Why We May Be Unable To Provide Fuel Adequately

The Group Managing Director of National Petroleum Corporation (NNPC), Mr. Maikanti Baru, has explained that smuggling and diverting of Premium Motor Spirit would make it difficult for the NNPC to make fuel consistently available.

Baru told the Joint National Assembly Committee on Downstream that the unexpected and unnatural shock in fuel consumption to record levels has over-stretched the Direct-Sale-Direct-Supply (DSDP) crude for product supply arrangement, which was initially based on 35 million litres per day petrol consumption pattern to 55 million litres per day.

He cautioned that if relevant authorities do not address the illicit operations of the fuel truck diverters and smugglers, it would be extremely difficult to assure the uninterrupted availability of petrol across the country. He added that the difficulty would be posed by the immense leakages smugglers have wreaked on the fuel supply and distribution network by the smugglers.

The GMD complained that the recent new average daily fuel evacuation of 55 million litres since December 1, 2017 to date, it was necessary for security agencies to combat the smuggling syndicates who are cashing in on the petrol price differentials between Nigeria and neighbouring countries to make illegal profit.

He stated that asides the strain in the capacity of NNPC to maintain the prevailing 100 per cent petrol importation considering the increasing cost, the current circumstances was negatively affecting NNPC’s resources for servicing Joint Venture Cash Call (JVCC) and other obligations.

To ensure adequate supply of petroleum products and national energy security, there is a need for the Federal Government to provide flush volumes in January and March 2018, Baru added.

He also said the FG need to create enabling environment for other oil marketing companies to partake in the importation of petroleum products.

He also noted the need to double supply in order to raise the fuel sufficiency template back to the 30 days threshold from the current 15 days by bringing in at least two vessels per day for 20 days.

The NNPC GMD, however, explained that the corporation would require additional funding outside the DSDP regime to achieve this.