• Tuesday, July 16, 2024
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How corruption, cross-border smuggling, encourage elevated PMS consumption, huge NNPC ‘underrecovery’

How corruption, cross-border smuggling, encourage elevated PMS consumption, huge NNPC ‘underrecovery’

Recent analysis of reports from Nigeria Bureau Statistics (NBS) and Nigerian National Petroleum Corporation (NNPC) have revealed how high volumes of petroleum products have continued to be smuggled from Nigeria to neighbouring countries, questioning Nigeria’s 54 million litres daily petrol consumption figure.

From 35 million litres of Premium Motor Spirits (PMS), popularly known as petrol consumed daily prior to the increase in the pump price to N145, average daily consumption skyrocketed to over 54 million litres in September 2018, figures released by the National Bureau of Statistics (NBS) showed.

BusinessDay analysis of the latest financial records of NNPC showed from August 2017 to August 2018, the government paid a total of N542 billion for Under Recovery while in the month of August alone the government paid N60.6 Billion.

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State comparison carried out by BusinessDay showed that States that have international borders like Ogun, Zamfara and Borno often have elevated consumption patterns for PMS.
According to the NBS data, in Q3 2018, Ogun state (bordering Benin republic) had 4,177 trucks transporting 155.66 million volumes of PMS to the state.

This compares to Rivers State with a much larger economy or State GDP, which had 3,181 trucks transporting 128.79 million litres to the state.

Borno state from the north-east of Nigeria (which borders Cameroon) recorded 877 trucks, transporting 41.4 million litres of petrol in the same period.

According to NBS, Zamfara state which shares border with Niger republic had 2,078 trucks that conveyed 93.8 million litres to the state, compared to a much industrialized Anambra state which had 1,719 trucks delivering 76.3 million litres of petrol to it.

Anambra state, one of the most urbanized states in Nigeria boast of an annual population growth rate of 2.21 percent and has over 60 percent of its people living in urban areas. It’s also home to ‘Onitsha Main Market’; the largest market in Africa based on geographical size and volume of goods.

“Those numbers in states in the Northwest and Northwest region are actually smuggling which is striving easily in that part of the world,” Luqman Agboola, head of energy research at Sofidam capital Limited said.

Agboola noted that for as long as there is subsidy the problem will continue to persist as monies that should generate revenue into Nigeria goes into private pockets.

Jubril Kareem energy researcher at EcoBank group said the higher level of subsidy being borne by the NNPC is an indication of the unsustainable pegging of PMS Price.

ENDURANCE OKAFOR & DIPO OLADEHINDE