• Friday, March 29, 2024
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Police, Army, EFCC, Customs, fail to curb petrol smuggling, NNPC asks lawmakers for help

Police, Army, EFCC, Customs, fail to curb petrol smuggling, NNPC asks lawmakers for help

Nigeria is running out of options to deal with the smuggling of imported petrol out of the country and the state-owned oil firm is now asking lawmakers to intervene after all the security agencies fail to resolve the problem.

Mele Kyari, group managing director of the Nigerian National Petroleum Corporation in a presentation during the House of Representatives Committee on Finance at an interactive session on the 2022-2024 Medium Term Expenditure and Revenue Framework (MTERF) and Fiscal Strategy Paper (FSP) asked lawmakers to intervene.

But it is unclear how else they could intervene after passing the Petroleum Industry Bill which clearly provides no funding for subsidies on petrol and decommissions the institution of government used in perpetrating the practice like the PPPRA and EF and made the national corporation a commercial entity.

According to a release by the NNPC, Kyari had implored the National Assembly to come to the aid of the Corporation in battling the menace of fuel smuggling, noting that the Corporation, based on the directive of the president, had mobilized some Federal Agencies like the Customs, the Economic and Financial Crimes Commission (EFCC), the Police, Civil Defence Corps and others, to find workable solutions to the menace.

Read also: The new PIB Act: Robbing Peter to pay Paul

Nigeria burnt over N608.8 billion in the first six months of 2021 on subsidising petrol on account of rising oil prices. Brent crude has gone from an average of $54.77 per barrel in January this year to as much as $72 per barrel in the first week of August.

On the propriety of establishing NNPC Retail stations in neighbouring countries to curb the challenge of illegal haulage of petroleum products across the border, Kyari said though the NNPC once considered the option, it had to jettison the idea when it became imperative that the measure would be counterproductive.

He explained that people who are smuggling are not looking for officially priced petroleum products. He further noted that going ahead to establish NNPC Retail stations would not yield the desired result since the people who take products across the border are not interested in selling at the official prevailing prices at approved stations but are interested in under the counter deals.

Kyari also clarified why the NNPC bought shares in Dangote Refinery to guarantee national energy security.

He said the equity interest was secured after due consideration of the national interest and best possible options.

“We will have right to 20 percent of production from this facility. We structured our equity participation on the basis that the refinery must buy at least 300,000 barrels of crude oil per day of our production. This guarantees our market at a period when every country is struggling to find market for their crude oil’’ he explained.

Kyari, in his presentation, provided a base oil price scenario in the medium term as follows: $57 per barrel for 2022, $61 per barrel for 2023 and $62 per barrel for 2023.

Kyari explained that the assumptions were arrived at after a careful appraisal of the three-year historical dated Brent Oil Price average of $59.07 per barrel premised on Platts Spot Prices.

“Price growth is to be moderated by the lingering concerns over COVID-19, increased energy efficiency, switching due to increased utilization of gas and alternatives for electricity generation. These are reflected in the Medium Term Revenue Framework’’ Kyari said.