Baru – This is about pricing not petrol stations at the border
Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Maikanti Baru said on March 4 that the proliferation of fuel stations in communities with international land and coastal borders across the country was facilitating the smuggling of the product across the border into neighbouring countries.
He was speaking to the Comptroller General of the Nigerian Customs Service, Hameed Ali apparently in a bid to get to get his men to intensify patrol at the border. Baru said that a detailed study conducted by NNPC indicated strong correlation between the presence of the border stations and the activities of petrol smuggling syndicates.
Giving a breakdown of the situation at the border to Hameed Ali, a man who should know, Baru said that 16 states with about 61 Local Government Areas with border communities, account for 2,201 registered fuel stations located close to the border. He also disclosed that these states had a combined petrol tank capacity of approximately 145 million litres, which is more than four times the country’s average daily fuel consumption.
He said that there were another eight states with coastal border communities spread across 24 local government areas that have 866 registered fuel outlets with combined petrol tank capacity of 73 million litres.
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 border stations as a platform to smuggle petroleum products across the border. This he said 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.
Baru in a statement issued on Sunday 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. The impact, he said, is that the country now incurs fuel subsidy cost of about N774 million every day.
Nigeria, as BusinessDay has reported several times is subsidising a good part of West African with its cheap fuel policy. The country is bleeding at the expense of its neighbours simply because of a bad petrol pricing policy that we have insisted we will sustain despite the fact that it makes no economic sense.
Sadly, we are borrowing to make a few businessmen rich in a bid to sustain this senseless policy that suits the political ego of the Presidency. It is not clear what Baru wants the Customs Boss to do with information about petrol stations at the border.
It is not a crime to have a petrol station at the border towns. As long as we insist on selling cheap fuel well below the comparative prices in the neighbouring countries, smuggling will thrive no matter the number of stations closed down at the border. The issue is the pricing not the fact that petrol stations are located at the border towns.