N1,700 a litre smuggled Nigerian petrol floods WA markets

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Adewale Adeniyi

By Okechukwu Nnodim

The Federal Government of Nigeria has raised an alarm over renewed smuggling of Premium Motor Spirit, popularly known as petrol, following massive hikes in the pump prices of the commodity in neighbouring countries. While the average price of petrol in Nigeria is about N701 a litre, the average cost of the product in neighbouring countries is N1,787 per litre, a development that has heightened PMS smuggling out of Nigeria in the past two weeks.

The Comptroller-General of the Nigeria Customs Service, Adewale Adeniyi, who disclosed this at a press conference in Yola, said the NCS had to join forces with the Office of the National Security Adviser to tackle the menace. He said: “Today, we are here to update members of the public on the strategic efforts of the Nigeria Customs Service in addressing the critical issue of fuel smuggling through the recently launched Operation Whirlwind, under the auspices of the Office of the National Security Adviser. About a year ago, the Federal Government made the bold strategic decision to remove the fuel subsidy. This crucial step was aimed at freeing up substantial funds that could be redirected to other productive sectors of the economy, reducing pressure on our foreign exchange reserves, and diversifying economic growth. The immediate impact was an upward adjustment in fuel prices to reflect current realities. Despite the inflationary pressures and financial strain on households, particularly those with lower incomes, comparative studies still show that fuel prices in Nigeria remain the cheapest compared with other countries in the West and Central African region,” he stated.

Speaking further, Adeniyi said: “While PMS is sold at an average of N701.99 in Nigeria, it is sold at an average of N1,672.05 in the Republic of Benin and N2,061.55 in Cameroon. In other countries around the region, the price of PMS ranges from N1,427.68 in Liberia to N2,128.20 in Mali, averaging N1,787.57, according to the fuel price data obtained from Open Source.”

The Customs boss said this comparative price advantage, though beneficial to Nigerian citizens, unfortunately, created a lucrative incentive for smuggling PMS out of Nigeria, where prices were two to three times higher. He said this is substantiated by the report on the average daily evacuation of PMS to various states in Nigeria, obtained from the Nigeria National Midstream and Downstream Petroleum Regulatory Authority. In his speech, which was made available to our correspondent in Abuja, he said: “The (NMDPRA) report shows significant changes in evacuation patterns that are not justified by corresponding economic and demographic changes, particularly in border states that share contiguous borders with our neighbours. Between April and May 2024, Borno and Kebbi states recorded 76 and 59 per cent increases in evacuations, ranking among the top three states. On a year-on-year basis (May 2023 and May 2024), Sokoto and Taraba states recorded the most substantial increases in evacuations, with 247 and 234 per cent increases, respectively. “Border states like Katsina and Kebbi also recorded more than 50 per cent increases in evacuation. These discrepancies, along with the price disparity between domestic PMS at N701.99per litre and neighbouring countries at N1,787.57, raise concerns about the actual delivery of PMS and the potential for smuggling.”

Adeniyi said credible intelligence on activities around border areas corroborated these suspicions. “In response to the alarming increase in fuel smuggling, the NCS in close collaboration with the NSA, initiated Operation Whirlwind. This nationwide operation aims to ensure that Nigerians enjoy the full benefits of fuel price deregulation in line with the vision of President Bola Tinubu“. It also has to defend the national currency and reduce pressures that may be attributed to the activities of smugglers. It is to identify, dismantle and disrupt cartels of smugglers operating within the ecosystem and most importantly, raise awareness of the local communities and solicit their support to achieve these objectives,” he stated.

He said the operations, which were guided by credible intelligence and empowered by the new Customs Act 2023, will target illegal exportation, particularly of petroleum products, ensuring their availability within the country and conserving government resources. “Coordinated by a Comptroller of Customs, the operation covers all NCS Zones (A-D), involving selected officers trained and equipped to handle the task with strict adherence to professionalism. “Collaboration with the ONSA and the NMDPRA supports the operation, utilising internal and external sources. This operation was launched approximately two weeks ago,” Adeniyi stated. According to him, the NCS had made some significant strides in the ongoing Operation Whirlwind, aimed at curbing the smuggling of Premium Motor Spirit out of the country.

“In the past two weeks we have received credible intelligence on the relative stability of the price of PMS around border states, which is easily attributed to disruptions in the operations of smugglers. Within seven days of intensive operations, a total of 150,950 litres of PMS, valued at N 105,965,391, have been intercepted at various locations nationwide. On Friday, May 31, 2024, a total of 45,000 litres of PMS in a tanker was seized at Mova, Adamawa. On Saturday, June 1, 2024, a total of 45,000 litres of PMS in a tanker was seized at Mubi, Adamawa. On Monday, June 3, 2024, a total of 2,375 litres of PMS in 95 25-litre jerry cans were seized at Mubi, Adamawa State.

On Wednesday, June 5, 2024, a total of 4,450 litres of PMS in 178 25-litre jerry cans were seized in three different locations, including Song-Wuroboki, Mubi-Sahuda Road and Gidan Madara – Sahuda Road all in Adamawa. On Thursday, June 6, 2024, a total of 20,030 litres of PMS in 25 and 30- litre jerry cans were seized in various locations across the country including Maiha in Adamawa State, Illela in Sokoto State and Agbaragba Creek in Mfum border of Cross River State.  On Friday, June 7, 2024, a total of 32,900 litres of PMS were seized at border locations in the North-East and South-West axis of the country. A total of 17, 500 litres was recorded in Mubi, Adamawa State, while 15,400 litres was recorded around Imeko Obada Road in 616 25-litre jerry cans. On Saturday, June 8, 2024, a total of 8,525 litres of PMS were also seized in two separate locations in Owode (Owode-Ilaro road and Owode-Atan Road) in Ogun State.”

