The Nigerian National Petroleum Corporation (NNPC) says a huge price difference in the pump price of petrol in Nigeria and neighbouring countries is fuelling the smuggling of petroleum products.
Group Managing Director of the NNPC, Mallam Mele Kyari, stated this in a presentation at an interactive session by the Joint Senate Committee on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), on Thursday.
The Senate Joint Committee session was chaired by Senator Solomon Adeola, with members drawn from the Senate Committees on Finance, National Planning, Foreign and Local Debts, Banking, Insurance, and other Financial Institutions, Petroleum Resources Upstream, Downstream Petroleum Sector and Gas.
In a statement released by the Group General Manager, Group Public Affairs Division, Garba Deen Muhammad, the NNPC boss said despite concerted efforts to combat the menace of smuggling of petroleum products, the corporation and some Federal agencies still find it difficult to tackle due to difference in prices.
He added that with a price difference of over N100 per litre in Nigeria and other countries, it was difficult to curb the activities of petrol smugglers.
Kyari stated that the corporation has made noticeable progress in combating the smuggling of petroleum products in the country.
The statement reads: “As long as there is arbitrage between the price that you sell and what is obtainable elsewhere, you can be sure that it is very difficult to contain the situation.
“The activities of smugglers have also made it difficult for the country to determine the actual consumption figures for petrol, noting that the Corporation can only know what was trucked out from loading depots across the country but cannot determine how much of that was consumed in-country.”
Speaking on the MTEF assumptions, Kyari stated that the corporation worked with the Ministry of Finance and other relevant stakeholders to arrive at the final conclusions.
It added: “On the MTEF assumptions, a base oil price scenario of $57 per barrel for 2022, $61 per barrel for 2023 and $62 per barrel for 2024 predicated on a base national production of 1.883 million barrels per day in 2022, 2.234 million barrels per day in 2023 and 2.218 million barrels per day in 2024.
“The assumptions were arrived at after consultations with the Ministry of Finance and other relevant stakeholders while also undertaking a careful appraisal of the three-year historical dated Brent Oil Price average of $59.07 per barrel premised on Platts Spot Prices among other considerations.
“Price growth was to be moderated by the lingering concerns over COVID-19, increased energy efficiency as well as obvious switching due to increased utilization of gas and alternatives for electricity generation.”
This article was originally published on Naija News