The Group Managing Director of NNPC, Mr Andrew Yakubu, said this at the Investigative Public Hearing on Supply, Distribution, Expenditure and Subsidy on Kerosene at the National Assembly on Tuesday.
He added that the use of the product for road construction was another reason for its scarcity.
He stressed that the product was constantly being diverted to neighbouring countries for industrial use, as aviation fuel and sharp practises by middlemen
He added that until a number of competing demands for kerosene were addressed, its scarcity would continue to recur every now and then.
“The way out is for this committee to collaborate with the NNPC to encourage the sale of liquefied petroleum gas otherwise known as cooking gas.
“The NNPC has stepped up the supply of LPG from 65,000 metric tonnes in 2011 to 250,000 metric tonnes in 2013’’, he said.
Yakubu said the target was to increase the consumption of the product to 500,000 metric tonnes by the end of 2014.
He contended that the increase in the consumption of cooking gas would go a long way to reduce the dependence on kerosene
He said that this would in turn help in the redistribution of kerosene to those who might still want to consume it.
He said kerosene subsidy was funded by unrealisable revenue flow.
“The NNPC takes crude at international price and sells it at the domestic market at regulated price of N50 per litre.”
On the legality of kerosene subsidy, he said that only the Minister of Petroleum Resources had the authority to fix petroleum product prices.
He emphasised that if a presidential directive was given and not on gazette, such directive would not be effective.
Mr Haruna Momoh, the Managing Director of the Pipelines and Products Marketing Company (PPMC), said kerosene was sourced for the Nigerian market through importation and domestic refining
“The Dual Purpose Kerosene is sold to coastal marketers, Major Marketers Association of Nigeria, (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and NNPC Retail.
“I can confirm to this committee that the statistics for the supply of DPK is as follows; in 2010, NNPC supplied 2.51million metric tonnes of DPK.
“In 2011, NNPC supplied1.92 million metric tons, in 2012 NNPC supplied 2.62million metric tons and in 2013, NNPC supplied 2.671million metric tons, making a total of 9.73 million metric tonnes’’, Momoh said.
In a keynote address, the Speaker of the House of Representatives, alhaji Aminu Tambuwal, said the investigative hearing was aimed at finding a lasting solution to kerosene scarcity in the country.
The speaker was represented by the Deputy Speaker, Mr Emeka Ihedioha.
The Chairman of the House Committee on Downstream, Dakuku Peterside, said the hearing was not to witch hunt any agency.
He said it was to work out modalities to ensure that kerosene was bought at the official pump price by the masses.