Scarcity and cross-border smuggling of petroleum products

Recently, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC); Dr Maikanti Baru raised the alarm that smugglers were using land and coastal border areas to smuggle petroleum products. He then attributed the intractable scarcity of petrol to large scale smuggling of the essential commodity to neighbouring countries.

He said this when he paid a visit to his counterpart in the Nigeria Customs Service; Col Hameed Ali (rtd), even as he sought for collaboration with the Customs.

Some of the things that the NNPC boss revealed were quite shocking and an eye opener to why petrol remains scarce in most part of the country.

He stated that pump price of petrol in Nigeria is still the lowest among its neighbours, a factor which makes smuggling to these countries profitable to the marketers.

While petrol sells for N145 per litre in Nigeria, it goes for N311 in Ghana, in Togo, it is  N308, while in Benin Republic, it sell for  N292.8, Niger it is N367, Chad, 326.35, and Cameroon at N400 per litre. This price differential is enough incentive for smuggling.

Speaking further, the NNPC boss added that: “There has been a heightened consumption growth from less than 30 million litres per day in August 2017, to an average of over N50 million litres per day with a peak of 84.2 million litres on December 8, 2017.

While it is plausible that cross border smuggling is responsible for the perennial scarcity that is being experienced in Nigeria, it is also possible that hoarding is partly responsible. 

Out of the six countries identified by Baru as destinations for petrol smuggled from Nigeria, four actually shares direct borders with Nigeria. While Benin Republic is to the South West, Niger and Chad are to the North East, and Cameroun is to the South South.

The result of the study that was said to have been conducted by the NNPC is shocking.  In the report, 16 states, having 61 local government areas at the border communities, account for 2,201 registered fuel stations. Their combined fuel tank capacity is  144, 998, 700 litres of petrol.

 Also, eight states with coastal border communities spread across 24 local government areas account for 866 registered fuel outlets, with combined petrol tank capacity of 73, 443, 086 litres.

A further breakdown of the findings shows that among the states with land borders, three local government areas in Ogun State account for 633 fuel stations with combined petrol tankage of 40, 485,000 litres while nine local councils in Borno State have 337 fuel outlets with combined petrol storage capacity of 21, 114, 480 litres. Lagos State with one local government at the border community has 235 registered fuel stations with total petrol storage facility of 19,916, 600 litres.

On the coastal front, Lagos with six local government areas leads with 487 registered fuel stations with combined in-built storage capacity of 50,239,560 litres, Akwa Ibom with five councils has 134 registered retail outlets with capacity to store 8, 322,986 litres, while Ondo State with two councils has 110 fuel stations with capacity to store 3,871,320 litres.

If the storage capacities of the fuel stations at border state and communities  are juxtaposed with the huge pump price differential between Nigeria and her neighbours , then it is clear that it is ‘more profitable’ to sell petrol meant for Nigerians in neighbouring town and communities. 

While this newspaper is not in possession of details of trans-border smuggling in the North, there have been several of such cases in towns and villages close to the borders in Ogun state.

The communities in Yewa South, Yewa North, Imeko Afon and Ipokia, all in Ogun State are hotbeds for nefarious crimes.

In the coastal borders as well, there have been several reported cases of smuggling of petrol, especially in Akwa Ibom and Cross Rivers states.

The onus of checking smuggling generally falls on the Nigeria Customs Service. We are aware that the Customs has two dedicated commands; namely Western Marine Command and Eastern Marine Command. Checking trans-border smuggling of petrol falls squarely on the shoulders of these two commands. Sadly, they don’t have patrol boats!

Some have advocated deregulation and removal of subsidy to check smuggling of petrol, but we see it differently. No matter what the pump price is in Nigeria, it will still be lower than what obtains in those countries that have been identified as destination for petrol meant for Nigerian markets.