Despite Partial Border Closure, NNPC Failed To Reduce Fuel Import Volume—Report

Although the partial border closure enforced by Muhammadu Buhari in August 2019 induced a fall within the day by day petrol consumption within the nation, the Nigeria National Petroleum Corporation (NNPC) didn’t deliver down its import quantity to rhyme with the decreased day by day demand. 

Looking on the company’s knowledge on import/refining and distribution from September 2019 – the primary full month of the closure till November 2020 – the pan final month of its reversal, the agency imported 23.81bn liters of petrol and cashed in on simply 19.08bn liters of the inventory.


Despite Partial Border Closure, NNPC Failed To Reduce Fuel Import Volume—Report 2

Aside from the unknown quantity it took from its arbitrarily established National Fuel Support Fund (NFSF), the agency stated it claimed 222.18bn as ‘under recovery’ from importing this a lot for the nation in seven months from September 2019 to March 2020. Compared to its month-to-month withholding of an estimated N120bn monthly in 2021, these figures seem modest.

The drop in day by day gasoline consumption stands in lonely firm among the many record of issues that went proper for the economic system in the course of the 16-month border closure. The president introduced the partial closure to stem the smuggling of meals into the nation and petrol the opposite method.

His protectionist strikes started to backfire in the identical month it was introduced. Naturally, all the value features made by the nation’s return to gradual financial progress and a discount in inflation began to pitter out, because the economic system reacted to its new restrictions.

Partial border closure was not the one method the economic system was held again, foreign exchange bans have been prolonged to meals importers within the face of low storage and insecurity. It was no shock   to observers when the National Bureau of Statistics (NBS) stated headline inflation had risen from 11.02 per cent in August 2019 to 11.24 per cent within the first full month of the closure.

Throughout the interval of the border closure, the costs of products and companies within the nation by no means stopped ascending. Petrol ought to have been in that cart of commodities that have been hovering above the paycheck of on a regular basis Nigerians a lot earlier however the authorities tamped it down with a weight of over N200bn, till the COVID-19 pandemic struck.

Since the federal government was not prepared to dissuade smuggling by permitting the value of petrol rise, observers felt the NNPC would have tried to make the most of the federal government’s alternate possibility and reduce down on the quantity of gasoline it refined with its Direct Sale Direct Purchase sellers. The company as a substitute stored up the surplus provide, regardless of the pandemic forcing the Organisation of Petroleum Exporting Countries (OPEC) to chop down Nigeria’s oil export output, decreasing the company’s money move as a consequence.

In the 15 months in the course of the partial boundary closure studied, the NNPC says it distributed 4.90bn liters of petrol lower than it delivered within the 15 months earlier than, inclusive of August, the month the land border restriction was introduced. The agency offered 23.99bn liters between June 2018 and August 2019 however imported N24.64bn liters. The agency had no drawback holding out queues with an import extra of 649.64m liters, which is lower than one month of consumption.


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Why then did it discover holding an identical fee of extra between importation and distribution when day by day consumption dropped?

“From what I hear, it is because the government wants to make sure there are no queues,” says Ayodele Oni, Partner at Bloomfield Law Practice. “This administration wants to be able to say that even if they didn’t get anything right, they prevented fuel queues from building up.”

At a month-to-month import common of 1.59bn liters, the company collected 2.98 months of extra in the course of the 15 months of boundary restrictions. If we divided this additional of 4.73bn by the a lot decrease distribution determine of 1.27bn, the collected petrol that wasn’t used comes to three.72 months.


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The entity ought to be hailed nevertheless, for bringing down the sum of money it withheld as beneath restoration earlier than the trouble closure was introduced.

The agency held N855.39bn for importing 24.64bn liters of petrol – a month-to-month common of N57bn. It dropped this common to N31.74bn for importing 823.37m liters much less. The discount in ‘under recovery’ claims was most certainly because of the drop in oil costs from its $80 highs on the finish of 2018 to its $60/higher $50 bracket in 2019 anyhow. 

In any case, the quantity of petrol distributed by the NNPC is a number of million liters greater than what ultimately will get to the pump. The Department of Petroleum Resources (DPR) has been reporting in its nationwide inventory depot degree updates that day by day demand Is estimated at 38,200,000 since January 2020.

Holding this to be true from September 2019 to November 2020, the NNPC’s day by day distribution determine of 41.84m for this era, is 3.64m greater than the DPR’s estimation.

Observers really feel if the NNPC should import any extra volumes, it ought to be regulated. “Right now, I don’t know any law that mandates the NNPC to import excess petrol,” Oni says. “It is just a political policy that gives room for fraudulence.”

Before the land borders have been locked, NNPC’s says its day by day distribution was 52.4m liters. The barring of products from getting into Nigeria throughout land, decreased the company’s distribution quantity by over 10.6m, nonetheless it might solely drop importation by 1.69m liters from the 15 months previous the border closure.

The company new lower than one month into the scheme that consumption ranges had dropped, so why did it proceed to import prefer it had different prospects exterior Nigeria?

“Significant drop in the PMS evacuation from fuel depots noted since August 22nd may be connected to border closure and other interventions of the security agencies aimed at curbing smuggling. We will contain smuggling of the PMS,” Group Managing Director of the agency, Mele Kyari stated in a tweet on September 10, 2019.

The NNPC spokesperson, Kennie Obateru, has not responded to findings, promising on to hunt response from the suitable officers.

This story was produced beneath the NAREP oil and gasoline 2021 fellowship of the Premium Times Centre for Investigative Journalism.

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Despite Partial Border Closure, NNPC Failed To Reduce Fuel Import Volume—Report

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