FG saves $1.7bn from managed interventions for petrol importation

FG saves $1.7bn from managed interventions for petrol importation
NNPC’s Tower

The Nigerian National Petroleum Corporation (NNPC), yesterday, defended its role in the importation of Premium Motor Spirit, otherwise known as petrol, noting that its intervention has helped to check false claims for subsidy arising from smuggling of the product to neighbouring countries as well as demand for foreign exchange.

According to the NNPC, activities of smugglers raised demand for the commodity to 97 million litres daily, and costing the economy billions of naira daily.

Besides, the Corporation denied claims that marketers were unable to access foreign exchange from the Central Bank of Nigeria (CBN), noting that the forex intervention scheme, which was rolled out by CBN, and co- managed by the NNPC, has received applications from marketers for $7.2billion, while 50 percent disbursements were recorded.

The NNPC added that it was able to save $1.7billion from the whole exercise, while applications that came in for automotive gas oil (AGO), household kerosene (HHK), and aviation turbine kerosene (ATK) also got forex at N305/$1.

Furthermore, the NNPC said the Petroleum Products Marketing Company (PPMC), after several years of recording losses, achieved a profit of N9 billion for the first quarter (Q1) of 2019, according to its unaudited reports.

NNPC’s Chief Operating Officer, Downstream, Henry Obih, during a panel discussion on, “Harnessing the opportunities to draw Nigeria closer to energy security”, at the ongoing Nigeria Oil and Gas (NOG) Conference, in Abuja, explained that smuggling of petrol from Nigeria to neighbouring countries is because the product was cheaper in Nigeria than in many other West African nation.

Obih said, “This is because of the level of arbitrage in price. For instance, in the Niger Republic, you are able to sell a litre of petrol for N427, while we (Nigeria) are selling at N145/litre, and if is taken from the dealer, it is N133.28/litre. So, the arbitrage is huge.

‘So, if you check the difference in pricing between Nigeria at N145/litre and the rest of those markets, there are more incentives for a person looking for opportunities to engage in smuggling activities.
“However, there is a combined effort from all the security agencies to tackle these issues. Based on our numbers, we are averaging 54.2 litres of PMS every day, and that is a significant reduction in terms of evacuation and not consumption. That is a much lower number than when it was 97million litres a day,” he added.

On his part, the Chief Operating Officer, Refineries, Anibor Kragha, explained that efforts were ongoing to revive the refineries, adding that the assets were old and needed funding to make them efficient.

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