By Bassey Udo
The Nigerian National Petroleum Company (NNPC) Limited on Friday stoutly defended its position that country consumes an average of 68 million litres of premium motor spirit (PMS), popularly called petrol, daily.
Consequently, the management of the company said it was ready to surrender its books and records on the supply of petroleum products and subsidy management framework for public scrutiny by any agency interested in conducting a forensic audit to ascertain their transparency and accountability.
Apparently, the management of the company was reacting to reports credited to the Comptroller-General of Nigeria Customs Service (NCS), Hameed Ali that the volume of petrol being consumed in the country daily cannot be justified, to warrant the budget of over N6.34trillion as subsidy to be paid in the proposed 2023 fiscal appropriation.
Ali who spoke on Thursday in Abuja while appearing before the House of Representatives’ Committee on Finance at the continued hearing on the proposed 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, expressed doubts that the NNPC could scientifically justify its 98 million litres per day petrol consumption figure.
The Customs boss said he suspected the NNPC figure was in excess of 38 million litres of what should be the country’s real average daily petrol consumption.
Responding to a question on how the Federal Government would be able to finance the proposed N19.76trillion budget, which has an estimated deficit component of between N11.30trillion and N12.41trillion, Ali said it might be difficult for the government to provide for treasury-funded capital projects in 2023 due to dwindling revenues from oil exports and the expenditure of N6.34trillion on fuel subsidy payment by the NNPC.
The NCS boss faulted the NNPC’s claims on subsidy payment, saying despite the resolution last year that fuel subsidy would be removed from the petroleum products pricing template, he was surprised the issue resurfaced again this year.
“I remember last year we spoke about this (subsidy). Unfortunately, this year, we are talking about subsidy again. The over N11trillion we are going to take as debt, more than half is going for subsidy. The issue is not about smuggling of petroleum products. I have always argued this with NNPC.
“If we are consuming 60 million litres of PMS per day, by their (NNPC’s) own computation, why would you allow the release of 98 million litres per day? Scientifically, NNPC cannot tell me how it got to 60 million litre per day? That is my problem.
“If you release 98 million litres in actual and 60 million litres is used, the balance should be 38 million litres. How many trucks will carry 38 million litres every day? Which road are they following and where are they carrying this thing to?” the Customs Comptroller said.
But in statement by its spokesperson, Garba Deen Muhammad, the NNPC defended its figures on the country’s petrol consumption, saying its records between January and August 2022 showed an average daily consumption of 68 million litres out of about 16.46 billion litres of petrol imported into the country during the period.
Muhammad said the figure grew from an average supply of 61 million litres per day consumption figure out of about 22.35 billion litres of petrol imported into the country in 2021.
Between January and August 2022, the NNPC spokesperson said the downstream petroleum industry regulator, the Nigerian Midstream and Downstream Petoleum Regulatory Authority (NMDPRA), reported an average daily evacuation (Depot truck out) of about 67 million litres per day.
He said a review of the daily truck outs records of the NMDPRA revealed range from as low as 4 million litres to as high as 100 million litres per day.
As a result of rising crude oil prices at the international market and supply costs of petrol above NMDPRA cap, Muhammad said oil marketing companies (OMCs) were compelled to withdraw their participation in petrol importation programme since the fourth quarter of 2017, leaving the NNPC as the supplier of last resort.
To ensure transparency, he said the company has been filing monthly reports on petrol cost under-recoveries to the relevant authorities, which showed an average international market landing cost of $1,283 per metric ton and the approved marketing and distribution cost of N46 per litre in Q2 of 2022.
“The combination of these costs elements translates to retail pump price of N462 per litre and average subsidy of N297 per litre and annual estimate of N6.5 trillion on the assumption of 60 million lires daily PMS supply,” the NNPC said in its statement published on Saturday on its verified twitter handle, @nnpclimited.
“This 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, NMDPRA, Nigerian Navy, Nigeria Customs, 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 entity, 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 supply and subsidy management framework of the NNPC,” the company added.