It was learnt that the NNPC compelled
marketers to pay a bribe of N25 per litre which was usually described as
mobilisation fee, to petroleum ministry and top NNPC officials before
they could get allocations to lift kerosene.
A source, who asked not to be named but
who is in the oil industry, added that marketers who could pay the NNPC
and petroleum ministry’s top shots N25 on every litre got kerosene
allocations.
The source said, “So many things are
happening and that is why it is almost impossible to sell kerosene to
end users below N170. For any marketer to get allocation, you will pay
N25 per litre and this is aside from other expenses that are incurred to
get the product to the end users.’’
The NNPC has been the sole importer of
kerosene despite a directive by the late President Musa Yar’Adua in
2009, which asked the corporation to discontinue the kerosene subsidy.
Investigation also revealed that many
portfolio marketers, who are cronies of government and top NNPC
officials, among other marketers, were those able to get allocations to
lift kerosene in the last three years.
An analysis of figures obtained from the
official website of the NNPC showing the Pipelines and Product
Marketing Company sales of household kerosene revealed that 2.996
billion litres of the product were sold in 2010.
In 2011, 2.869 billion litres were sold; while in 2012, the corporation sold 3.123 billion litres of the commodity to consumers.
When put together, the NNPC sold 8.988 billion litres of kerosene within a three- year period of 2010 to 2012.
Investigation by one of our
correspondents showed that the NNPC might have spent N988.84bn on
kerosene subsidy between 2010 and 2012.
This is because the corporation currently imports the product at N156.46k per litre and sells to marketers at N40.90k per litre.
With 8.988 billion litres of kerosene
sold in three years, the source said about 7.819 billion litres must
have been lifted by oil marketers who had to pay N25 for every litre of
kerosene allocation they got between 2010 and 2012.
This, he said, was premised on the fact
that marketers control about 87 per cent of retail outlets in the
country, while the NNPC only operates 37 mega stations, 12 floating mega
stations and over 500 affiliate stations.
In view of this, the source said if
marketers had lifted about 7.819 billion litres of kerosene, a whopping
sum of N195.5bn must have been paid as a bribe to NNPC officials before
they could get the kerosene allocations.
He explained that though marketers would
usually get allocations to lift kerosene at N40.90k, “they had to pay
N25 per litre as mobilisation fee to NNPC officials without which they
could not get the allocations.”
He said, “If you add N25 to N40.90k, the
marketers are already paying almost N70 per litre and by the time they
add their operational costs and other expenses to it, it will be
practically impossible for them to sell kerosene at the official retail
price of N50 per litre.
“How can such a marketer sell at N50 per
litre after parting with N25 on every litre and incurring other costs,”
the source asked.
The ex-depot price of kerosene is
N40.90, but the landing cost plus margin, according to the Petroleum
Products Pricing Regulatory Agency is N156.46 per litre.
The pricing template made available on
the PPPRA website put the cost and freight of kerosene at N130.47;
lightering expenses, N4.09; NPA charges, N0.68; financing, N0.64; Jetty
depot charge, N0.80; and storage charge, N3.00.
These, according to the PPPRA, amount to
N140.97 and with another N15.49 distribution margin, the total cost is
N156.46 per litre.
This, the PPPRA stated, included
retailers’ margin of N4.60, transporters’ margin of N2.99, dealers’
margin of N1.75, bridging fund of N5.85, marine transport average of
N0.15 and administrative charges of N0.15.
Although there have been conflicting
figures, the NNPC is said to be paying between N107.46 and N110 as
subsidy on each litre of kerosene sold to consumers in the country.
When contacted, the acting Group General
Manager, Public Affairs, NNPC, Dr. Omar Farouk Ibrahim, said, “You
can’t just make blanket accusations against the NNPC. It helps for you
to tell us in which of our 22 depots this thing is happening. Who are
the officials involved? If you don’t come out with the fact, we will not
know.
“It is unfair for people to be making
wild and unsubstantiated allegations or accusations against the NNPC. If
people have facts to support their allegations, they should present
them to us and we will investigate and take necessary actions.”
He, however, admitted that the NNPC sold
kerosene at N40.90k per litre, but lamented that marketers were selling
it between N120 and N130 per litre to the Nigerian public.
Our correspondents also gathered that
some consumers buy the product at prices ranging between N170 and N250
per litre, depending on their location in the country.
The Director, Centre for Petroleum,
Energy Economics and Law, University of Ibadan and President, Nigerian
Association for Energy Economics, Prof. Adeola Adenikinju, in an
interview with one of our correspondents, said a study done in 2013
showed a huge margin in kerosene prices at filling stations across the
country and the ‘official price’ claimed by the NNPC.
