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Buhari directs NNPC to cut PMS daily consumption as oil theft persists

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AMID concerns on rising petrol consumption and subsidy payment by the Federal Government, President Muhammadu Buhari has directed the Nigerian National Petroleum Corporation (NNPC) to work with the Economic and Financial Crimes Commission (EFCC) and other cross-border monitoring security outfits to curb the menace of cross-border petrol smuggling.

Group Managing director of NNPC Mele Kyari confirmed the presidential directive on Wednesday, in a statement, expressing concern that the spiralling subsidy payment was directly proportional to rising litres of premium motor spirit (PMS) and had negatively affected the corporation’s remittance to federation accounts.

The president had earlier, in an interview granted on television to mark the Democratic Day celebration on June 12, linked the rising subsidy payment in the country to cross-border smuggling of the country’s PMS.


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Buhari, in the interview, expressed concern that even when Nigeria’s border was closed, the smugglers rode on motprcycles through the bushes to smuggle the product, thereby exploiting Nigeria’s subsidy payment.

Spokesperson of the NNPC Kenny Obateru, in a statement issued on Wednesday, explained that  President Buhari had directed all industry stakeholders to collaborate with the corporation to ensure that the daily national petroleum products consumption, which shot up to 102 million litres in the month of May, was brought down to realistic levels of 60 million litres.

Obateru quoted Kyari as saying that smuggling was not a business that should be condoned “because even for deregulated petroleum products, it brings extra cost burden on this country both in terms of safety and security of the foreign exchange. It even constitutes more burden to this country when the product involved is a regulated product like Premium Motor Spirit.”

Kyari explained that with the increasing price of crude at the global OPEC plus production cuts, Nigeria could not afford to shoulder the cost of smuggling.

“We all know that our daily consumption is not up to 60 million litres. We all know that, and that is why we have to pull it down. We will pull it down by every means necessary,” Kyari said.

Mele Kyari
Mele Kyari, NNPC Boss.
Photo credit: thecapital.com

He said NNPC would embrace the advanced cargo declaration in line with global best practices to tackle the issue of crude oil theft in the country.

The statement also noted the willingness of the EFCC Chairman Abdulrasheed Bawa to work with the NNPC to ensure that all those involved in the economic sabotage were brought to book.

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THE ICIR reports that Kyari had earlier said that the rising price of crude in the global oil market, rather than being a blessing to Nigeria, was already creating several problems for the country as rising subsidy payment took away a great chunk of benefits of crude benefits from the country.

In reaction to the International Monetary Fund (IMF) concerns about Nigeria’s overburdening subsidy payment putting its economy at financial risk, Kyari noted that the rising crude oil for Nigeria presented a ‘chicken and egg’ situation for the country.

He expressed concerns that the oil price was currently exiting the comfort zone set by the NNPC, a situation he said was creating a burden for the corporation already.

Analysts are worried that the rising subsidy payment has seen the corporation remitted almost nothing into the federation account on two occasions.

“Nigeria must do away with the subsidy payment, which is more like eating the future. We must take that bold step now,”, President of Major Oil Marketers Association of Nigeria (MOMAN) Adetunji Oyebanji told THE ICIR.

Some analysts question the efficiency of cross-border security outfits such as the Nigeria Customs Service and the Nigerian Immigration Services, arguing that they cannot be exempted from the crisis.

Millions of PMS are stolen from Nigeria daily by smugglers who profit from dubious subsidy payments.  Nigeria’s daily consumption has risen from 50 to 60 million litres in 2020 to 93 million litres in April 2020. About N120 billion is spent on subsidy each month, according to Kyari, eroding cash-strapped Nigeria’s scarce resources.

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Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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