NNPC ready for forensic audit of PMS supply, subsidy payment – Official

The Nigerian Nigerian National Petroleum Company Ltd. (NNPC Ltd.) has asserted that the nation uses 68 million liters of petroleum per day, stating that it is prepared for a forensic audit of its supply and the amount it spends subsidizing the product for the federation.

The was in response to assertions made by Col. Hameed Ali, the Controller-General of the Nigerian Customs Service, over the nation’s fuel consumption figures.

Ali had questioned why the Nigerian NNPC LTD would release 98 million liters of fuel daily for domestic use as opposed to the 60 million liters that were calculated to be available.

He had during a meeting with National Assembly members last Thursday said: “I remember that last year, we spoke about this but unfortunately, this year, we are talking about subsidy again.

“The issue is not about smuggling of petroleum products. I have always argued this with NNPC. If we are consuming 60 million litres per day by their own computation, why would you allow the release of 98 million litres per day?

“If you know this is our consumption, why would you allow that release? Scientifically, you cannot tell me that if I fill my tank today, tomorrow, I will fill the same tank with the same quantity of fuel.

“If I am operating a fuel station and I go to Minna depot, lift petrol and take it to Kaduna, I may get to Kaduna in the evening and offload that fuel.

“There is no way I would have sold off that petrol immediately to warrant another load. So, how did you get to 60 million litres per day? That is my problem. The issue of smuggling, if you release 98 million litre in actual, and 60 million litres is used, the balance should be 38 million litres.

“How many trucks will carry 38 million litres every day? Which road are they following and where are they carrying this thing to.

However, in response to the assertions made by the Customs CG, the National Oil Company said that the entire volume of Premium Motor Spirit (PMS) brought into the nation between January and August 2022 was 16.46 billion litres.

The 16.46 billion liters of fuel brought into the nation between January and August equates to an average supply of 68 million liters per day, according to a statement from NNPC Ltd. signed by Group General Manager, Group Public Affairs Division, Garba Deen Muhammad.

Similarly, it stated that imports in 2021 was total 22.35 billion liters, translating to an average supply of 61 million liters per day.

According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the average daily evacuation (Depot truck out) from January to August 2022 is 67 million liters per day (NMDPRA).

It added that the NMDPRA’s Daily Evacuation (Depot load outs) statistics, showed a daily fluctuation ranging from 4 million liters to 100 million liters each day.

The Company also noted in the statement that the entire supply structure may be impacted by the effects of maritime and cross-border smuggling of PMS.

It acknowledged the likelihood of more illegal activity along the PMS supply and distribution value chain.

It claimed that from the fourth quarter of 2017, oil marketing businesses had been obliged to stop importing PMS due to increased crude oil prices and PMS supply costs that were higher than the PPPRA (now NMDPRA) cap.

The statement noted that, in view of these challenges being faced, NNPC has continued to serve as the supplier of last resort and to transparently disclose the monthly PMS cost under recovery to the appropriate authorities.

The statement reads, “The Nigerian National Petroleum Company Limited (NNPC Ltd) wishes to inform members of the general public that between January and August 2022, the total volume of Premium Motor Spirit (PMS) imported into the country was 16.46 billion litres, which translates to an average supply of 68 million litres per day.

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“Similarly, import in the year 2021 was 22.35 billion litres, which translated to an average supply of 61 million litres per day. The NNPC Ltd notes the average daily evacuation (Depot truck out) from January to August 2022 stands at 67million litres per day as reported by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

“Daily Evacuation (Depot load outs) records of the NMDPRA do carry daily oscillation ranging from as low as 4 million litres to as high as 100 million litres per day.

“The NNPC also wishes to point out that rising crude oil prices & PMS supply costs above PPPRA (now NMDPRA) cap had forced oil marketing companies’ (OMCs) withdrawal from PMS import since the fourth quarter of 2017.

“In the light of these challenges, NNPC has remained the supplier of last resort and continue to transparently report the monthly PMS cost under recoveries to the relevant authorities.

“NNPC limited also note the average Q2, 2022 international market determined landing cost was US$1,283/MT and the approved marketing and distribution cost of N46/litres.

“The combination of these cost elements translates to retail pump price of N462/litres and an average subsidy of N297/litres and an annual estimate N6.5 trillion on the assumption of 60million litres daily PMS supply. This will continuously be adjusted by market and demand realities.

“NNPC Ltd shall continue to ensure compliance with existing governance framework that requires participation of relevant government agencies in all PMS discharge operations, including Nigerian Ports Authority, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigerian Navy, Nigeria Customs Service, NIMASA and all others.

“NNPC Ltd recognizes the impact of maritime and cross border smuggling of PMS on the overall supply framework. NNPC also acknowledges the possibilities of other criminal activities in the PMS supply and distribution value chain.

“NNPC will continue to engage and work with relevant agencies of the Government to curtail smuggling of PMS and contain any other criminal activities.

“We will continue to deliver on our mandate to ensure energy security for our country with integrity and transparency. We invite any forensic audit of the PMS supply and subsidy.”

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