Nigerian National Petroleum Corporation (NNPC) yesterday lamented the escalating incidence of petrol smuggling across Nigeria’s borders, which it puts at a whopping 42 million litres per day.
The corporation said the unbridled smuggling has increased Nigeria’s estimated daily consumption of 60 million litres to 102 million litres.
With the menace now gaining more momentum and illegal dealers more daring, the oil company stated that the subsidy that the government pays on petrol every month, in order to keep the pump price of petrol stable at N162 per litre now hovers between N140 billion and N150 billion.
The development has made the corporation to be unable to contribute to the Federation Account, as the subsidy it pays has kept wiping out the little gains made from rising international oil prices, which has now exceeded $75 per barrel.
NNPC Group Managing Director, Mallam Mele Kyari, according to a statement yesterday by the corporation’s General Manager, Public Affairs, Dr. Taiye Obateru, said on Tuesday in Abuja when he met with stakeholders, including the leadership of the EFCC, Department of State Services (DSS), Nigeria Customs Service (NCS) and chief executives of agencies in the Ministry of Petroleum Resources, that smuggling had gone beyond what the NNPC could handle.
Some other groups present during the stakeholders’ meeting organised by the corporation to halt fuel smuggling included: the Independent Petroleum Marketers Association of Nigeria (IPMAN), the National Association of Road Transport Owners (NARTO), Petroleum Tanker Drivers (PTD), Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Marketers Association (DAPPMA).
At the meeting, also attended by the Nigeria Security and Civil Defence Corps (NSCDC) officials, Kyari said the country was bleeding from fuel smuggling, which is increasing the country’s subsidy payment and exacerbating the foreign exchange crisis.
Kyari said the gathering was at the instance of President Muhammadu Buhari who mandated the Ministry of Petroleum Resources, the NNPC, the EFCC and all other security agencies to do everything possible to stop crude oil theft and illicit truck-out of petroleum products, which he described as major economic crimes that have hindered Nigerians from enjoying the benefits of subsidised petroleum products.
He urged all industry stakeholders to collaborate with the NNPC to ensure that the daily national petroleum products consumption, which shot up to 102 million litres in May, is reduced to about 60 million litres.
He added that it was obvious that that huge volume of petrol was not consumed by Nigerians alone.
Kyari said: “We all agree that smuggling is not a business that should be condoned because even for deregulated petroleum products, it brings extra cost burden on this country both in terms of safety and security of supply and in securing of foreign exchange. It even constitutes more burden to this country when the product involved is a regulated product like Premium Motor Spirit (PMS).”
According to him, with the increasing price of crude oil at the global market and the OPEC+ production cuts, the country cannot afford to shoulder the cost of smuggling.
“We all know that our daily consumption is not up to 60 million litres. We all know that, and that is why we have to pull it down. We will pull it down by every means necessary,” he added.
He said NNPC would introduce advanced cargo declaration in line with global best practices to tackle crude oil theft.
Kyari stated that going after smugglers is beyond the call of the corporation, adding that with the involvement of the EFCC, the situation will improve considerably.
He added: “But we in NNPC, we are not in control of that, we are not in every depot, we don’t keep products in all the depots, but when the volume goes down, it comes down to us. When there is tight supply, it comes back to the NNPC and we solve the problem.”
According to him, with the extant directive from the president that smuggling has to be halted, all the stakeholders must now begin to work together to solve the problem, especially with the involvement of the security agencies.
Kyari said Buhari had instructed that the menace must be stopped by every means necessary and called on the stakeholders present to think outside the box since all the layers of controls that had been put in place before now seemed to have failed.
He stated that with the current exchange rate and considering other price determinants, the pump price of petrol should be N256 per litre.
“What we sell today is N162, so the difference is at a cost to the nation,’’ he said.
Kyari stated that with the current high volume of daily consumption, the country can no longer sustain subsidy payment, and if the volume is not regulated, the bleeding will continue.
He said: “I know that so much work is going on, and then we have to manage the volume that we are exposed to between this price of N162 and N256. The difference comes back to as much as N140 billion to N150 billion cost to the country monthly.
“And as long as the volume goes up, that money continues to increase and we have two sets of stress to face, the stress of supply and the stress of foreign exchange for the NNPC.”
Minister of State, Petroleum Resources, Chief Timipre Sylva, also decried the increasing rate of smuggling but expressed optimism that with the EFCC’s involvement, the situation would change.
“We brought in the big hammer, and the big hammer as you can see is the EFCC because it is economic sabotage and I believe with the EFCC in the picture, the system will work even better,” he said.
He stated that whatever is being done in the area of deregulation will not make any impact without Nigeria knowing exactly its actual daily consumption of petrol.
“When I first came in as minister, I was informed that the daily consumption in the country was around 60 million to 62 million litres a day, which to me sounded a little bit outrageous, considering the number of cars we have on the road,” he said.
Chairman of the EFCC, Mr. Abdulrasheed Bawa, said since part of the commission’s duty was to ensure the reduction of financial crimes, the EFCC would do all it could to stop smuggling.
Bawa assured Nigerians that everything will be done to stop smuggling, ensure that perpetrators are brought to book and justice is served.
He said smuggling of petroleum products was worrisome and assured Nigerians that the EFCC was fully committed to the special operation, codenamed “Operation White” designed to check illegal exportation.
