Connect with us

Economy

Fuel Subsidy Gulps N774m Daily Due to Smuggling—NNPC

Published

on

fuel subsidy

By Dipo Olowookere

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Maikanti Baru, has raised an alarm over the huge amount of debt the agency incurs daily as payment for subsidy for Premium Motor Spirit (PMS) otherwise known as petrol.

He said on a daily basis, the state-owned firm incurs an under-recovery of N774 million in order to allow citizens of Nigeria buy petrol at the regulated rate of N145 per litre.

Mr Baru explained that the huge amount paid is as a result of the product being smuggled from Nigeria to other neighbouring countries like Benin Republic, Niger Republic, Ghana, Cameroon and others, where fuel is sold higher than N145 per litre.

According to him, the smuggling the commodity to these countries was made possible with the proliferation of fuel stations in communities with international land and coastal borders across the country, making it difficult to sanitize the fuel supply and distribution matrix in the country.

Leading a top management team of the corporation on a visit to the Comptroller General of the Nigerian Customs Service (NCS), Mr Hameed Ali, the GMD said he got his information from detailed study conducted by NNPC.

He said that the activities of the smugglers had led to recent observed abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 million litres per day which is in sharp contrast with established national consumption pattern.

Providing a detailed presentation of the findings, the NNPC GMD informed that 16 states, having amongst them 61 Local Government Areas with border communities, account for 2,201 registered fuel stations.

The fuel tank, he noted, had a combined capacity of 144 million litres of petrol, while eight states with coastal border communities spread across 24 LGAs amongst the states account for 866 registered fuel outlets with combined petrol tank capacity of 73.4 million litres.

A further breakdown of the finding shows that among the states with land border, three LGA’s in Ogun State account for 633 fuel stations with combined petrol tankage of 40.5 million litres while nine LGA’s in Borno State have 337 fuel outlets with combined petrol storage capacity of 21 million litres.

He said also that with one LG as border community has 235 registered fuel stations with total petrol storage facility of 19.9 million litres, while on the coastal front, Lagos with six LGA’s leads with 487 registered fuel stations with combined in-built storage capacity of 50.2 million litres.

Akwa Ibom with five LGA’s has 134 registered retail outlets with capacity to store 8.3 million litres, while Ondo State with two LGA’s has 110 fuel stations with capacity to store 3.9 million litres.

Mr Baru explained that because of the obvious differential in petrol price between Nigeria and other neighbouring countries, it had become lucrative for the smugglers to use the frontier stations as a veritable conduit for the smuggling of products across the border, saying this had resulted in a thriving market for Nigerian petrol in all the neighbouring countries of Niger Republic, Benin Republic, Cameroun, Chad and Togo and even Ghana which has no direct borders with Nigeria.

“NNPC is concerned that continued cross-border smuggling of petrol will deny Nigerians the benefit of the Federal Government’s benevolence of keeping a fix retail price of N145 per litre despite the increase in PMS open market price above N171 per litre,” he said.

Welcoming the NNPC GMD and his team to the Customs headquarters, Mr Ali said the NCS would work with the corporation to stem the tide of cross-border smuggling of petroleum products, noting that all hands must be on deck to ensure the economic survival of the country.

The Customs boss thanked NNPC GMD for the elaborate data he provided on the fuel supply situation, noting that this would enable the service fashion out the appropriate architecture to combat the menace.

He called on the authorities to tackle the issue of price differentials which is the underlying motivation for smuggling activities.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

Continue Reading
Click to comment

Leave a Reply

Economy

FG to Announce New Date for Postponed FAAC Meeting for May 2022

Published

on

FAAC meeting allocation

By Aduragbemi Omiyale

The federal government has said it would announce a new date for the Federation Account Allocation Committee (FAAC) meeting for this month, which was shelved in a circular on Wednesday.

On Wednesday, the Ministry of Finance, Budget and National Planning released a statement to announce the postponement of the FAAC Meeting for May 2022 over certain circumstances connected with the arrest of the Accountant General of the Federation (AGF), Mr Ahmed Idris.

Mr Idris, who is a key member of the FAAC team, is cooling off in the custody of the agency over an alleged N80 billion fraud. He is helping the EFCC in its investigation into the issue.

As a result of his arrest and suspension from office by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, the meeting for this month was shelved.

In the circular signed by the Director of Home Finance at the Ministry, Mr Stephen Okon, the federal government assured that “the new date for the meetings will be forwarded to you in due course.”

The gathering, which is held to share revenue generated by the country in the previous month to the three tiers of government; federal, states and local governments, was earlier slated to take place this month on Wednesday, May 18 and Thursday, May 19, 2022.

