FG Paying N9.68bn As Petrol Subsidy Daily

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*Consumption Rises To 103m/Day
*FG Paying N94 Per Litre
*Why Petrol Smuggling Persists – Marketers, Transporters

The Group Managing Director of the Nigerian National Petroleum
Corporation, NNPC, Mele Kyari, has disclosed the open price of
premium motor spirit, petrol, has risen to N256 per litre.

With the present pump price of petrol pegged at N162 per litre,
it means the government is subsidizing the product by N94 per
litre.

Kyari said petrol daily truck out has risen significantly to 103
million per litre. Going by this rate, it means the federal
government would be spending about N9,682,000,000 to subsidize
Nigerians daily consumption.

He said: “If we are to sell at the market today at the current
exchange rate, we will be selling the product at about N256 to a
litre. What we sell today is N162, so the difference is at a cost
to the nation”.

He noted that with the high volume of daily consumption, the
country cannot sustain subsidy payment adding “as long as we don’t
regulate volume, until we are able to exit this current level,
which I know so much work is going on, then we have to manage the
volume that we are exposed to between this price of N162 and
N256.

“The difference comes back to as much as N140 billion to N150
billion cost to the country monthly.

“As long as the volume goes up, that money continues to increase
and we have two sets of stress to face, stress of supply and stress
of foreign exchange for the NNPC. We may not see foreign exchange
cheque taking place for importation”.

Kyari stressed at the meeting which had the Economic and
Financial Crimes Commission (EFCC), Department of State Services
(DSS), Nigeria Police Force (NPF), Nigeria Customs Service (NCS),
Nigeria Security and Civil Defence Corps (NSCDC) and other relevant
downstream and upstream stakeholders in attendance, harped on the
need to find urgent solution to petrol smuggling challenge in the
country.

He explained: “In very recent data, we see what we really want
in the beginning of May and June, there was a day we load out about
103 million litres of PMS within one day across the depots. We know
it is not required, we know it is inappropriate and we also know
that something wrong is happening that somebody is chasing
something.

“But we in NNPC, we are not in control of that, we are not in
every depot, we don’t keep products in all the depot but when the
volume goes down, it comes down to us, when there is tight in
supply, it comes back to the NNPC and we solve the problem”.

The NNPC boss said that President Muhammadu Buhari had directed
that smuggling must stop adding that it was the reason for inviting
all stakeholders to chart the way forward.

Meanwhile, stakeholders in the downstream sector of the
petroleum industry have blamed the distribution system and low pump
price for the increasing rate of smuggling of premium motor spirit,
petrol, out of Nigeria.

The stakeholders who include marketers, depot owners and
transporters called for synergy to check the activities of
smugglers.

Speaking at a stakeholder meeting to work out synergy to tackle
incidents of smuggling of petroleum products criminals, the
Chairman of the Board of Directors of the Independent Marketers
Association of Nigeria, IPMAN, Alhaji Aminu Abdulkadiri urged the
Nigerian National Petroleum Corporation, NNPC, to release more
products to its members.

Abdulkadiri noted that with over 20,000 filling stations across
the country, IPMAM members sell directly to the Nigerian
people.

He said: “I have been in this industry for over 30 years and
there are underlying issues that I want the GMD to take cognizance
of and this will go a long way in chasing who does what.

“One, we have almost 30,000 retail outlets in this country and
both major marketers and DAPMAN have about 2000-3000, the rest
belong to my members. But the truth there is who is responsible for
storing and distributing this product? The bulk of this product is
being distributed by DAPMAN.

“NNPC needs to work with IPMAN and DAPMAN ensure that marketers
that have retail outlets that are viable for Nigerian consumers
should be attached to each depot in this country. That way NNPC can
track most of these products that are being either diverted or
smuggled out.

“But so long as the source of distribution is not monitored and
product are sold indiscriminately, the problem will continue”, he
added.

On her part, Chairman, Depot and Petroleum Products Marketers
Association of Nigeria, DAPMAN, Mrs Winifred Akpani said the group
was concerned about the high volume of petrol consumption in
Nigeria.

Akpani said it was difficult to determine the actual amount of
petrol consumed in the country pointing out however that the
Department of Petroleum Resources, DPR, has critical role to play
if smuggling was to end in the country.

“We as depot operators do not own all these stations but we sell
a lot to people who have the stations. And one thing we always
insist is where is your DPR licence not only are you going to show
us your DPR licence we are going to cross check with the list that
updated periodically and send to each depot by the DPR and it only
on that basis that we sell product to you,” she added.

She noted with the resources and technology available in the
industry, tracking the movement of trucks should not be a big
challenge.

Also speaking, the National President of the Nigerian
Association of Road Transport Owners, NARTO, Alhaji Yusuf Lawal
Othman called for closer monitoring truck outs at the depots.

According to him, “The system needs to be reorganized. I don’t
see any reason why you have 200 filling stations in a local
government that does not consume more than 45000 litres.

“I also don’t see how the depot which normally does programme
per day will programme quite a number of trucks to a local
government which does not consume more 45000 litres per day. It
means that we are sleeping”.