Nigerian National Petroleum Corporation (NNPC) made a shocking disclosure that it was incurring an under recovery of N774 million daily based on the questionable increase of Nigeria’s fuel consumption to 50 million litres per day.
Under recovery, a situation whereby the NNPC is incurring the cost of the differential between the official pump price of Premium Motor Spirit (PMS) commonly known as petrol or fuel and the actual cost of the commodity is another term for subsidy. According to the Group Managing Director (GMD) of the corporation, Dr. Maikanti Baru, the official price is lower than the actual market price.
Baru made his position known when he led top management team of the corporation on a visit to Comptroller-General of Nigeria Customs Service, Colonel Hameed Ali (Retd), and blamed the increase in fuel consumption on massive smuggling of petroleum products to neighbouring countries. He insisted that the activities of the smugglers had led to recent abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 million litres per day, which was in sharp contrast to established national consumption pattern.
The NNPC helmsman observed that there are proliferation of fuel stations in communities with international land and coastal borders across the country, insisting that the development had energized unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitize the fuel supply and distribution matrix of Nigeria. He revealed that detailed study conducted by the NNPC indicated strong correlation between the presence of the frontier stations and the activities of fuel smuggling syndicates.
Providing a detailed presentation of the findings, the NNPC boss noted that 16 states, having among them 61 local government areas with border communities, account for 2,201 registered fuel stations. He noted that fuel tank of petrol stations had a combined capacity of 144.998 million litres of petrol, about four times more than Nigeria’s average fuel consumption of 35 million litres daily.
Baru explained that because of the obvious differential in petrol price between Nigeria and other neighbouring countries, it had become lucrative for the smugglers to use the frontier stations as a veritable conduit for the smuggling of products across the border. According to him, this had resulted in a thriving market for Nigerian petrol in all the neighbouring countries of Niger Republic, Benin Republic, Cameroun, Chad, Togo and Ghana which has no direct borders with Nigeria.
The NNPC boss expressed “concerned that continued cross-border smuggling of petrol will deny Nigerians the benefit of the Federal Government’s benevolence of keeping a fix retail price of N145 per litre, despite the increase in PMS open market price above N171 per litre.
Reacting to the ugly trend, Customs’ Comptroller-General, Ali was of the view that the service would work with the NNPC to stem the tide of cross-border smuggling of petroleum products, noting that all hands must be on deck to ensure the economic survival of the country. Ali commended the corporation for the elaborate data provided on the fuel supply situation, noting that this would enable the service fashion out the appropriate architecture to combat the menace. The Comptroller-General appealed on the authorities to tackle the issue of price differentials which is the underlying motivation for smuggling activities.
However, stakeholders are of the view that the security agencies across the country should have nipped the ugly development in the bud if there is no connivance adding that cross border-patrol should be intensified. If the security agencies show more concern on illegal refineries and oil theft which they have curbed in the Niger Delta, same process should be applied to cross-border smuggling of fuel to tackle the menace.