‘NNPC spends N774m daily subsidising petrol’ – Maikanti Baru

Group managing director, NNPC, Maikanti Baru, in a statement released today disclosed that a detailed study conducted by NNPC indicated strong correlation between the presence of the frontier stations.

'NNPC spends N774m daily subsidising petrol' – Maikanti Baru lailasnews

According to him, the activities of fuel smuggling syndicates, and that the activities of the smugglers led to the recent abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 milion litres per day, which was in sharp contrast with established national consumption pattern.

Maikanti Baru who had before now made a passionate plea to the Comptroller General of the Nigerian Customs Service, Hameed Ali, to help check the proliferation of fuel stations in communities with international land and coastal borders across the country, said the benefit of the subsidy is being enjoyed by only a few as well as in neighbouring countries on the account of the continued smuggling of the fuel across the borders.

In the NNPC statement, the Group Managing Director further said that the energised unprecedented cross-border smuggling of petrol to neighboring countries, making it difficult to sanitise the fuel supply and distribution matrix in the country.

The statement read in part;

“NNPC is concerned that continued cross-border smuggling of petrol will deny Nigerians the benefit of the FG’s benevolence of keeping a fix retail price of N145 per litre despite the increase in PMS open market price above N171 per litre.

Based on the heightened petrol consumption rate of 50 million litre per day, the corporation was incurring an under-recovery of N774 million every day.”

Nigeria’s fuel subsidy continues to crowd out other development spending. By comparison,, Nigeria’s total allocation for education is about $2.2 billion and it is not much higher for health care. Infant mortality in Nigeria remains unacceptably high at 90.4 per 1,000 live births. In 2004, it was estimated that only 15 percent of the country’s roads were paved. The $8 billion from the fuel subsidy could help to address some of these issues.

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