… As PENGASSAN demands reimbursement
Adewale Sanyaolu
Nearly two years after the Federal Government halted the regime of 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.