Fact Check: Is NNPC’s claim that 25m litres of Nigerian petrol are smuggled out daily?
Maikanti Baru, group managing director of the Nigerian National Petroleum Corporation (NNPC), on a visit to the Comptroller General of the Nigerian Customs Service, Col. Hameed Ali (Rtd), in March this year, revealed that a detailed study the corporation conducted showed 25million litres of petrol is being smuggled out of Nigeria daily.
Based on this, the NNPC claimed N632.2billion in 2017 and 2018 as under recovery. Under recovery is difference between control price of petrol and actual cost. NNPC removes expenses before remitting proceeds of oil sales to the national treasury.
According to a release dated March 4, 2018, the NNPC wrote, “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 corporation claimed it arrived at this figure by extrapolating from storage capacity of filling stations springing up in border communities. It said that 16 states account for 2,201 registered fuel stations with 144, 998, 700 litres of petrol tank capacity.
Eight states with coastal border communities spread across 24 LGAs amongst the states account for 866 registered fuel outlets with combined petrol tank capacity of 73, 443, 086 litres, according to Baru.
Baru said the difference in petrol prices between Nigeria (N145 per litre) and neighbouring countries (N350 per litre) makes it lucrative for smugglers to use frontier stations to smuggle products across the border.
The NNPC is correct that smuggling of Nigerian petrol occurs at border communities. I visited the Sokoto-Niger border at Illela, and found an organised system of smuggling but the volumes the NNPC is ascribing to it is exaggerated.
“Fuel does not come every day,” said Mohammed, a young attendant at Nura Kure, a new filling station established earlier this year, “Sometimes we don’t get supply for weeks.”
The smuggling operation is largely rudimentary. Petrol is moved in carts; storage compartments built under trucks and modified fuel tanks of saloon cars.
“I have been carrying petrol across the border for a long time,” a motorcycle operator who gave his name as Hassan, said. “It is not difficult,” he assured. “I bribe the Customs and I move on.”
In the three days spent around illela, I estimated between 12,000 and 20,000 litres of petrol may be smuggled across the border.
Two carts lugging 20 pieces of 25-litre jerry cans move twice across the border a day could move 6,000 litres. Five trucks bearing 4 pieces of 25-litre jerry can in a built in compartment delivering supplies across the border over three days can deliver 1,500 litres. While seven saloon cars with a capacity to lift 80 litres making three rounds a day, within three days can deliver about 5,040 litres of fuel.
There is no evidence of petrol trucks moving huge volumes
Jerry Attah, spokesperson for the Nigerian Customs confirmed that proliferation of licensed filling stations at border communities is encouraging artisanal smuggling of petrol outside Nigeria.
“We can’t check everything on people or their houses but, no truck can be allowed to move petrol across the borders with fuel,” Attah said.
Indeed if that were to happen, it will question the very existence of the Nigerian Customs Service.
NNPC’s own data faults this claim. According to NNPC’s August operations and financial report, local petrol distribution is undertaken by 1,017 trucks daily. The entire month sees 31,538 trucking operations. To smuggle out 25million litres of outside Nigeria daily will require a large-scale operation involving over 750 trucks with 33,000 litre capacity which will create massive shortages in Nigeria.
“If that much trucks were diverted from NNPC’s operations, clearly Nigeria will feel the pinch,” Olumide Adeosun, PwC Nigeria’s head of energy research said by phone.
The only plausible conclusion is that the NNPC is exaggerating volumes of petrol smuggled out of Nigeria to explain away billions of naira it is claiming as under recoveries.