Almosttwo years after the Federal Government stopped fuel
subsidy that consumed trillions of naira in the past, Nigerians were
yesterday shocked when the Nigerian National Petroleum Corporation
(NNPC) announced that it currently spends N774 million daily as subsidy
on the 50 million litres of Premium Motor Spirit (PMS) consumed across
the country.
Although it described the amount as
“under-recovery,” the oil firm stated that the staggering sum was
brought about by the proliferation of filling stations in communities
within the nation’s international land and coastal borders.
This disclosure came a few days after the
Corporation turned down a Freedom of Information request by Femi
Falana, a human rights lawyer, on how much the government was spending
on subsidy.
In giving the cost government was paying
on subsidy, the Group Managing Director, NNPC, Maikanti Baru, had argued
that the multiplication of filling stations had energised unprecedented
cross-border smuggling of petrol to neighbouring countries, making it
difficult to sanitise the fuel supply and distribution matrix in
Nigeria.
Baru who spoke when he led the management
team of the Corporation on a visit to the Comptroller General of the
Nigeria Customs Service (NCS), Col. Hameed Ali (retd), according to a
statement issued on Sunday by the firm’s Group General Manager, Group
Public Affairs Division, Ndu Ughamadu, revealed that detailed study
conducted by NNPC indicated strong correlation between the presence of
the frontier stations and the activities of fuel smuggling syndicates.
He said the activities of the smugglers
led to 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.
He said it had energised unprecedented
cross-border smuggling of petrol to neighbouring countries, making it
difficult to sanitise the fuel supply and distribution matrix in the
country.
“NNPC is concerned that continued
cross-border smuggling of petrol will deny Nigerians the benefit of the
Federal Government’s benevolence of keeping a fixed retail price of N145
per litre, despite the increase in PMS open market price above N171 per
litre,’’ an NNPC statement quoted Baru as saying during a visit to the
Customs chief at the weekend.
“Based on the heightened petrol
consumption rate of 50 million litres per day, the Corporation was
incurring an under-recovery of N774 million everyday,” he said.
According to Baru, 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.
He added that this had resulted in a
thriving market for Nigerian petrol in all neighbouring countries of
Niger Republic, Benin Republic, Cameroon, Chad and Togo and even Ghana,
which has no direct borders with Nigeria.
The activities of the smugglers, he said,
led to recently observed abnormal surge in the evacuation of petrol
from less than 35 million litres per day to 60 million litres per day
and even to as high as 80 million litres per day as at December last
year.
Nigeria imports around one million metric
tonnes per annum of petrol due to the poor performance of the four oil
refineries managed by NNPC.
This is even as the NNPC is the only
entity currently involved in fuel importation after private companies
pulled out due to their inability to recoup their investment in the
venture.
Meanwhile, the Petroleum and Natural Gas
Senior Staff Association of Nigeria (PENGASSAN) has called on the
Federal Government to reimburse NNPC for expenses it incurred from
payment of subsidy to the marketers.
Rising from its National Executive Council (NEC) meeting in Warri, Delta State at the weekend, PENGASSAN
said that NNPC has continued to shoulder the responsibility of
providing products to close gaps created by the withdrawal of other
marketers owing to non-payment of subsidy claims from 2015 to 2017.
A communique
signed by the PENGASSAN President, Comrade Francis Olabode Johnson, and
the General Secretary, Comrade Lumumba Okugbawa, stated
that the extra burden absorbed by NNPC is depleting the Corporation’s
finances and consequently hampering effective discharge of its statutory
obligations.
The senior staff trade union therefore
called on the government to reimburse the huge payments incurred within
the period under review.