27 June 2021
After months of playing the ostrich, Nigeria National Petroleum Corporation has finally acknowledged the danger of persistent smuggling of petroleum products across the country’s borders and the role bad eggs in the security agencies play in and resistance of border communities to government’s efforts to shutting down the thriving black market. Chris Paul reports
At a meeting he had meeting the EFCC, Department of State Services (DSS), Nigeria Police Force (NPF), Nigeria Customs Service (NCS), Nigeria Security and Civil Defence Corps (NSCDC) and other relevant downstream and upstream stakeholders in attendance, during the past week, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, talked about the urgent need to seek sustainable solution to petrol smuggling challenge in the country.
The move was coming on the heels of an alarming rise in the volume of fuel consumption in the country daily.
According to the NNPC GMD, petrol daily truck out rose to 103 million per litre, which meant the federal government would now be spending about N9,682,000,000 to subsidise daily consumption by Nigerians.
Kyari’s fears are not unfounded, especially, considering the fact that fuel supply by the NNPC rose above pre-COVID-19 levels, to over 70 million litres in the fourth quarter of 2020.
According to the Nigerian oil company, 2.25 billion litres of petrol were sold and distributed in December, averaging at 72.72 million litres daily as against 57.44 million litres per day in November.
In October of the same year, it sold 52.63 million litres, while the first month of Q1, 2021 had 63.27 million litres .
But before Muhammadu Buhari came in as president and petroleum minister, in 2016, the country’s daily consumption averaged between 35-40 million litres daily.
From the statement issued by the NNPC in February of 2018, even in 2018, two years after Buhari took over the petroleum ministry, Nigerians still consumed about 35 million litres per day.
But a quantum leap to over 100m litres per day is one lump too large to manage. With this high volume of daily consumption, Kyari noted that the country can no longer sustain subsidy payment.
This was the reason for his invitation to all stakeholders to chart the way forward.
“As long as we don’t regulate volume, until we are able to exit this current level, which I know so much work is going on, then we have to manage the volume that we are exposed to between this price of N162 and N256,” he said.
To amplify the precarious situation, Kyari disclosed the open price of premium motor spirit has shot up to N256 per litre, while the present pump price of petrol remains at N162 per litre.
In other words, the government is subsidizing the product by N94 per litre.
“If we are to sell at the market today at current exchange rate, we will be selling the product at about N256 to a litre. What we sell today is N162, so the difference is at a cost to the nation.
“The difference comes back to as much as N140 billion to N150 billion cost to the country monthly.
“As long as the volume goes up, that money continues to increase and we have two sets of stress to face, stress of supply and stress of foreign exchange for the NNPC. We may not see foreign exchange cheque taking place for importation.
“In very recent data, we see what we really want in the beginning of May and June, there was a day we load out about 103 million litres of PMS within one day across the depots.
“We know it is nothing required, we know it is inappropriate and we also know that something wrong is happening that somebody is chasing something,” said the NNPC boss.
He conceded that, “We in NNPC, we are not in control of that, we are not in every depot, we don’t keep products in all the depot, but when the volume goes down, it comes down to us, when there is tight in supply, it comes back to the NNPC and we solve the problem.”
It was in the light of this that President Buhari directed that smuggling must be addressed decisively.
For the stakeholders in the downstream sector of the petroleum industry the distribution system and low pump price for the increasing rate of smuggling of premium motor spirit, petrol out of the country are to be blamed for the menace.
The stakeholders, which included marketers, depot owners and transporters advocated for synergy to check the activities of smugglers.
At the meeting, the Chairman of the Board of Directors of the Independent Marketers Association of Nigeria(IPMAN), Alhaji Aminu Abdulkadiri, urged the NNPC to release more products to its members.
With over 20,000 filling stations across the country, Abdulkadiri noted that IPMAN members sell directly to the Nigerian people.
With over three decades on the downstream field the IPMAN chairman knows the issues well enough to advise NNPC on how to solve the lingering crisis.
