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Daily Petrol Subsidy Now At N774 Million – NNPC

by on March 5, 2018
 

The Nigerian National Petroleum Corporation (NNPC) on Sunday, March 4, 2018, said N774 million is now being spent daily to subsidise petrol consumption of about 50 million litres daily in the country.

The corporation said daily evacuation of Premium Motor Spirit (petrol), has varied in recent months ranging from 35 million litres per day to 60 million litres per day.

NNPC in a statement issued by its Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu said evacuation has gone to “as high as 80 million litres per day as at December last year. It is now settling at an average of 50 million litres per day”.

Ughamadu said NNPC’s Group Managing Director, Dr. Maikanti Baru disclosed this when he led top management team on a visit to the Comptroller General of the Nigerian Customs Service, Col. Hameed Ali (Rtd).

The Federal Government had in March 2016 removed subsidy on petrol and with no appropriation from the National Assembly, NNPC is calling the present shortfall in the price of petrol “under-recovery”.

Petrol currently sells at government approved N145 per litre but the landing cost is N171 per litre, that is, before distribution and profit margins are added.

Baru stated that proliferation of fuel stations in communities with international land and coastal borders across the country is fueling unprecedented cross-border smuggling of petrol to neighboring countries, making it difficult to sanitize the fuel supply and distribution matrix in the country.

Baru, the statement added, 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 explained that “because of the obvious differential in petrol price between Nigeria and other neighboring 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”, the statement said.

He noted that this had resulted in a thriving market for Nigerian petrol in all the neighouring countries of Niger Republic, Benin Republic, Cameroun, Chad and Togo and even Ghana which has no direct borders with Nigeria.

“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”, he said.

He said that “based on the heightened petrol consumption rate of 50 million litre per day, the corporation was incurring an under-recovery of N774 million every day”.

He said that the activities of the smugglers had led to recent observed abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 milion litres per day which is in sharp contrast with established national consumption pattern.

Providing a detailed presentation of the findings, the NNPC GMD informed that 16 states, having amongst them 61 Local Government Areas with border communities, account for 2,201 registered fuel stations.

The fuel tank, he noted, had a combined capacity of 144, 998, 700 litres of petrol.

Col. Ali in his response said 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.

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