The Minister of State for Petroleum Resources, Ibe Kachikwu has disclosed that the Federal Government of Nigeria now spends N1.4 trillion on subsidising Premium Motor Spirit, popularly called petrol.
Mr. Kachikwu disclosed this while speaking at a Liquefied Petroleum Gas workshop organised by the Federal Ministry of Petroleum Resources in Abuja on Thursday.
The Nigerian National Petroleum Corporation, NNPC, had said in March that it was spending N774 million daily (about N23.99 billion monthly) as subsidy on the 50 million litres of PMS consumed across the country. The oil firm stated that the huge under-recovery was due to the proliferation of filling stations in communities with international land and coastal borders across the country.
Maikanti Baru, the Group Managing Director, NNPC, explained that the multiplication of filling stations had energised unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitise the fuel supply and distribution matrix in Nigeria. He said the activities of the smugglers led to the recent abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 million litres per day, which was in sharp contrast to the established national consumption pattern.
Providing a detailed presentation of the findings, the NNPC boss noted that 16 states, having among them 61 local government areas with border communities, accounted for 2,201 registered fuel stations. He stated that the tanks of the stations had a combined capacity of 144,998,700 litres of petrol, adding that in the same vein, eight states with coastal border communities spread across 24 LGAs accounted for 866 registered fuel outlets, with combined petrol tank capacity of 73,443,086 litres.
Baru explained that because of the obvious differential in petrol prices between Nigeria and other neighbouring countries, it had become lucrative for smugglers to use the frontier stations as a veritable conduit for the smuggling of products across the borders. This, he said, had resulted in a thriving market for Nigerian petrol in Niger Republic, Benin Republic, Cameroon, Chad and Togo, as well as Ghana, which has no direct borders with Nigeria.
Kachikwu had earlier told journalists that the petroleum resources ministry was planning to unveil an infrastructure rebirth map for the country’s oil and gas sector. He said the map, which President Muhammadu Buhari is expected to unveil in the next two months, would open up the sector to investments in critical areas.
