Lagos — The Major Oil Marketers Association of Nigeria, MOMAN has blamed subsidy behind reason for the recent surge in daily consumption of Premium Motor Spirit, PMS or petrol in Nigeria.
In a chat with SweetcrudeReports over the weekend over the sudden increase in petrol consumption in Nigeria, Tunji Oyebanji, Chairman of the Association said although most stakeholders estimate Nigeria’s daily petrol consumption to be less than 55 million liters, findings indicate that Nigeria does not exclusively consume this amount of the product as a huge chunk is being smuggled to these neighbouring countries due to subsidy.
“Prior to the regime of President Muhammadu Buhari, Nigeria’s petrol consumption was estimated at between 35 million to 40 million litres daily, less than six years after, the country’s average daily consumption have skyrocketed to over 72.72 million liters per day from 57.44 million litres sold a month earlier, exposing the thriving activities of smugglers in the nation’s petroleum industry”.
SweetcrudeReports had earlier reported its recent findings that daily consumption of the product in Nigeria had recently increased to 80 million litres per day.
Data from NNPC also showed the North West region consumes more volume of petrol of 985,974,850 liters in Q1 2020 compared to the Southeast region of 599,821,058 liters within the same period.
The Nigerian National Petroleum Corporation had recently said the country loses N2 billion daily to fuel smuggling.
“For MOMAN, the absence of subsidies in Nigeria’s neighbouring countries has for many years fuelled the incentive to smuggle an estimated 30 percent of the country’s daily consumption, which basically means Nigeria is subsidising its neighbours”, he said.
In its latest newsletter, MOMAN puts the average pump price of petrol in other West African countries at between N312 and N570 per litre, compared to N166.4 per litre in Nigeria.
Early this year, the federal government renewed the fight against smuggling of petroleum products out of the country with a new technology commissioned by the Department of Petroleum Resources, DPR called Designated the Downstream Remote Monitoring System, DRMS.
The initiative is aimed at checking illegal activities in the downstream sector of the oil and gas industry, determining illegal petrol stations actors and providing accurate data on the industry.
“You can take inventories per station, location and state, where products are coming into the country, where they are stored, how they are distributed to filling stations. When we see that the population is not in tandem with the volume being consumed, we know something sinister is happening,” Auwalu Sarki, Director-General of DPR, said in a statement.
While the initiative seems laudable, Oyebanji said most stakeholders say removing petrol subsidy is central in ending smuggling which is allegedly said to be controlled by powerful mafia organisations with links to influential politicians and bureaucrats.
Over the years, the payment of subsidy has been a controversial subject in the management of Nigeria’s oil resources in the last decade.
While many Nigerians have called for its removal in order to enable the government invest the fund into other developmental projects, others have condemned such calls, citing it as perhaps one of the few “benefits” the masses enjoy from the government.
Some pressure groups, such as the organised labour, have advised the government to fix the refineries before removing fuel subsidy.
In March last year, when the international price of crude oil was low, the federal government announced that it had deregulated the downstream sector, which meant that the pump price would be determined by market forces.
That policy was implemented for months until crude oil prices rose again, and the eventual return of subsidies’ payment, which the NNPC has put at about N120 billion monthly.