But Mr Okon stated in the notice that, “I am directed to inform you that the Federation Account Allocation Committee (FAAC) meetings earlier scheduled to hold virtually on the 18th and 19th May 2022 have been postponed due to certain circumstances.”

Continue Reading

Economy

Bulls Return to Unlisted Securities Market on 0.21% Growth

Published

on

Unlisted Securities Market

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange welcomed the bulls back into its fold on Thursday following a 0.21 per cent growth at the close of business.

The bulls were at the unlisted securities market yesterday at the invitation of Niger Delta Exploration and Production (NDEP) and Food Concepts Plc, which recorded price appreciations during the session.

NDEP Plc gained N10 or 4.6 per cent to close at N220.00 per share as against the N210.00 it closed at the last session, while Food Concepts Plc appreciated by 6 kobo or 6.5 per cent to close at 93 kobo per unit compared with 87 kobo per unit of the previous session.

The gains reported by the duo expanded the NASD unlisted securities index (NSI) by 1.66 points to 808.79 points from 807.12 points and equally increased the market capitalisation by N2.17 billion to N1.06 trillion from N1.05 billion.

At the market yesterday, the trading volume rose by 17,545.7 per cent as a total of 20.0 million units of shares exchanged hands compared with the 113,500 units of shares transacted on Wednesday.

In the same vein, the trading value rose by 749.3 per cent to N24.4 million from the previous day’s N2.9 million, while the number of trades went down by 28.6 per cent to five deals from seven deals.

AG Mortgage Bank Plc remained the most traded stock by volume on a year-to-date basis with 2.3 billion units valued at N1.2 billion, Central Securities Clearing System (CSCS) Plc stood in second place with 661.7 million units worth N13.9 billion, while Food Concepts Plc was in third place with 134.0 million units valued at N114.9 million.

In the same vein, CSCS Plc ended the session as the most active stock by value on a year-to-date basis with 661.7 million units worth N13.9 billion, VFD Group was in second place with 9.4 million units valued at N2.9 billion, while AG Mortgage Bank Plc in third place has transacted 2.3 billion units valued at N1.2 billion.

Continue Reading

Economy

Naira Drops 0.34% at P2P, 0.26% at Investors’ FX Segment

Published

on

FX Market Segments

By Adedapo Adesanya

The Naira depreciated against the Dollar at the Peer-to-Peer (P2P) segment of the foreign exchange (FX) market on Thursday by 0.34 per cent or N2 to trade at N615/$1 compared with the previous day’s N613/$1.

Also, at the Investors and Exporters (I&E) window, the Nigerian currency depreciated against the greenback yesterday by 0.26 per cent or N1.08 as it traded at N420.33/$1 in contrast to Wednesday’s closing value of N419.25/$1.

It was the second consecutive trading day that the local currency is coming under pressure amid disruption in the supply of forex to the market by the Central Bank of Nigeria (CBN).

The demand for FX is relatively high at the moment because politicians are trying to get foreign currencies to woo delegates to their sides to obtain tickets to contest in the 2023 general elections.

Data from the FMDQ Securities Exchange indicated that at the investors’ FX segment yesterday, transactions worth $75.56 million were executed, 62.47 per cent or $125.78 million lower than the $201.34 million achieved a day earlier.

However, at the interbank segment of the FX market, the domestic currency closed stronger against the Pound Sterling by 38 kobo to trade at N516.49/£1 versus N516.87/£1 and against the Euro, it gained 37 kobo to sell at N437.48/€1 versus the preceding session’s N437.11/€1.

At the cryptocurrency market, nine of the 10 tokens monitored by Business Post recovered, with the crisis-hit coin, TerraUSD (UST), further losing 21.4 per cent to quote at $0.07479.

Ripple (XRP) rose by 7.2 per cent to $0.432, Litecoin (LTC) gained 4.8 per cent to trade at $69.99, Cardano (ADA) appreciated by 4.6 per cent to sell at $0.5304, Binance Coin (BNB) grew by 4.2 per cent to trade at $307.16, while Ethereum (ETH) went up by 3.7 per cent to $2,017.41.

In addition, Bitcoin (BTC) jumped by 3.6 per cent to $30,086.44, Dogecoin (DOGE) moved higher by 2.6 per cent to trade at $0.0862, Solana (SOL) recorded a 1.5 per cent appreciation to sell at $51.09, while the United States Dollar Tether (USDT) gained 0.01 per cent to settle at $0.9989.

Continue Reading

Latest News on Business Post

Like Our Facebook Page

%d bloggers like this: