THE BIG KEROSENE FRAUD: Depot Owners Buy At N41, Sell @ N125

Nigerians have been forced to pay as much as N150/litre of kerosene instead of the government subsidised rate of N50 because the Nigerian National Petroleum Corporation, NNPC, chose to sell kerosene to depot owners rather than retail outlet owners as required of it.

A Report by the Technical Committee on Payment of Fuel Subsidies, submitted to Mr President and exclusively obtained by Vanguard, revealed that the NNPC flouted the policy on its monopoly to import kerosene, which comes in as Dual Purpose Kerosene, DPK, at subsidized rate to serve the masses.

Rather than deliver the product to retail outlet owners so that it could benefit the masses for which it was being subsidized, the NNPC, instead, chose to sell it for patronage, or what the committee described as “rent” to depot owners.

The depot owners who got the product at N40.90/L ex-depot price, in turn sold it to marketers and retail owners at between N115 and N125/L depending on the operator, a development that led to the masses buying the product at 300 per cent increase at N150/L instead of the recommended price of N50/L.

“The distribution of DPK which was being imported solely by NNPC was skewed in favour of depot owners who have no retail outlets. Two-thirds of the kerosene sold by NNPC between 2009 and 2011 was sold to depot owners and “middle men” who in turn sold the product to owners of retail outlets at inflated prices of between N115.00 and N125.00 per litre (compared to the ex depot price of N40.90), leaving consumers to pay higher prices than the N50.00 per litre directed by Government,” the report said.

It added: “For several years now, the country has been incurring huge subsidy bills for kerosene and its citizens are not receiving the benefit – instead the country has been financing “rent” for the middlemen.”

NNPC has many mega stations and retail outlets

MOMAN – is the Major Marketers Association of Nigeria, which members include Mobil Oil Nigeria Plc; Total Plc; MRS Oil Plc (formerly Chenron Oil Nigeria); Forte Oil Plc (Formerly AP); Oando Oil Plc; and Conoil Plc. The association controls nine per cent of retail outlets with 2,453 owned by members.

Culled from VANGUARD.

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