NNPC, Customs DG disagree on 98m litres per day PMS consumption
…As NNPC says 68m litres is average daily PMS supply
By Ariemu Ogaga and Uthman Salami
Contrary to the recent revelation by the Director General of the Nigeria Customs Col. Hameed Ali, who had earlier questioned why the company would be allowing 98 million litres of Premium Motor Spirit (PMS), otherwise known as Petrol, to be lifted when the actual consumption figure is 60 million litres, the Nigerian National Petroleum Company limited said the average daily PMS supply remained 68 million litres from January to August 2022. In a press release signed by the Group General Manager, Group Public Affairs Division, NNPC LTD. Garba Deen, which was obtained by the Nigerian NewsDirect yesterday, said the total volume of Petrol imported into the country was 16.46 billion litres, an average supply of 68 million litres per day in the first eight months of the year 2022.
This was a little lower compared to what the company had imported in the year 2021, which stood at 22.35 billion litres, an average supply of 61 million litres per day.
Recall that the Customs Director General Col. Hameed Ali had alleged the company was allowing the lifting of Petrol more than what the country consumes.
The DG said this when he appeared before the House Committee on Finance for the hearing on the Medium Term Expenditure Framework (2023 – 2025).
He dismissed claims that smuggling of PMS contributes to the huge amounts being paid for subsidy.
He said “The issue is not the smuggling of petroleum,” Col Ali said, “I have always argued this with NNPC. If we are consuming 60 million litres of petrol per day by their own computation, why in the world would you allow the lifting of 98 million litres per day?
“That computation, to me, is not believable, because scientifically you cannot tell me that if I fill my tank today, tomorrow I will fill my tank with the same quantity of fuel. And if I’m running a petrol station today, if I go to Minna depot and lift, and I’m taking to Kaduna, I may reach Kaduna in the evening and offload that product; there’s no way I could have sold that petrol for you to account that that has been expended.
“So how do we get to 60 million every day? If you say this petrol is smuggled, if you release 98 million litres, and then we use 60 million litres, the balance will be 38 million litres.
“How many trucks will carry 38 million litres? Every day. That’s almost 500. Which road are they following? Where are they carrying this thing to?”
However, in a press release issued yesterday, NNPC Ltd noted that, contrary to Col. Ali’s claims, “The average daily evacuation (Depot truck out) from January to August 2022 stands at 67 million litres per day as reported by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).”
“Daily Evacuation (Depot load outs) records of the NMDPRA do carry daily oscillation ranging from as low as 4 million litres to as high as 100 million litres per day,” the statement added.
Owing to rising crude oil prices and PMS supply costs above PPPRA (now NMDPRA), oil marketing companies’ (OMCs) had withdrawn from PMS import since the fourth quarter of 2017, leaving the NNPC LTD. the supplier of the product.
The statement partly read, “NNPC Limited also noted the average Q2, 2022 international market determined landing cost was US$1, 283/MT and the approved marketing and distribution cost of N46/litre.
“The combination of these cost elements translates to retail pump price of N462/litre and an average subsidy of N297/litre and an annual estimate of N6.5 trillion on the assumption of 60 million litres daily PMS supply. This cost will continuously be adjusted by market and demand realities.
“NNPC Ltd shall continue to ensure compliance with existing governance framework that requires participation of relevant government agencies in all PMS discharge operations, including Nigerian Ports Authority, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigerian Custom Service, NIMASA and all others.
“NNPC Ltd recognizes the impact of maritime and cross border smuggling of PMS on the overall supply framework, NNPC also acknowledges the possibilities of other criminal activities in the PMS supply and distribution value chain.
“As a responsible business entry, NNPC will continue to engage and work with relevant agencies of the Government to curtail smuggling of PMS and contain any other criminal activities.
“We will continue to deliver on our mandate to ensure energy security for our country with integrity and transparency. We invite any forensic audit of the PMS and subsidy management framework of the NNPC.”
Reacting to the development on Sunday, an oil and gas expert and Managing Partner, BBH Consulting, Barr. Ameh Madaki said the controversy surrounding Premium Motor Spirit (PMS) consumption figures will not go away in a hurry.
He said, “The opaqueness surrounding the issue of subsidy will not go away in a hurry. Since subsidy claims are based on consumption figures, it will always be beneficial to the subsidy cabal to inflate the figures of PMS consumption and this is expected to continue into the foreseeable future.
“The logic behind the analysis by the CG of Customs is clear: where are the trucks to load that quantity of PMS on a daily basis, and the roads where those trucks ply, given the abysmal state of our roads?
“Until NNPC addresses these issues, their push back will not carry any weight at all.
“It is not rocket science to ascertain the quantity of products consumed in Nigeria, and there is readily available technology that can be used to do this, if we are serious about getting it done.”
