NNPC Ready For Fuel Supply, Subsidy Audit
The Nigerian National Petroleum Company Limited (NNPC Ltd) has offered to submit itself for a forensic audit of fuel supply and subsidy management, insisting that the daily fuel supply is 68 million litres.
Garba Muhammad, Group General Manager, Group Public Affairs Division, NNPC stated this in response to Hammed Ali, Comptroller-General, Nigeria Customs Service (NCS) who questioned the oil company’s daily supply.
Muhammad said between January and August 2022, the total volume of Premium Motor Spirit (PMS) imported into the country was 16.46 billion litres, which translated to an average supply of 68 million litres per day.
Similarly, he said that import in the year 2021 was 22.35 billion litres, and it translated to an average supply of 61 million litres per day.
“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).
“While daily evacuation (depot load outs) records of the NMDPRA do carry daily oscillation ranging from as low as four million litres to as high as 100 million litres per day,” he said.
He said that rising crude oil prices and PMS supply costs above PPPRA (now NMDPRA) cap had caused oil marketing companies’ withdrawal from PMS import since the fourth quarter of 2017.
In light of these challenges, he said that NNPC had remained the supplier of last resort and continued to transparently report the monthly PMS cost under-recoveries to the relevant authorities.
On cost, he said the average international market determined landing cost, in quarter two, 2022 was 1,283 dollars per Metric Tonnes and N46 per litre approved marketing and distribution cost.
“The combination of these cost elements translates to a retail pump price of N462/litre, an average subsidy of N297/litre and an annual estimate of N6.5 trillion on the assumption of 60 million litres daily PMS supply.
The NNPC promised to ensure compliance with the existing governance framework that requires the participation of relevant government agencies in all PMS discharge operations.
“The agencies include the Nigerian Ports Authority, NMDPRA, Nigerian Navy, Nigeria Customs Service, NIMASA and all others,” Muhammad said.
He acknowledged the possibilities of criminal activities in the PMS supply and distribution value chain but pledged that as a responsible business entity, NNPC would continue to work with relevant agencies to curtail the smuggling of PMS and contain other criminal activities.
He also pledged that the company would deliver on its mandate of ensuring energy security for the country, with integrity and transparency.
The Customs CG had last week flawed the figures for the daily consumption of Premium Motor Spirit (PMS), popularly known as petrol. According to Col. Ali, if the Nigerian National Petroleum Corporation puts daily consumption of PMS at 60 million litres, why does it allow 98 million litres to be lifted daily from the depots?
Ali who appeared before the House Committee on Finance for the hearing on the Medium Term Expenditure Framework (2023 – 2025) also dismissed claims that the smuggling of PMS contributes to the huge amounts being paid for subsidies“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.
Comments are closed.