23 April 2019

Nigeria: NNPC, Customs, DPR Collaborate to Check Petroleum Products Smuggling

A tripartite committee consisting officials of the Nigerian National Petroleum Corporation (NNPC), Nigeria Customs Service and the Department of Petroleum Resources (DPR) was on Tuesday inaugurated to coordinate the battle against smuggling of petroleum products.

At the inauguration, the Group Managing Director of the NNPC, Maikanti Baru, expressed worry about the growing menace of petroleum products smuggling.

Mr Baru said the inauguration was a strategic move by the government to tame the malaise.

The inaugural meeting of the committee at the Customs House in Abuja was attended by Mr Baru, the Comptroller General of NCS, Hameed Ali, and the Director of the DPR, Mordecai Ladan.

At the meeting, the NNPC GMD said smuggling of petroleum products across the country's borders was causing serious revenue losses.

He said the illegal activities of smugglers have been subverting the government's efforts to ensure an adequate supply of petroleum products in all parts of the country.

According to Mr Baru, the malaise has also denied Nigerians the full benefits of the adequate supply of petroleum products.

"The negative economic impact of smuggling is that it is undermining Nigeria's economic growth as a huge amount of money is spent in terms of under-recovery. This huge loss is draining the treasury. Remember, these are monies that could be used to develop several critical sectors of the economy," Mr Baru said.

The issue of "cost under-recovery", which is payment of fuel subsidy by the NNPC, has been a source of controversy since the present administration came to power in 2015.

At inception, the Buhari administration announced the removal of fuel subsidy and increase of the retail fuel price from N86 per litre to the current N145.

However, despite the removal of fuel subsidy, recent findings showed the Federal Government was still subsidising the supply of petroleum products through the NNPC, although the exact cost for the under-recovery has remained a secret.

The NNPC GMD said the diversion and smuggling of the products by unscrupulous marketers had remained a major concern.

He said available records showed there was an upsurge in incidents of petroleum products smuggling across Nigerian borders in recent months.

He said the illegal activity is incentivised by a high rate of arbitrage, especially considering the high price of petrol in Nigeria's neighbouring countries.

The Customs boss said the committee was necessary for the three organisations to collaborate and find a lasting solution to the menace.

Mr Ali said working with information on a real-time basis, the service would leave no stone unturned to ensure that smugglers of petroleum products are stopped in their tracks.

"We have enough men and resources that can manage the nation's 4,070 kilometres border-line and address this menace once and for all. What we need however is information on a real-time basis," he said.

Also speaking, Mr Ladan, said his department was open to collaborations with sister government agencies.

Mr Ladan, who attributed the surge in smuggling to high arbitrage and culpability of unlicensed filling stations, said his organisation would not hesitate to name and shame the perpetrators.

"As the industry regulator, we are only aware of 1,900 licensed filling stations. We will, however, continue to provide more information for this Joint Committee to succeed," Mr Ladan said.

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