Testifying at the House of Representatives plenary hearing on the product scarcity on Thursday, Mrs Allison-Madueke affirmed a member’s poser that by deduction, huge government subsidy on kerosene have ended up benefitting users in other countries.
Jonah Enoh, a former chairman of the House committee on finance, had asked the minister if the explanation that trans-border diversions of fuel products account for acute kerosene shortage implied that Nigeria paid for the cost of the product elsewhere. “By implication, yes,” Mrs Alison-Madueke answered. “Obviously, if our kerosene is going outside and our retailers are taking them there, then those countries are getting them at a cost cheaper than the actual cost.”
The total quantity of products shipped outside the country and their worth is not yet clear. But the minister said although the daily kerosene need of the country is estimated at eight million litres, 11 million litres is provided to the market.
Much of that are “hoarded, diverted and illegally moved” into other countries, sustaining a shortage that has remained for months, the minister said.
But the minister’s diversion claim was faulted by the marketers. Musa Felande, the national president of the Independent Petroleum Marketers Association of Nigerian, who also briefed the lawmakers, said if there were diversions, these would be insignificant to affect circulation.
“Marketers are cash and carry people, to the extent that if they get their money, they will give over the product and get the money. They don’t need to take the products outside the country,” Mr Felande said.
He added that the daily product needs have been underestimated, and should be upgraded.
Mrs Alison-Madueke, however, also blamed suppliers of aviation fuel for the scarcity, saying, “unscrupulous marketers” purchased much of the kerosene meant for cooking to sell them to airlines at a higher price.
Her remarks represented the frustration the administration has faced in containing the shortage that has outlasted market predictions and has lifted the kerosene cost by more nearly 200%. Despite earlier government assurances that the scarcity of the cooking fuel will be addressed shortly, kerosene presently sells at more than N200 a litre in some cities in Nigeria. But, as at last week, it was sold for N120 per litre in Owerri, Imo state while it is N130 per litre in Uyo, Akwa Ibom state.
New government measures to address the scarcity include “flooding” the market with the product, and deploying 80 kerosene dispensing trucks for direct delivery to the hinterlands. The supplies are to be stabilised within two weeks, Mrs Alison-Madueke said.
The House summons to the minister yesterday came after the Senate posed similar concern about kerosene to the minsiter last week at her screening for office. She appeared before the Reps with officials of the Nigeria National Petroleum Corporation (NNPC).
For hours, she answered questions from the lawmakers, ranging from demands for detailed performance of the national refineries, to calls for a “revolutionary change” to the operations of the NNPC.
“Can we know the total of how much we have spent on Turnaround Maintenance (TAM) of our refineries since the return of democracy?” Mr Enoh (Cross River State, PDP) asked.
The question received no detailed response, but the minister said the nation’s three refineries now perform at 60% capacity utilisation, up from the 30% the Goodluck Jonathan administration said it met in 2010.
While the upgrade continues, she said three new refineries are expected to be sited in Lagos, Bayelsa and Kogi States. Thirty two per cent of the current fuel needs are met by products supplied by the local refineries.
Nigerians, what is now your stand? Won't you rather support the government of Dr. G. J. ? Won't you start producing something and stop smuggling?
All i want to say is that we still change for better!
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