While officials, marketers steal N700M kerosene subsidy daily, suffering Nigerians pay triple for product

From her rundown single room in Jikwoyi, a suburb of Abuja where she lives with her husband and a child, Ruth Joseph walks across her busy street every other day to buy kerosene. For a litre, she pays N150, and occasionally N120 if she manages a walk to a filling station.
For the years Ms. Joseph and millions of Nigerians in Abuja and elsewhere have paid that much for kerosene, dubious government officials and fuel marketers have ripped off billions of naira of government subsidy meant to keep the price at N50. The “unknown” officials and marketers rake in as much as N700 million daily, according to lawmakers.
Separate investigations by the Senate and the House of Representatives have yielded no clue about exactly those responsible, as the reports of the probes are still being expected.
But the petroleum ministry and the Nigerian National Petroleum Corporation, NNPC, have stuck to the government’s position that despite retaining the subsidy in violation of a presidential directive in 2009, its huge cost of more than $8.64 billion- and still counting- was, and is still, meant for Nigerians to have kerosene at N50.
“Why is an importer who supposedly bought from NNPC at N50 selling at N120?  Surely it is not because he wants to make N70 profit; it must be that the product is not getting to him at N50,” Bukola Saraki, a serving senator and former governor of Kwara State, suggested recently.
A week of market assessment by a PREMIUM TIMES crew shows that while the government continues to pay the enormous sum daily as subsidy for kerosene, the funds entirely end in private pockets as no where across the country is kerosene selling at N50 a litre, not even in Abuja, the federal capital.
In Abuja, and other parts of Nigeria, the product sells at a minimum of N150 and occasionally rockets to N200 to N300, more than five times the approved rate.
“It is so bad that the product is subsidised but people are still selling it above the approved rate. Those selling kerosene make so much profit at the expense of the people,” said Mrs. Joseph. For her family of three, a litre of kerosene lasts two days, meaning she spends at least N300 in four days on cooking fuel.
Godspower Ogbonna, a resident of Karu, also a satellite town in Abuja, also pays the same rate for kerosene. “The level of insincerity in the country is so high,” he said of the government’s payment of subsidy that is never useful to the people.
Another resident, who gave her name simply as Mrs. Alfred, said she buys kerosene between N170-N180 per litre from retailers as it was difficult to get the product at filling stations.
Another resident of Karu, Pastor Stephen, said what obtains now as subsidy for kerosene is typical of the shady deals by a few people that have brought hardship to the majority.
“We are talking about kerosene that is supposed to be sold at N50 per litre. The only place where kerosene is sold at N50 per litre is at the mega filling station but it is rare to even see it there. If the mega stations are selling the product at N50 per litre, what stops other filling stations from selling at the same rate,” he queried.
Subsidy not for the poor
Kerosene is not only beyond the reach of the poor, it is also very scarce. In Abuja where the NNPC has its corporate headquarters, the product is still hard to come by. About 95 percent of the filling stations in the capital city claim the NNPC and its relevant subsidiaries are not supplying the product to them.
At Austoma Filling station located at Banex Junction by Aminu Kano Crescent, an attendant told PREMIUM TIMES reporters the station’s kerosene pump is now used for dispensing diesel. “We have not been supplied with kerosene for over a year,” the attendant, who would not give his name, said.
At the Oando filling station located at the beginning of the 1st Avenue (Abdulwahab Folawiyo Avenue), a pump attendant said the stock just finished two days earlier but confirmed that the product sells for N110 per litre.  The NNPC mega filling station along the same road hardly get supplies. An attendant confirmed that the outlet has not received supplies for a long time but said the product is sold for N50 per litre anytime  it is available.
At the Conoil Filling station in Kado Estate, an attendant told our team that kerosene has not been supplied to the station for over one year. “Look at the kerosene pump there,” the attendant said, pointing at the empty pumps. “It has not been used for close to two years. We have not been given an allocation by the NNPC.”
An attendant at the Total Filling station along Sultan Abubakar Way, Wuse 11, said his station stopped selling kerosene for a long time but would not say why the decision was taken.
At the Ascon Filling station along Ibrahim Babangida Way, a private security personnel attached to the facility told PREMIUM TIMES 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 PREMIUM TIMES 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.

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