Oil marketers’ diversion of Kerosene for aviation fuel: Case of robbing Peter to pay Paul 
Kerosene has been scarce not because the product is not available but the fact that greed that has permeate the various fabrics of the nation’s society. The issue is simply that of corruption. From the statistics available to BusinessDay, an average of 5.8million litres of kerosene is pumped into the market from the depots of the Pipeline and Products Marketing Company across the country on a daily basis even though this is not enough to wet the market which requires, at least, 8million litres. The marketers have not imported Aviation Turbine Kerosene for sometime because of the price of crude, of which Dual Purpose Kerosene as a bye product, has been high. So, what marketers are doing is that the product they got from NNPC is being converted to Aviation Turbine Kerosene which is sold to the aviation industry at N160 per litre. House Hold Kerosene (HHK) can easily be converted to ATK when it is further treated and made lighter for the airplane to use.
An industry source, said: “The marketers sell at N160 per litre yet they don’t supply enough. About N100 is realised on a litre sold to the aviation sector.” The marketers claim that high cost of importation is not helping matters. The ugly situation is hampering flight schedules as airlines have been facing the problem of adjusting schedules and in some cases flights are cancelled outright due to fuel shortages. Moreover, air fare now is about N26, 000 per person. The Nigerian Civil Aviation Authority (NCAA) has insisted that there is the need for urgent dialogue and solution, adding that the airlines do not make “huge profit.” Harold Demuren, director general of NCCA, has stated that the price of Aviation Turbine Kerosene in Nigeria is the highest all over the world.
Incidentally, some of the oil marketers were given excuses when asked to comment on the allegation that they were given allocation but they converted it to ATK. For instance, one of the companies that has consistently told BusinessDay that it cannot engage in importation of Kerosene because it is not economically viable as a result of its fixed price of N50 per litre, claimed that his company was given one million litres in December by PPMC. But the PPMC sources said it is one of those companies that have been receiving the product since the beginning of the year. The company, however, could not give any convincing argument about what it has done with the products allocated to it. The company belongs to the major marketers.
On the other hand, when independent and depots owners were confronted with the same allegation of profiteering, they said they did not have the facilities to supply aviation fuel and pointed fingers at major oil marketers. But further investigations revealed that some of them when they get the product from NNPC/PPMC refuse to push the same to retail outlets for consumers to buy, rather they hold on to it for a while and then resell it to some of the major marketers that would convert it to ATK.
The Depot and Petroleum Products Marketers Association (DAPPMA) has decided to embark on pre-emptive move by warning that there would be severe consequences should the Nigerian National Petroleum Corporation (NNPC) decide to reverse the kerosene allocation guidelines that would put them at a disadvantage when compared to the major oil marketers, saying that the arrangement would further exacerbate kerosene scarcity. Their action was based on the information that NNPC had said it was going to review its relationship with some of the marketers that were supplied product but sold to consumers at exorbitant prices. The price of the commodity ranges between N150 and N200 per litre depending on the location in the country. The marketers get the product from NNPC at a little above N40 .90kobo and are expected to sell to consumers at N50 a litre, but this is not so as they are alleged to have been diverting the commodity.
The association (DAPPMA, along with Jetty and Tanks Farm Owners of Nigeria (JEPTFON), has also expressed doubts about the 40 days sufficiency the NNPC has announced, because, the volume could be on the high seas but would only be meaningful if it gets to the appropriate channels of distribution through which it would get to the consuming public. “Not 40 days sufficiency in the high seas, until it goes through the system and this system has to be the infrastructure that is on the ground. We do know the distribution of this product is through licensed retailers, surface tanks, then to jerry can, then to bottles before it gets to the true consumers. So you can have 40 days on the high seas until you use the channels that allow this 40 days sufficiency to get to the true consumers it may not be realistic,” the group said.
DAPPMA, in conjunction with Jetty and Tank Farm Owners of Nigeria, after several hours of deliberation at the weekend issued a communiqué which was read out by Slyvarius Okoli, chairman of the association. The marketers in the communiqué claimed that the guideline was drawn up without their input and that it was the outcome of a meeting between the NNPC and Major Oil Marketers Association of Nigeria (MOMAN) and that it was made to give undue advantage to MOMAN. They said the arrangement would further exacerbate the scarcity of Dual Purpose Kerosene (DPK) nationwide.
“Any attempt to restrict distribution of DPK to MOMAN members only will be a disaster because other excluded stakeholders control about 80 percent of infrastructure of efficient reception, storage and distribution of petroleum products. We therefore, reject these new guidelines and request that the group general manager of NNPC should immediately convene a meeting of all stakeholders to stipulate guidelines that will genuinely address the problems of supply and distribution of DPK across the nation and in the interest of the common man,” the communiqué stated.
According to Okoli, the NNPC management has no reason to think that DAPPMA members are not disciplined as they have invested on the state-of-the-art infrastructure. “I do not see how anybody can see our group as not being disciplined.”
But Levi Ajuonuma, NNPC spokesperson, assured that the 40days sufficiency is real as he conducted journalists round the vessel that brought in 30,000metric tons of kerosene to be distributed to marketers at the Apapa port.
Hope of an accelerated end to the artificially-induced scarcity and hike in the price of House Hold Kerosene(HHK) appeared on the horizon as the management of NNPC and members of the Major Oil Marketers Association of Nigeria, MOMAN pledged to bring the situation to an end.
After a protracted closed-door meeting with Major Oil Marketers in Abuja, Austen Oniwon, group managing director of the Nigerian National Petroleum Corporation (NNPC), announced that concrete measures are in place to end the scarcity.
He stated that all the principle stakeholders have undertaken to ensure that kerosene is available in major marketers-controlled filing stations (Oando, Mobil, Conoil, Total, AP and MRS) nationwide today as well as in all NNPC Retail stations.
