Nigeria bleeding from rising petrol smuggling, says NNPC GMD

About 42 million litres of petrol are being smuggled out of Nigeria daily through the borders, the Nigerian National Petroleum Corporation has lamented.

The corporation said the country was bleeding from such huge amount of fuel smuggling, which had increased daily consumption of petrol from 60 million litres to 102 million litres.

The NNPC Group Managing Director, Mallam Mele Kyari, stated this in Abuja when he met with stakeholders, adding that smuggling had gone beyond what the NNPC could handle.

This is contained in a statement by the corporation’s General Manager, Public Affairs, Dr Taiye Obateru.

He also put the subsidy on petrol being paid by the government every month at N150bn, a situation meant to keep the pump price of petrol at N162 per litre.

Those that attended the meeting were the leaderships of the Department of State Services (DSS), Nigeria Customs Service (NCS), he Economic and Financial Crimes Commission (EFCC) and chief executives of agencies in the Ministry of Petroleum Resources.

Other groups that attended the stakeholders’ meeting organised by the corporation to halt fuel smuggling were 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).

Kyari said fuel smuggling was increasing the country’s subsidy payment and exacerbating the foreign exchange crisis.

He 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).”

He noted that with the increasing price of crude oil at the global market and the OPEC+ production cuts, the country could not 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 said.

He said the NNPC would introduce advanced cargo declaration in line with global best practices to tackle crude oil theft.

Kyari stated that going after smugglers was beyond the call of the corporation, adding that with the involvement of the EFCC, the situation would improve considerably.

 “But we in the 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,” he added.

Kyari said, with the extant directive from the President that smuggling had to be halted, all the stakeholders must begin to work together to address the problem, especially with the involvement of the security agencies.

He 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 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 N140bn to N150bn 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 said, “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.”

Chairman of the EFCC, Abdulrasheed Bawa, 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.

He said since part of the commission’s duty was to ensure the reduction of financial crime, the EFCC would do all it could to stop smuggling.