The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, has claimed that the corporation is currently incurring an under-recovery (another term for subsidy) of N774 million daily.
He blamed the development on dubious activities of those who smuggle the product to neighbouring countries, which have increased fuel consumption in Nigeria to 50 million litres per day.
Under-recovery in clear terms means that NNPC is paying the cost of the differential between the official pump price of petrol and the actual cost of it.
A statement released by the corporation in Abuja quoted Baru as making this claim when he led top management team of the NNPC on a visit to the Comptroller-General of Nigeria Customs Service, Col. Hameed Ali (Retd).
Baru during the visit maintained that the activities of the smugglers had resulted in 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.
The NNPC GMD, who said that the development was in sharp contrast to established national consumption pattern, also raised an alarm on the 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 sanitise the fuel supply and distribution matrix in the country.
According to Baru, a thorough study conducted by the NNPC showed a strong correlation between the presence of the frontier stations and the activities of fuel smuggling syndicates.
Providing a detailed presentation of the findings, Baru hinted that 16 states, having among them 61 local government areas with border communities, account for 2,201 registered fuel stations, and that the 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.
The NNPC boss further stated 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.
This he said, had led to a thriving market for Nigerian petrol in all the neighbouring countries of Niger Republic, Benin Republic, Cameroun, Chad and Togo and even Ghana which has no direct borders with Nigeria.
He said, “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.”
In his response, Ali assured that the Customs would work with the NNPC to stop the cross-border smuggling of petroleum products.
Adding that all hands must be on deck to ensure the economic survival of the country. (Ripples Nigeria)