Govt spends N634b on kerosene subsidy in three years

FACTS have emerged that the Federal Government may have spent about N634 billion to subsidise Dual Purpose Kerosene (DPK) in the last three years.

This figure, which was disclosed by the Chairman, House Committee on Petroleum Downstream, Dakuku Adol Peterside, represents one third of the nation’s expenditure on capital projects in a year.

Peterside, who berated the expenditure, at the seminar organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos at the weekend, said the purported subsidy has never benefited the masses, who have been suffering to get the product at regulated price.

Noting that the amount was spent between 2010 and 2012, he broke down the figure to about N110 billion spent in 2010; N324 billion spent in 2011and N200 billion expended in 2012.

According to him, kerosene may continue to scarce due to some critical factors that have eaten deep into the fabrics of the nation, such as non-functional refineries, vandalism of crude pipelines, corruption and the multi-purpose usage of kerosene.

He said kerosene is equally useful for other purposes such as road construction, blending for aviation fuel, cleaning agents, paint industries, anti-oxidant, solvent to adulterated crude oil for fuel, in addition to diversion to neighboring countries and inefficiencies and fraud in the distribution network, among others.

This stiff competition of usage, according to Peterside has necessitated diversion of the product to other uses, because of huge turnover and excess profit taking.

Kerosene is to be sold for N40.90k per liter, but it is presently sold for between N110 and N150 per litre, depending on the location. In fact, the product is relatively scarce at the filling stations, thereby leaving Nigerians to other alternative sources, such as firewood, charcoal, sawdust, electric and gas.

Apparently irked by the situation, Peterside clamoured for switch to Liquefied Petroleum Gas (LPG), which he said is clean energy that reduces environmental cost and degradation.

He, therefore, enjoined government at all levels to promote the usage of LPG as cooking gas, proving that the subsidy spent of kerosene over the years has not helped matters.

He quoted the Nigerian National Petroleum Corporation (NNPC), to have said it supplied about 2.92 billion liters of kerosene to the distribution Nigerian market from September 2012 to August 2013, but the product was not available in the market.

“So something is wrong somewhere, how can we be spending on what does not benefit the masses? We need to think forward and encourage gas usage, while the amount spent on subsidy can be used for some other developmental programmes,” he said.

Peterside, said reliance on kerosene has retarded the expected growth of the country to carbon free economy, compared to other developing countries.

By Salaimon Salau, November 4, 2013