Gasoline is still smuggled out of this country, traders say
As a country, we still cannot tell the exact volume of Premium Motor Spirit, commonly known as gasoline, that we consume daily, the federal government has said.
He said so just as oil traders explained that Nigeria’s inability to give an accurate figure on how much gasoline it consumes daily was due to the continued smuggling of PMS out of the country.
Minister of State for Petroleum Resources, Chief Timipre Sylva, said the Nigerian National Petroleum Company Limited had also agreed that Nigeria could not say the exact amount of gasoline consumed daily in the country.
He disclosed this in an interview with his media team, led by his Senior Advisor, Media and Communications, Horatius Egua, which was made available to our correspondent in Abuja on Friday.
Asked to respond to the NNPC’s proposed N3tn fuel subsidy, amid concerns over the country’s PMS consumption figure, Sylva replied, “I would have preferred this question to be addressed to the NNPC.
“I have made my views known on this matter in the past. NNPC agreed with me that they were unsure of the exact consumption figure. »
He said the truth was that if the country’s petroleum products were smuggled out of the country, no one could tell what volume was involved today, tomorrow or next week, adding that the NNPC could not. say that she knew those numbers.
“It more or less fuels a criminal economy. NNPC imports the products and no one knows the exact destination of the products in the end,” Sylva said.
He added: “Imported products come into Nigeria, and from there go out our borders to neighboring countries.
“So as a country we cannot say the exact volume of petroleum products that we consume on a daily basis. All we have done is assume the level of consumption over a period of time and work with that.
He did, however, express his belief that the NNPC probably had a better answer to this, pointing out that “I personally don’t.
“I said that publicly before I don’t know the number. When I took office, I was first told that our daily consumption was 66 million litres.
“Then when fuel prices fell from N145 to N162, the consumption figure temporarily dropped to around 40 million liters per day as the arbitrage opportunity narrowed,” Sylva said.
He added: “Then the value of the naira fell again and the number went back up to over 60 million litres. I am told that the figure sometimes reaches 90 or more than 100 million liters. I don’t know how it happens.
“At this rate, I said if anyone is considering a criminal enterprise, look no further than the fuel subsidy.”
This is why, the minister said, he has continued to advocate the removal of fuel subsidies from the country’s PMS pricing model and deregulation.
He said the President, Major General Muhammadu Buhari (Retired), had done everything to solve the problem, including closing the country’s borders with neighboring countries, but the crime had not been stopped.
“The truth is that what the president could do was close the ‘formal’ borders. What about illegal routes? asked Sylva.
On what could be done, the Minister said that if the subsidy component was removed through deregulation, the smuggling of PMS to neighboring countries would cease.
“Of course, we need the market from there. But now we are punishing ourselves because every liter we import at our expense will always find its way outside the country,” he said.
He added, “Now the government is trying to subsidize our citizens so that our people at least benefit from the subsidy on petroleum products.
“But, now, because of the way our borders are, it’s very difficult. Now we’re inadvertently subsidizing all of Africa. That’s the thing we can’t handle.
Also speaking on the matter, the executive secretary of Nigeria’s Major Oil Marketers, Clement Isong, told our correspondent that cheap fuel in the country has remained an incentive for smugglers.
He said: “The higher the price (of petrol) outside the country and the more you see the prices where they are in the country, the natural response is that normal people such as farmers, okada drivers, transporters, etc., will quit their jobs to sell gasoline.
“It’s because of the mark-up. That’s why, especially in Abuja, you see a lot of people carrying jerry cans of fuel reselling them on the main roads. It also plays along our borders.
“As long as the international price continues to rise and we keep our own prices where they are, what will happen is that these countries will suck up the products from Nigeria and you just won’t find the product in Nigeria. ”
Isong added, “If you go to those countries, the traders there will tell you that they can’t sell because the product from Nigeria is killing their market. This happens in all countries around Nigeria.
He said normal supply chain volumes would continue to decline as products left Nigeria, describing those smuggling PMS as ordinary citizens.
“It’s because they just make more money buying from here at N162-N165/litre and crossing the border to sell at N500/litre. That’s more money for them and that’s just the law of economics, called arbitrage, which is market distortion,” Isong said.
He added, “And that’s what the gasoline subsidy is doing in Nigeria, distorting the market. Something is worth N500 and you sell for N200. Now, where you’re supposed to find it at N200, you won’t see it because it’s moved to the actual value of N500.
“It may also contribute to the scarcity we are seeing in parts of Nigeria. That is why NNPC, if it is supposed to supply normally 60 million liters per day, to avoid queues at gas stations, will have to increase its supply to 90 to 100 million liters. This is the problem.”
The MOMAN official said Nigeria must wean itself off the fuel subsidy, “because we are killing both our present and our future.
“We just can’t afford it. We borrow money for this.
All rights reserved. This material and any other digital content on this website may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without the prior express written permission of PUNCH.
Contact: [email protected]