Business National News

We’re now subsidizing petrol with N774m daily – NNPC

The Nigerian National Petroleum Corporation (NNPC) has said that it is now subsidising the supply of petrol to the tune of N774 million every day in view of the landing cost of the imported fuel and the regulated pump price in the domestic market.

The development came few days after the NNPC refused a Freedom of Information (FOI) request by a senior lawyer, Mr Femi Falana (SAN) on how much the government was spending on subsidy.

The benefit of the costly subsidy to the national treasury, according to the NNPC, is being enjoyed by only a few as well as in neighbouring countries on the account of the continued smuggling of the fuel across the borders.

The Group Managing Director of the NNPC, Dr Maikanti Baru, stated this when he made a passionate plea to the comptroller general of the Nigerian Customs Service, Hameed Ali, during his visit to the Customs chief at the weekend.

He added that there was the need to help check the proliferation of fuel stations in communities with international land and coastal borders across the country.

He said the development had energised unprecedented cross-border smuggling of petrol to neighboring countries, making it difficult to sanitise the fuel supply and distribution matrix in the country.

A statement made available by the NNPC also quoted Baru saying that, “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.

“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.”

Baru also stated 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.

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

He added that the activities of the smugglers has led to recent 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 is importing about one million metric tonnes per annum of petrol due to the poor performance of the four oil refineries managed by the NNPC.

Incidentally, NNPC is the only organisation currently involved in the fuel importation after private companies pulled out due to their inability to recoup their investment in their venture.

Support Quality Journalism in the Niger Delta Region

Join us in our mission to bring development journalism, cultural preservation, and environmental awareness to the forefront. Your contribution makes a difference in the lives of the people of the Niger Delta. Donate today and be a part of the change!

Leave feedback about this