“One, we have almost 30,000 retail outlets in this country and both major marketers and DAPMAN have about 2000-3000, the rest belong to my members.
“But the truth there is who is responsible for storing and distributing this product? The bulk of this product is being distributed by DAPMAN.
“NNPC needs to work with IPMAN and DAPMAN ensure that marketers that have retail outlets that are viable for Nigerian consumers should be attached to each depot in this country. That way NNPC can track most of these products that are being either diverted or smuggled out.
“But so long as the source of distribution is not monitored and product are sold indiscriminately, the problem will continue, said Abdulkadir..
According to the DAPMAN Chairman, Depot and Petroleum Products Marketers Association of Nigeria, Mrs Winifred Akpani, the high volume of petrol consumption in Nigeria is a major worry for the group.
Determining the actual amount of petrol consumed in the country for her, remains a challenge.
The Department of Petroleum Resources, (DPR), she stressed, has a critical role to play, if smuggling was to end in the country.
“As depot operators, we do not own all these stations, but we sell a lot to people who have the stations. And one thing we always insist is where is your DPR licence.
“Not only are you going to show us your DPR licence, we are going to cross check with the list that is updated periodically and send to each depot by the DPR and it is only on that basis that we sell product to you,” she added.
Given the resources and technology available in the industry, she noted that tracking movement of trucks should not be a big challenge.
Closer monitoring of truck outs at the depots, will be a good direction to examine, according to the NART, Alhaji Yusuf Lawal Othman.
“The system needs to be reorganised. I don’t see any reason why you have 200 filling stations in a local government that do not consume more than 45000 litres.
“I also don’t see how the depots which normally do programme per day will programme quite a number of trucks to a Local government which does not consume more 45000 litres per day. It means that we are sleeping,” he said.
Within the first week in April, against the backdrop of massive fuel smuggling and amid opposition to border restriction by surrounding communities, the Comptroller-General, Nigeria Customs Service, Hameed Ali said its restriction of fuel supply, along the borders, to neighbouring countries, including Cameroun, is being opposed by communities and marketers.
In July 2019, NNPC cried out about the smuggling of its petrol out of the country to Ghana, Burkina Faso, Mali and Cote d’Ivoire as a result of the price disparity of petrol between Nigeria and the other West African countries.
Four months later, in November 2019, the federal government prohibited the supply of petroleum products to filling stations within 20 kilometres to the land borders.
However, 66 filling stations located within border communities were granted waivers by the federal government, to lift and supply petroleum products, in March last year.
The NCS National Public Relations Officer, Joseph Attah said, “As far as petroleum products and border management are concerned, the issue now is we really have to justify the actions that we have taken and which we are enforcing, which some people are finding difficult to accept and are rising against it. Some are even threatening to protest.
“This is the situation we are facing. There is a serious complaint that government should relax on that 20 kilometres radius. We are also facing protests by border communities, who feel that they are being denied easy access to petrol for their normal usage.”
In a 2020 newsletter, the Major Oil Marketers Association of Nigeria (MOMAN) placed the average pump price of petrol in other West African countries at between N312 and N570 per litre, compared to N166.4 per litre in Nigeria.
Smuggling and sales of petrol in neighbouring countries has become an illicit lucrative businesss for which those who deal in it are ready to stake their lives. For them it is survival issue.
Despite government’s shut down of all petrol filling stations within 20 kilometres of the border communities, smart fuel smugglers devised devious tactics to outsmart the system and create other routes of transporting petroleum products to neighbouring countries where they sell at high prices and make huge margins.
In one of the South-south States, the smugglers moved from land-based to sea-driven operations.
Operating between the town and the border town of Ekok in neighbouring Cameroon, the criminals resorted to adding extra tanks to their vehicles to conceal petroleum products
Popularly referred to as ‘mappers,’ by those, who are informed about the illicit trade, the smugglers hide as much as 100 litres of petrol in their extra tanks.
