Nigerian govt re-launches failed scheme to enforce N50 kerosene price

Nigerians queuing for kerosene

In spite the failure, three years ago, of the Kero Direct initiative, a policy which sought to deliver kerosene at the regulated price of N50 to consumers, the federal government on Sunday re-launched a similar scheme.

The new plan, Kero Correct’ Initiative, KCI, is also designed to bring down the retail price of household kerosene, HHK, in homes nationwide, the Executive Director, Commercial, Pipeline and Products Marketing Company, PPMC, Frank Amego, said.

Under the new scheme, kerosene, one of the most commonly used fuels in Nigerian homes, would be sold to consumers at the regulated price of N50 per litre.

But, petroleum industry analysts say the so-called new initiative bear a close semblance to the controversial “Kero Direct” scheme introduced in July 2011, and may not also succeed.

The “Kero Direct” initiative, which was meant to supply kerosene to Nigerian homes directly at government regulated price of N50 per litre, only succeeded in making multi-billionaires out of close allies of the Presidency and Petroleum Resources Ministry involved in the scheme.

At the peak of the kerosene scarcity in the country, the Minister of Petroleum Resources, Diezani Alison-Madueke, had announced the launching of the initiative.

Under the scheme, the Ministry of Petroleum Resources, with the assistance of the Nigerian National Petroleum Corporation, NNPC Retail Limited, was to work with Capital Oil & Gas Limited, an indigenous petroleum products marketing company, to distribute kerosene to Nigerians at N50 per litre.

While the PPMC provided the product, Capital Oil & Gas was expected to use its dispensing trucks to deliver the product to end users directly across the country.

However, throughout the brief period the programme lasted, consumers hardly bought kerosene at designated filling stations at less than N120, sometimes as high as N250 per litre, as the programme was hijacked by a cabal in the oil industry.

Only soldiers and other uniformed organizations and privileged persons connected to top NNPC officials, were allowed to buy kerosene at N50 per litre.

Others who were perpetually on long queues were only able to buy the products resold mainly by members of the security agencies at exorbitant prices.

As the programme ended without success, Ifeanyi Ubah, whose company, Capital Oil & Gas Limited, facilitated the kero direct scheme not only emerged one of Nigeria’s richest, but also one of the biggest beneficiaries of the controversial oil subsidy payments by the federal government.

The new “Kero Correct” initiative, Mr. Amego said, has its main objective, to “cut off the several layers of middle men, who make it difficult for the end users to enjoy the subsidy on the product.”

“The ‘Kero Correct’ initiative is aimed at getting kerosene to the Nigerian masses who use the product as their domestic cooking fuel at the correct price,” he said.

The introduction of ‘Kero correct’ initiative was announced at a one-day workshop by NNPC for some grass-roots non-governmental organizations, NGOs and volunteers engaged to monitor the distribution and sales of kerosene at the corporation’s mega and affiliate stations nationwide.

Mr. Amego said though kerosene was the most subsidized fuel product, the Nigerian masses have always been denied the benefit of the subsidy due to the illegal activities middlemen, who connive with corrupt officials to abuse the process.

The officials, he explained, connive with distribution and retail agents to divert product allocations to marketers in the construction industry, where Kerosene is used for blending of bitumen for roads construction.

“The ‘Kero Correct’ initiative is thus designed to distribute and sell kerosene directly to end users from NNPC Retail mega and affiliate stations across the country at the government-regulated price of N50 per litre to ensure effective control,” Mr. Amego said.

The PPMC, he said, has sufficient stock of kerosene as well as the necessary facility to ensure efficient distribution of the product from Lagos and Oghara in Delta state to NNPC retail mega and affiliate stations across the country.

The General Manager, NNPC Retail, Ufford Ibanga, also assured that all the 524 NNPC retail mega, floating mega and affiliate stations across the country would be involved in the Kero Correct scheme.

He said the volunteers were brought into the project to help monitor discharges and sales of the product to serve as an independent feedback system to promote transparency and ensure that the product got to the desired end users.

The Chairman of the Kero Correct Committee and Manager Media, Group Public Affairs Division, Nwakwu Anthony, said the NGOs and volunteers would help monitor the discharge and sales of the product, ensuring orderliness at points of sales as well as serve as whistle blowers.

When the scheme takes off, Mr. Anthony said a total of about 1,500 trucks of kerosene would distributed across NNPC retail’s mega and affiliate stations across the country over the next three months.

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