Nigeria’s Subsidised Petrol Smuggled As Far As Mali, Say Customs

The Nigeria Customs Service has said Premium Motor Spirit,
popularly known as petrol, is being smuggled out of Nigeria in
large quantities after it has been subsidised by the Federal
Government.

According to the border security outfit, the petroleum product
is being diverted to as far as Mali.

The Controller-General of the NCS, Col. Hameed Ali, decried that
the Department of Petroleum Resources had approved the
establishment of filling stations along the land borders, while the
Nigerian National Petroleum Corporation keeps supplying the
commodity to the stations against Customs’ advice.

Ali said the situation was responsible for the increasing volume
of fuel being released by the NNPC as daily consumption.

The Customs boss stated this in Abuja on Monday at the public
hearing organised by the House of Representatives’ Committee on
Finance on the 2022-2024 Medium Term Expenditure Framework and
Fiscal Strategy Paper.

Chairman of the committee, James Faleke, had earlier asked the
Minister of Finance, Budget and National Planning, Zainab Ahmed,
why the Federal Government has projected crude oil per barrel at
$57 for the 2022 budget when the global market prices are now about
$70.

Ahmed, however, said the government was using the differentials
to pay subsidy on petrol, which is referred to as
under-recovery.

The minister had said, “The crude oil price that we propose in
the budget is a result of consultations with the NNPC and a review
of the research that is done by EIA as well as the World Bank and
other institutions. And we normally just take a middle road. We
don’t look at the price today; we look at the projections for the
price, for 2022, 2023 and 2024.

“Also, fortunately for us, right now, the increase in the price
of crude oil should have resulted in more revenue to the
federation. But because we are suffering a significant level of
under-recovery as a result of fuel subsidies, the impact is not
seen.”

But Ali decried that apart from spending on subsidies, the
subsidised fuel was being smuggled to other West African countries
where the pump prices were higher.

The Customs boss said, “The issue of smuggling of fuel from
Nigeria to the neighbouring countries is simply because of price
differential. The prices outside our shores and borders are higher,
and that is what attracts people to move this product outside. And
this product is not only limited to Benin, Niger or Chad, it goes
up to Mali.”

The Nigeria Customs Service has said Premium Motor Spirit,
popularly known as petrol, is being smuggled out of Nigeria in
large quantities after it has been subsidised by the Federal
Government.

According to the border security outfit, the petroleum product
is being diverted to as far as Mali.

The Controller-General of the NCS, Col. Hameed Ali, decried that
the Department of Petroleum Resources had approved the
establishment of filling stations along the land borders, while the
Nigerian National Petroleum Corporation keeps supplying the
commodity to the stations against Customs’ advice.

Ali said the situation was responsible for the increasing volume
of fuel being released by the NNPC as daily consumption.

The Customs boss stated this in Abuja on Monday at the public
hearing organised by the House of Representatives’ Committee on
Finance on the 2022-2024 Medium Term Expenditure Framework and
Fiscal Strategy Paper.

Chairman of the committee, James Faleke, had earlier asked the
Minister of Finance, Budget and National Planning, Zainab Ahmed,
why the Federal Government has projected crude oil per barrel at
$57 for the 2022 budget when the global market prices are now about
$70.

Ahmed, however, said the government was using the differentials
to pay subsidy on petrol, which is referred to as
under-recovery.

The minister had said, “The crude oil price that we propose in
the budget is a result of consultations with the NNPC and a review
of the research that is done by EIA as well as the World Bank and
other institutions. And we normally just take a middle road. We
don’t look at the price today; we look at the projections for the
price, for 2022, 2023 and 2024.

“Also, fortunately for us, right now, the increase in the price
of crude oil should have resulted in more revenue to the
federation. But because we are suffering a significant level of
under-recovery as a result of fuel subsidies, the impact is not
seen.”

But Ali decried that apart from spending on subsidies, the
subsidised fuel was being smuggled to other West African countries
where the pump prices were higher.

The Customs boss said, “The issue of smuggling of fuel from
Nigeria to the neighbouring countries is simply because of price
differential. The prices outside our shores and borders are higher,
and that is what attracts people to move this product outside. And
this product is not only limited to Benin, Niger or Chad, it goes
up to Mali.”