With the closure of the Ekok border, they turned to the sea routes and seem to be flourishing than before, operating with speed boats from the Agbokim River in Etung to Mamfe in Cameroon mostly at night.
A security personnel, who spoke on condition of anonymity said one of many ingenious devices the criminals use is polythene bags.
According to her, they have stopped using drums and jerry cans to convey fuel; they are done in such a way that it is hard to suspect they contain petroleum products.
A cursory look at the border checkpoints, within the South-west region, reveals that most of the personnel are compromised by desperate smugglers.
At Idiroko, for example, a border town in Ogun State, fuel smugglers have been known to pay their way through the over 30 security checkpoints mounted between the border and Sango Ota; according to eyewitnesses.
To facilitate easy passage for their illegal petroleum products, fuel smugglers operating most border towns across the country, are reported to pay between N200 and N500 at checkpoints.Apart from greasing the palms of some unscrupulous security personnel, smugglers are also known to hide fuel in caskets.
Believed to be bound for neighbouring Republic of Benin, an anti-bunkering team of the Nigeria Customs Service in the Ipokia local government area of Ogun State, on December 4, intercepted 10 jerry cans containing 25 litres of petrol and six jerry cans containing 10 litres of fuel that were concealed in two caskets by suspected smugglers.
A dominant feature in the Republic of Benin, particularly, Observers believe the ban on fuel supply to border towns, may have forced some youths resident in such communities, who are predominantly commercial motorcyclists and artisans, to take to smuggling as their means of livelihood.
In most of the Northern border towns, it would appear that the smugglers do not face as much raw deal their Southern counterparts experience. Like their Southern contemporaries, they cleverly conceal the products in various devices and transport them using unorthodox routes at night.
In fact, most of those who, spoke on condition of anonymity, said they were making more money after the ban on petroleum products smuggling. In one of the border villages in the North, a litre of fuel sell as high as N420 per litre.
Thus, due to their long distance from the country’s capital city, petroleum products attract higher prices in Nigerien border towns.
Like those of their counterparts in the South-west border in Sokoto, smugglers have similarly turned from rice for fuel smuggling; and those operating between Illela border in Sokoto State and Niger Republic appear to have found their groove in the sweet profits from the petro-product.
Sources disclosed that the mini tanks underneath their old, rickety Peugeot 504 cars, previously constructed for the purpose of smuggling rice, have been converted to containers for petroleum products by most of the smugglers.
Despite the closure of the only petrol filling station close to the Illela border post, the smugglers travel to places like Gwadabawa, Kware and sometimes to the Sokoto metropolis to buy fuel. When they return to Ilella, they turn the fuel into the tanks and move in a convoy, under the cover of darkness, to Koni in Niger Republic.
One of the major challenges to curbing the parasitic trade is the fact that the security personnel are helpless and cannot in the face of the numerous but illegal and porous routes around Illelaborder, used by the smugglers. They are simply too many for the Customs men to tackle.
Directing the EFCC to take charge of the anti-fuel smuggling campaign is a good move by the Buhari Administration.
Since the anti-corruption agency has powers to ask how people made their money especially where the sources of such wealth are questionable, the EFCC addition may get some bad eggs having a rethink.
That means the agency must begin by making scape goats in sister agencies who have become fat-cats in the security agencies.
Secondly, the EFCC must thoroughly check the disconnecting disparity in the figures given for how many millions of litres of fuel, Nigerians consume daily.
Lastly, the agency must get ready to detect, deter and destroy moles, their corrupt colleagues in the other agencies may plant in the midst of the anti-graft combatants by some corrupt elements in the other security agencies; trying to escape the law.
Without a doubt, this new assignment by the president will be the real test for the EFCC Chairman, Abdulrasheed Bawa, to prove his mettle as a true and thorough, no-nonsense anti-corruption Czar. On that plane, he has the very active NDLEA, Buba Marwa to beat in the war against bad and corrupt Nigerians.