On the average, Adenikinju said the national pump price of kerosene deviated from the official price by about N64.38.
He said, “The deviation was most
significant in Abuja with a margin of over N100 per litre. Three states,
Enugu, Kogi and Cross River, recorded excess margins of N90 per litre.
“Corresponding margin for Bauchi was N85
per litre, Taraba, Lagos and Kano, N80. However, the margins were much
lower in Benue, Kaduna and Ekiti.”
The professor said the analysis of
variations between official price and hawkers’ market price was even
more dramatic, ranging from N30 per litre in Ekiti to N150 per litre in
Bauchi.
He said, “The NNPC cannot claim
ignorance of this sharp practice. Some would even argue that NNPC
contributed significantly to the emergence of this thriving unofficial
market. These unofficial channels are not self-sufficient and they
depend to a very large extent on supply from the official sources.
“Given the revelation from the probe
panel and the evidence on ground, the average Nigerian does not benefit
from the so-called subsidy on kerosene and should therefore be stopped.”
The Group Executive Director, Production
and Exploration, NNPC, Dr. Abiye Membere, noted that it was not the
fault of the NNPC that the product was sold at prices above the N50 pump
price.
He said it was worrisome to see people
retail the product at such exorbitant rates, adding that such a
situation was beyond the NNPC.
The Governor, Central Bank of Nigeria,
Mr. Lamido Sanusi, had said the NNPC sold kerosene at a subsidised rate
of N40 while buying it at N150.
Sanusi said, “The burden of proof on the
NNPC is to show where they obtained authorisation to purchase kerosene
at N150/litre from federation funds and sell at about N40/litre, knowing
well that this product sells in the market at N170-N220/litre. At what
point was the presidential directive revered?”
The Chairman, House Committee on
Petroleum (Downstream), Mr. Dakuku Peterside, had recently said the
government spent N110bn on kerosene subsidy in 2010, N324bn in 2011 and
N200bn in 2012, which came up to N634bn within the three years.
He said, “In the year 2010, we spent
N110,068,533,988 to subsidise kerosene. This is not the cost of kerosene
but the cost of subsidising the product alone. In 2011, it got worse
and the government spent N324,089,961,319 on kerosene subsidy. Although
we have yet to reconcile this, we spent N200bn in subsidising kerosene
in 2012.
“So, in three years, we have spent N634bn subsidising kerosene. This is one-third of what we spend in a year on capital budget.”
He described kerosene subsidy as “a network of corruption” and “a network of fraud.”
However, a human rights lawyer, Wahab
Shittu, said such allegations should be substantiated to assist
anti-corruption agencies in carrying out investigations.
He said, “Every allegation bordering on
corruption and criminality must be expressly proved beyond conjecture,
suspicion, accusation and counter-accusation. There must be proof and I
think that the fight against corruption cannot be won if whistle-blowers
are not prepared to come into the open and provide solid
incontrovertible evidence.
“People must be prepared to make
sacrifices if this fight will be won. So those who want to sanitise this
society must be prepared to make sacrifices. To substantiate the
allegations, they must give names in particular circumstances. They can
even write petitions anonymously and forward to the appropriate agencies
so that they follow up with investigations.”
But another human rights lawyer, Jiti
Ogunye, completely disagreed with Shittu’s assertion, saying that
whistle-blowers do not have to risk their lives to expose corruption.
Ogunye also said that the allegation should not be taken lightly
considering the recent allegations made by the CBN governor about a
missing N20bn.
He said, “These allegations coming from a
whistle-blower following the recent allegation made by the CBN
governor, which has the subject matter of kerosene, is again, very
disturbing.
“We have seen the case of the former
Aviation Minister, Stella Oduah, where a whistle-blower made allegations
before media investigation. Later investigations by the legislature and
the presidency established the truth of the allegation first made by
the whistle-blower. So this allegation should not be dismissed with a
wave of the hand, and, therefore, the anti-corruption agencies cannot
bait the whistle-blowers by asking them to come forward.
“Anonymous information like this is not
allowed for the demonstration of unreasonable courage. If the
allegation is that some people are paying about N195bn to bribe certain
persons in a country where assassination is rife and killings can be
procured with less than N1m, so will it be an act of courage for someone
to come out and say I’m the one that said it. That lie that NNPC and
others can’t do anything unless you name names is despicable and ought
not to be taken seriously. What we expect the anti-corruption agencies
to do is to examine the information and then work on it to unravel it,
after all that’s why they are there; it’s their job.”
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