NNPC: Setting up filling stations in neighbouring countries won’t stop petrol smuggling
The Nigerian National Petroleum Corporation (NNPC) says setting up filling stations in neighbouring countries will not stop petrol smuggling.
Mele Kyari, group managing director of NNPC, said this on Wednesday, at the ongoing public hearing on 2022 to 2024 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), in Abuja.
The public hearing is organised by the house of representatives committee on finance.
Nigeria has seen a surge in the activities of oil smugglers in recent times, impacting the nation’s economy.
In June, NNPC had said smuggling across the borders increased the consumption of premium motor spirit (PMS) to 102 million litres per day.
Hameed Ali, comptroller-general of Nigeria Customs Service (NCS), had proposed to NNPC to establish petrol stations in neighbouring countries to curb smuggling.
This, he said, would “completely diminish the anxiety or the penchant for smuggling”.
When asked to comment on Ali’s suggestion, Kyari, who acknowledged the proposal, said NNPC is considering setting up filling stations in neighbouring countries but it won’t stop petrol smuggling.
“I have also seen the recommendation by my elder brother, the CG of customs that we should go and establish fuel stations across our borders to contain smuggling,” he said.
“The people who are smuggling are not looking for the official price for petroleum product, unfortunately. So when you go ahead across the countries and establish fuel stations, except you are going to sell it at 162, then everybody will come to you. So as long as you are going to sell it at the market price — It is the same reason that is bringing them here to smuggle.
“At the risk of being competitive, the people who take the product across the border will not sell at the official price because when you buy here at 162 at the official price, say in Niger is 400 — I don’t know what the price is — maybe N400 per litre, that is why you buy at the fuel station. So when you establish a fuel station, you must sell at 400. But when the smugglers…people hardly go to fuel station to buy fuel in Niger. So it is off the counter.
“As a matter of fact, we have thought of this, we are already engaging the national oil company of Niger, in particular, to establish NNPC retail fuel stations in the country but we are also cautious of the very fact that it can be bad business because you are going to compete with the people who are going to come… but it will be good business to do. Otherwise, we do not think that establishing a fuel station is the solution to containing smuggling.
“Are we considering doing this? Yes, as a business. Is that something that will stop smuggling? Absolutely not, because those smugglers are not looking for a fuel that you will sell.