With 5 million naira you can smuggle oil trucks out of Nigeria, official tells Reps
An official from NNPC Limited revealed that with just 5 million naira, anyone can smuggle trucks of petroleum products out of Nigeria.
NNPC Limited Chief Financial Officer Umar Ajia revealed this on Monday during his appearance before the House of Representatives committee investigating fuel subsidies in Nigeria.
Mr. Ajia, who represented the CEO of NNPC Limited, Mele Kyari, said some West and Central African countries have stopped importing petroleum products and rely solely on contraband products from Nigeria.
He specifically said that countries like Cameroon and Benin Republic have stopped importing fuel and are completely dependent on contraband goods from Nigeria due to the porous border.
“If you have 5 million naira you can cross borders with trucks loaded with PMS – it’s the bitter truth – we have porous borders. Yes we have customs but I don’t know.
“PMS goes everywhere, from Cameroon to the North-East, the Nigerian PMS arrives in Mali. Our neighboring countries import few PMS. In fact, some of them don't have the coverage to support imports.
"The refinery in Cameroon was burnt down about last year, since then they haven't imported PMS but they still use PMS; if you go to Niger you find that PMS is sold in bottles .
"For them it's a cheaper source, why waste their currencies, so we subsidize our neighbors, that's the simple truth," he said.
Mr. Ajia blamed the arbitration that exists due to the smuggling subsidy in Nigeria. He noted that the Nigerian government spends 209 naira for every liter as a subsidy.
He reiterated that NNPC limited and other government agencies have no idea of the exact daily consumption of PMS in Nigeria. According to him, the daily consumption of 66.7 million is based on the truck leaving the depot.
"The highest consuming states are states like Oyo and Ogun State, they even consume more than Lagos State. So you wonder, do they have more vehicles than Lagos? That explains that they are states with porous borders and that will explain why this mass evacuation is being done from Oyo and Ogun states, probably neighboring countries,” he said.
“Foreign exchange component”Mr. Ajia revealed that apart from price differences, there is also the foreign exchange component of the subsidy scheme.
The federal government is currently proposing to spend around N3.5 trillion on oil subsidies in the two quarters of 2023.
Mr. Ajia also revealed that NNPC Limited is taking measures to prevent the permanent shortage of fuel during the Christmas and New Year season.
He said the board of NNPC Limited should extend the direct selling and direct buying agreement with traders to avoid the shortage.
According to Mr. Ajia, the country expects 1.6 billion liters of PMS to ensure that there is an average of 2 billion liters per month at the close of stocks.
“The Direct Selling Direct Purchase (DSDP) contract actually ended in August, and this is a very dangerous time to start re-launching the tender as we are facing the winter. These are the difficult "ember months" that we normally avoid when we run out of fuel.
"You know that the shortage in Nigeria is really associated with the Christmas period, so if you make a bid, the bidding process will take a month or two. So what the board approved is to extend the contract for six months so that we get through the winter and we get through the elections, otherwise we may have problems during the elections,” he said. p> Perplexed
Meanwhile, committee chairman Aliyu Ibrahim (APC, Sokoto) was perplexed by the revelation from NNPC Limited.
He said the existing framework on PMS could sink the country.
"In the Republic of Niger it is sold for N536, in Mali, N577, in neighboring Benin, N389, in Ghana N589 and Togo N470, in Chad it is N362, Cameroon N423 while the cost of landing in Nigeria is N462 and we subsidize it at N165.
"Don't you think we deliberately chose to sink the country?" he asked.
Mr. Ibrahim therefore ordered Duke Oil and other subsidiaries of NNPC Limited to appear before the committee on Thursday.
Afterwards, the committee decided to participate in an executive meeting with Mr. Ajia and his team.
It is unclear, however, why the committee met in executive session since the hearing is not security related.
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An official from NNPC Limited revealed that with just 5 million naira, anyone can smuggle trucks of petroleum products out of Nigeria.
NNPC Limited Chief Financial Officer Umar Ajia revealed this on Monday during his appearance before the House of Representatives committee investigating fuel subsidies in Nigeria.
Mr. Ajia, who represented the CEO of NNPC Limited, Mele Kyari, said some West and Central African countries have stopped importing petroleum products and rely solely on contraband products from Nigeria.
He specifically said that countries like Cameroon and Benin Republic have stopped importing fuel and are completely dependent on contraband goods from Nigeria due to the porous border.
“If you have 5 million naira you can cross borders with trucks loaded with PMS – it’s the bitter truth – we have porous borders. Yes we have customs but I don’t know.
“PMS goes everywhere, from Cameroon to the North-East, the Nigerian PMS arrives in Mali. Our neighboring countries import few PMS. In fact, some of them don't have the coverage to support imports.
"The refinery in Cameroon was burnt down about last year, since then they haven't imported PMS but they still use PMS; if you go to Niger you find that PMS is sold in bottles .
"For them it's a cheaper source, why waste their currencies, so we subsidize our neighbors, that's the simple truth," he said.
Mr. Ajia blamed the arbitration that exists due to the smuggling subsidy in Nigeria. He noted that the Nigerian government spends 209 naira for every liter as a subsidy.
He reiterated that NNPC limited and other government agencies have no idea of the exact daily consumption of PMS in Nigeria. According to him, the daily consumption of 66.7 million is based on the truck leaving the depot.
"The highest consuming states are states like Oyo and Ogun State, they even consume more than Lagos State. So you wonder, do they have more vehicles than Lagos? That explains that they are states with porous borders and that will explain why this mass evacuation is being done from Oyo and Ogun states, probably neighboring countries,” he said.
“Foreign exchange component”Mr. Ajia revealed that apart from price differences, there is also the foreign exchange component of the subsidy scheme.
The federal government is currently proposing to spend around N3.5 trillion on oil subsidies in the two quarters of 2023.
Mr. Ajia also revealed that NNPC Limited is taking measures to prevent the permanent shortage of fuel during the Christmas and New Year season.
He said the board of NNPC Limited should extend the direct selling and direct buying agreement with traders to avoid the shortage.
According to Mr. Ajia, the country expects 1.6 billion liters of PMS to ensure that there is an average of 2 billion liters per month at the close of stocks.
“The Direct Selling Direct Purchase (DSDP) contract actually ended in August, and this is a very dangerous time to start re-launching the tender as we are facing the winter. These are the difficult "ember months" that we normally avoid when we run out of fuel.
"You know that the shortage in Nigeria is really associated with the Christmas period, so if you make a bid, the bidding process will take a month or two. So what the board approved is to extend the contract for six months so that we get through the winter and we get through the elections, otherwise we may have problems during the elections,” he said. p> Perplexed
Meanwhile, committee chairman Aliyu Ibrahim (APC, Sokoto) was perplexed by the revelation from NNPC Limited.
He said the existing framework on PMS could sink the country.
"In the Republic of Niger it is sold for N536, in Mali, N577, in neighboring Benin, N389, in Ghana N589 and Togo N470, in Chad it is N362, Cameroon N423 while the cost of landing in Nigeria is N462 and we subsidize it at N165.
"Don't you think we deliberately chose to sink the country?" he asked.
Mr. Ibrahim therefore ordered Duke Oil and other subsidiaries of NNPC Limited to appear before the committee on Thursday.
Afterwards, the committee decided to participate in an executive meeting with Mr. Ajia and his team.
It is unclear, however, why the committee met in executive session since the hearing is not security related.
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