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Market Digest Nigeria


NNPC retail stations won’t stop smuggling – Kyari


Why NNPC Retail Stations In Neighbouring Countries Won’t Stop Smuggling — Kyari

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said that establishing retail stations in neighbouring countries will not stop the challenge of illegal haulage of petroleum products across the border.

Kyari said this on Wednesday while providing detailed explanations to some issues to members of the House of Representatives Committee on Finance at an interactive session on the 2022-2024 Medium Term Expenditure and Revenue Framework (MTERF) and Fiscal Strategy Paper (FSP).

Kyari said though the NNPC once considered the option of establishing retail stations in neighbouring countries to curb smuggling of petroleum products, the corporation had to jettison the idea when it became imperative that the measure would be counterproductive.

The NNPC boss explained that people who are smuggling are not looking for officially priced petroleum products.

He further noted that going ahead to establish NNPC retail stations would not yield the desired result since the people who take products across the border are not interested in selling at the official prevailing prices at approved stations but are interested in under the counter deals.

On the claim that 103 million litres per day evacuation was recorded in the country in the month of May, Kyari said he had ordered investigation.

He reacted to a question by the committee to the report that the country recorded 103 million litres per day fuel consumption in the month of May.

He said: “If there is any date that we evacuated or consumed up to 103 million litres per day, I have never. Actually, I flagged this when I see the figure. Evacuation is not consumption, but it is very very abnormal. Even the average for that month comes back to 62. So, I found it very very strange,” he said.

On the perennial issue of smuggling of petroleum products, Kyari implored the National Assembly to come to the aid of the corporation in battling the menace, noting that the corporation, based on the directive of President Buhari had mobilised some federal agencies like the Nigeria Customs Service, the Economic and Financial Crimes Commission (EFCC), the Police, Civil Defence Corps and others, to find workable solutions to the menace.

Meanwhile, the NNPC boss provided a base oil price scenario in the medium term of $57 per barrel for 2022, $61 per barrel for 2023 and $62 per barrel for 2023.

Kyari explained that the assumptions were arrived at after a careful appraisal of the three-year historical dated Brent Oil Price average of $59.07 per barrel premised on Platts Spot Prices.

“Price growth is to be moderated by the lingering concerns over COVID-19, increased energy efficiency, switching due to increased utilization of gas and alternatives for electricity generation. These are reflected in the Medium Term Revenue Framework’’ Kyari said.

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