ZAINAB JUNAID
Amidst economic hardship and inflationary pressures faced by Nigerian Citizens especially the lower income earners, due to upward adjustment in Premium Motor Spirit (PMS)prices which emanated from the fuel subsidy removal by the current administration in 2023, experts have revealed that price disparity from one country to another has been a major contributing factor to cross border petroleum diversion, which represents economic sabotage.
While fuel prices in Nigeria remain the cheapest compared to other countries in the West and Central African region as it is sold between the rate of N680 to N701.99 in Nigeria, Statistics shows that it is sold at an average of N1,672.05 in the Republic of Benin and N2,061.55 in Cameroon. The price of PMS ranges from N1,427.68 in Liberia to N2,128.20 in Mali, averaging N1,787.57.
This comparative price advantage, according to the Comptroller General of Nigeria Customs Service, Bashir Adewale Adeniyi, though is beneficial to Nigeria citizens, unfortunately creates a lucrative incentive for smuggling PMS out of Nigeria, where prices are two to three times higher.
A report on the average daily evacuation of PMS to various states in Nigeria, obtained from the Nigeria National Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has also backed this claim.
The NMDPRA report, CGC Adeniyi said 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 Nigeria neighbours.
“Between April and May 2024, Borno and Kebbi States recorded 76% and 59% 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% increases, respectively. Border states like Katsina and Kebbi also recorded more than 50% increases in evacuation.
“These discrepancies, along with the price disparity between domestic PMS (N 701.99) and neighbouring countries (N1,787.57), raise concerns about the actual delivery of PMS and the potential for smuggling. Moreover, credible intelligence on activities around border areas corroborates these suspicions,” Adeniyi said.
“Nigeria Customs Strengthens Synergy with ONSA, NMDPRA as Operation Whirlwind Intercepts 280,135 litres of PMS Valued at N196.5 Million in Two Weeks”
Recent seizures by Operation Whirlwind, a nationwide operation initiated by Nigeria Customs Service in collaboration with Office of the National Security Adviser (ONSA) on May 22, 2024 has also proven that smugglers are taking advantage of the price disparity to engage in illegal fuel exportation as the recent rise in the distribution of PMS to border states is driven by their activities.
Led by Comptroller H K Ejibunu, Project Coordinator of the tactical team, Operation Whirlwind intercepted 280,135 litres of PMS valued at N196,524,075.50 in just two weeks the team was created and this raises serious economic concerns with broader implications on National Security.
At a press conference held in Yola Adamawa State Capital, on Monday, 10 June 2024, on the significant stride made by Nigeria Customs Service Operation Whirlwind, CGC Adeniyi affirmed that the combine diversion of 280,135 litres of PMS valued at N196,524,075.50, is equivalent to more than 84% of the daily evacuation of PMS to states like Ekiti and Jigawa. “This also represents around 32.57% of the daily evacuation to the border states of Borno and Katsina according to the data on average daily evacuation obtained from NMDPRA. These activities, if left unchecked, could further deteriorate the country’s economic situation and exacerbate current foreign exchange challenges. 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 illicit operations,” CGC Adeniyi stated.
However, in a bid to curtail this illicit act, the CGC said rigorous efforts have been put in place to resolve existing gaps and also warned sternly all prospective Smugglers.
He equally explained that the nationwide operation Whirlwind aimed at ensuring Nigerians enjoy the full benefits of fuel price deregulation in line with the vision of President Bola Ahmed Tinubu; defends the National currency and reduces pressures that may be attributed to the activities of smugglers; identify, dismantle and disrupt cartels of smugglers operating within the ecosystem; raise awareness of the local communities and solicit their support to achieve these objectives.
“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; The NCS will enforce strict monitoring of tanker movements, ensuring that PMS products lifted from NMDPRA facilities are delivered to approved locations; Independent marketers are advised to automate their existing fleet management systems to enable tracking and geo-fencing capabilities; The NCS will collaborate with relevant licensing agencies to manage the proliferation of petrol stations around border areas,” the CGC said.
The Executive Director, Okoha Ogbugo of distribution systems, storage, and retailing infrastructure, NMDPRA, on his part stressed that cross border diversion of petroleum products represents economic sabotage and continues to put financial pressure on Nigeria National Petroleum Products Limited (NNPCL) which is the final supply of last resort as provided under the petroleum industry act 2021.
He thus joined the National Security Adviser and Nigeria Customs Service to read riot act on all the prospective smugglers saying “the Authority, will continue to work strongly and collaboratively with security agencies to deter fuel smuggling occurrence; NMDPRA will continue to sustain the legacy directive that retail outlets within a proscribed radius of the border will remain unlicensed. So anyone found close to border must be sealed and enforced against”.
