemen providing security as though it was a high risk area. Although the product is sold there for N50 per litre, many of those whose containers had formed a long queue at the station complained that only influential persons and members of uniformed organisations get to buy the product. A woman, who gave her name as Hamila, said she waited all morning without being able to buy the product. Another customer, Nkechi Ibe, said security operatives posted to secure the facility were making brisk business out of the opportunity. “They allow their people (police and military) to buy without joining the queue. I have been waiting here since morning but have not been able to fill my 10-litre jerry can,” Mrs. Ibe said. Around the station’s perimeter fence, kerosene merchants heaped hundreds of jerry cans and waited in flashy cars for night fall when LaNUBlog learnt the product is sold out above the regulated rate. Same in Lagos and elsewhere. An earlier research by Financial Derivatives Company Limited, a financial services institution, showed the situation was no different in Lagos between January 2012 and December 2013. While the officially-subsidised rate for kerosene remained N50, the report indicated that in January, 2012, the product sold in Lagos at a whooping N300, about 500 per cent higher than the regulated price. However, in February of the same year, the price came down to N250 per litre, which is 400 per cent higher than the regulated price. In March, the price of the product still remained at N250 per litre but respite came in April when Lagosians paid N163 per litre which is 225 per cent higher than the regulated cost. By May and June of the same year, the price went up slightly to N175 per litre, representing 250 percent gap on the official price. It went further down in July to N150 per litre representing 200 percent gap on the official price and dipped further to N140 in August, with 180 per cent cost above the official price. In September, the price went up to N150 per litre, representing 200 per cent increase from the official rate and N163 per litre in October, 225 percent higher than the regulated rate. By November, the cost of kerosene again rose to N175 per litre, representing 250 percent off the official rate and went down slightly to N169 in December, representing 238 percent higher than the government rate. However, in 2013, the document showed that kerosene sold at N163 per litre in January at the nation’s “Centre of Excellence,” representing 225 per cent hike on the official rate. But by February, it dipped to N150 per litre, 200 percent higher than the regulated price and again rose to N163 per litre in March. By April and May, the product sold at N175 and N188 per litre, representing 250 per cent and 275 per cent, respectively. In June and July, the price of kerosene steadied at N175 per litre, representing 250 per cent increase on the official rate, and further went down to N133 in August and N125 in September, representing 165 per cent and 150 per cent higher than the official rate, respectively. The price went up to N150 per litre in October, representing a 200 per cent hike on the official rate and N200 in November, 300 per cent higher. In December, the product hit an all-time high in the year, selling at N255, representing 350 per cent above the subsidised rate. NNPC’s blame game Officially, NNPC’s explanation for the scandal as presented during the House of Representatives hearing, continues to be that kerosene is diverted by marketers, who are well beyond the corporation’s control. Before the lawmakers, the Group Managing Director of the NNPC, Andrew Yakubu, claimed there were massive diversion of the product to neighbouring countries. He also blamed the situation on the large scale industrial use of kerosene, the use of the product as aviation fuel, sharp practices by middlemen and pipeline vandalism. “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.