The Federal Government has said the closure of the land borders by the Nigeria Customs Service has cut down the consumption of Premium Motor Spirit, also known as petrol, from 60 to 52 million litres per day. This represents a difference of eight million litres per day.
The Minister of State for Petroleum Resources, Timipre Sylva, said this in Abuja on Thursday when he appeared before the joint Senate and House of Representatives Committees on Petroleum to defend the budget proposed by the ministry for 2020.
The government, while admitting that the figures being presented did not reflect the actual volume of petrol consumed in Nigeria, also said there were no plans to remove the subsidy being paid on petrol.
Addressing journalists after the session, Sylva, while responding to a question on the impact of the border closure on the daily petrol consumption rate, said prevention of smuggling had led to reduction of the consumption figure.
He said, “Definitely, we are beginning to see the numbers reducing; from over 60 million litres, it has already come down – from the last account – to about 52 million litres per day. That means the figures are coming down. We are beginning to restore orderliness.
“We are trying to block other leakages and we believe that we can bring down the figure to about 40 million which will be more manageable by the government.”
The minister also admitted that reduction in the consumption rate should reflect in the amount budgeted for subsidy payment.
Speaking on the refineries, Sylva said, “Work on the Port Harcourt refinery will commence in January and study is also ongoing on Warri refinery and Kaduna refinery.”
Responding to a question on oil theft said to have caused the loss of an estimated N5tn revenue annually, the minister said it was a big problem that security agencies had been engaged to check.
“That is a big problem but it is not altogether a Ministry of Petroleum’s problem; it is more of a security problem. So, we are working with security agencies to ensure that we resolve the issues,” he said.
Earlier at the session, Sylva, while responding to questions by the lawmakers, pointed out that payment of subsidy was proposed in the 2020 Appropriation Bill as the Federal Government had no plans to end the scheme soon.
He, however, admitted that other African countries were benefiting from the payments through smuggled commodities.
The minister also said, “Nigeria is now almost subsidising half of Africa which is very difficult for us to do. So, you can see the government doing something about controlling some of these leakages and once those leakages are controlled, we believe that subsidy can be at least bearable, the cost of consumption.”
The minister also disclosed the factors preventing Anambra from being confirmed as an oil-producing state, saying, “I wish it was in my power to declare any state oil producing. The oil has to be produced; we have to see it; then the state becomes oil-producing. Nobody can deny any state of that status. If you are already producing, that you will know that you are producing oil and cannot hide it.”
The minister said the crude oil recently discovered in Bauchi State was of commercial quality.
He added, “I have announced here today to you that Bauchi is on its way (to becoming an oil-producing state), but Bauchi cannot also be counted as oil-producing yet. But we know that in a few years from now, Bauchi will definitely become an oil-producing state because what we have found there, the reserves are in commercial quantity.”