Adeniyi stated that in addition to the ongoing operations under Operation Whirlwind, the Customs Area Commands remained vigilant against the illicit activities of smugglers targeting PMS. He said the service had recorded significant seizures of PMS from unpatriotic individuals attempting to deprive Nigerians of access to fuel and cause unnecessary hardship. “While the operation continues, our Federal Operating Units and Marine Commands have intercepted a total of 129,185 litres of fuel valued at N90,558,685. Notably, 54.48 per cent of these seizures occurred in the North-West region, including such states as Katsina, Kebbi and Sokoto, while 23.87 per cent of the seizures were recorded in the North-Eastern part of the country, particularly in states like Taraba and Adamawa.

“It is worth of note that these states have also seen a significant increase in fuel evacuation as reported by the NMDPRA. It is now evident that the recent rise in the distribution of PMS to border states is driven by the activities of smugglers. “A combined diversion of 280,135 litres of PMS worth N196,524,075.50 raises serious economic concerns with broader implications on national security. The quantum of this diversion is equivalent to more than 84 per cent of the daily evacuation of PMS to states like Ekiti and Jigawa. It also represents around 32.57 per cent of the daily evacuation to the border states of Borno and Katsina according to the data on average daily evacuation obtained from NMDPRA,” Adeniyi said. He noted that if these activities were left unchecked, they could further deteriorate the country’s economic situation and exacerbate current foreign exchange challenges. The customs helmsman stated that the influx of unaccounted foreign currency could be channelled into funding illegitimate activities, including the support of non-state actors engaged in criminal activities against the Nigerian state.

“These issues have serious implications for national security, making it imperative to check, curtail, and dismantle these illicit operations. Achieving this requires the cooperation and collaboration of patriotic government agencies, exemplified by the ongoing Operation Whirlwind. Under this collaboration, efforts are being made to resolve existing gaps in the following areas: (i) Sharing of Critical Data Among Agencies. Ongoing engagement with the NMDPRA and the ONSA focuses on sharing daily data on PMS loading. This will enable the NCS to track the movement and delivery of these products to their intended locations. (ii) Monitoring movement of PMS lifting. The NCS will enforce strict monitoring of tanker movements, ensuring that PMS products lifted from NMDPRA facilities are delivered to approved locations. (iii) Use of Manual Systems by Independent Marketers. Independent marketers are advised to automate their existing fleet management systems to enable tracking and geo-fencing capabilities. (iv) On the proliferation of fuel stations at border areas the NCS will collaborate with relevant licensing agencies to manage the proliferation of petrol stations around border areas,” Adeniyi stated.

He said these measures were essential and would be rigorously implemented to ensure strict adherence to government expectations. “However, in enforcing these measures, we are mindful of the potential challenges they may pose to border communities. Our operations will not obstruct or interfere with the legitimate activities of patriotic citizens in these areas. I will conclude with a stern warning to the perpetrators of these illicit acts: Desist immediately or face the full wrath of the law,” Adeniyi declared.

On May 29 2023, the Federal Government removed the subsidy on petrol. Earlier in February that year,   the government declared that it had to shut down 270 filling stations in a bid to stop the smuggling of petrol out of Nigeria. It said the activities of smugglers pushed Nigeria’s petrol consumption daily to about 67 million litres because a large volume of the product was moved out of the country illegally by smugglers. The Punch newspaper of Nigeria precisely reported on  3 February 2023 that the  Federal Government had to deploy operatives of the Department of State Services on tankers transporting petrol to filling stations to halt the diversion and smuggling of the product. The report stated that over 120 DSS officers were deployed at the time to follow fuel tankers to their various retail outlets in Abuja, as more security agencies were drafted into the exercise for nationwide coverage.

This came as the government also revealed at the time that it shut down over 270 filling stations for being involved in diverse infractions such as hoarding and selling above-approved price, among others. The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, and the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, disclosed this in Abuja during a live television programme monitored by our correspondent. Speaking on efforts being put in place to halt the diversion and cross-border smuggling of PMS, Kyari had said: “So much is going on, there are government security interventions. I know the kind of work that we do with the security agencies, for instance, in Abuja alone, we have over 120 DSS officers following every truck to fuel stations and we are activating this across the country.

“We are ensuring that we get other government security agencies to follow these trucks to their locations, in order to be very sure that these trucks actually get to the fuel stations and they are not sold on the way and they don’t cross the borders.”

Kyari had earlier explained at a stakeholders meeting in Abuja that Nigeria’s fuel was smuggled to other countries, as he insisted that the scarcity of PMS at the time was not due to the elections that were held in February 2023. “There’s no dispute about this that our fuel gets to other countries, including in marine containers. We have evidence now that some of our customers are actually taking investors to other countries and we will get to the root of this. The appropriate government security agencies will deal with this. But this is the reality that we are dealing with. You do have cross-border smuggling, either in the form of round-tripping or whatever name we call it.

“So the 66 or 67 million litres that you have always seen include all these, the cross-border smuggling volumes. And it means that anytime we don’t satisfy those markets, it will affect our domestic market. This is the reality that we are dealing with,” he stated. The NMDPRA boss, while speaking on sanctions taken against downstream operators who flouted the approved regulations, stated that over 270 filling stations and seven depots were closed at the time. Ahmed said: “Because of control that we have in most of the major cities, whether it is Port Harcourt, Lagos, Ibadan, Abuja, etc, the marketers tend to go to the rural areas where you can buy petrol at a high price. And, of course, it is our responsibility as the regulator to ensure strict monitoring and enforcement. What we did was that a couple of weeks ago we had to shut about seven depots because of the inflation of their ex-depot price.”

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