The Nigerian National Petroleum Corporation (NNPC) yesterday disclosed that it was spending N774 million daily as subsidy on the 50 million litres of Premium Motor Spirit (PMS) consumption nationwide.
The corporation, which described the expenditure as under-recovery, attributed the daily cost to the proliferation of filling stations in communities located around land and coastal borders.
Making the disclosure in a statement signed by the Group General Manager, Group Public Affairs Division, Ndu Ughamadu, the Corporation’s Group Managing Director, Maikanti Baru, lamented that the multiplication of filling stations had triggered unprecedented cross-border smuggling of petrol to neighbouring countries.
Baru was quoted as giving these hints when he led a management team of the corporation on a visit to the Comptroller-General, Nigeria Customs Service, Col. Hameed Ali (rtd.).
According to him, a detailed study conducted by the state-owned petroleum marketer indicated strong correlation between the presence of the frontier stations and the activities of fuel smuggling syndicates.
He said the activities of the smugglers, which made the sanitization of the downstream market difficult, were also responsible for the 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 with established national consumption pattern.
Expatiating on the findings by the Corporation, the NNPC boss explained that 16 states with 61 local government areas with border communities, accounted for 2,201 registered fuel stations with a combined capacity of 144,998,700 litres of petrol.
Similarly, he disclosed that another eight states with coastal border communities spread across 24 LGAs accounted for 866 registered fuel outlets with combined petrol tank capacity of 73,443,086 litres.
Baru stated further the findings showed that among the states with land border, nine LGAs in Borno State had 337 fuel outlets with combined petrol storage capacity of 21,114,480 litres while three LGAs in Ogun State accounted for 633 fuel stations with combined petrol tankage of 40,485,000 litres.
On the distribution of fuel stations in Lagos, Baru hinted that Lagos with one LGA as border community has 235 registered fuel stations with total storage facility of 19,916,600 litres.
This is even as he stated that on the coastal front with six LGAs the state also led with 487 registered fuel stations with combined in-built storage capacity of 50,239,560 litres.
“Akwa Ibom, with five LGAs, has 134 registered retail outlets with capacity to store 8,322,986 litres; while Ondo State, with two LGAs, has 110 fuel stations with capacity to store 3,871,320 litres”, the NNPC boss stated.
He explained that due to differential in petrol price between Nigeria and other neighbouring countries, it had become lucrative for smugglers to use the frontier stations as a conduit for the smuggling of products across the borders.
The ugly development, he said, had resulted in a thriving market for Nigerian petrol in Niger Republic, Benin Republic, Cameroon, Chad and Togo, as well as Ghana, which has no direct borders with Nigeria.
“The NNPC is 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”, Baru stated
In his welcome remarks, the Comptroller General of Nigeria Customs Service (NCS), promised that the Service would work with the corporation 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.
He thanked the NNPC for the elaborate data provided by the corporation on the fuel supply situation, adding that this would enable the service to fashion out the appropriate architecture to combat the menace.
Ali urged the government to address the problem of price differentials as a strategic option of curbing smuggling activities.