GROUP Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, says petrol smugglers took advantage of the loopholes in the subsidy regime by making around ₦17m profit per truck in neighbouring countries.
Briefing journalists in Abuja, the NNPCL boss said cross-border smuggling was rampant due to the fuel subsidy, with a 6,000-liter truck netting smugglers no less than ₦17 million per trip.
“In the last 47 years, PMS has always been subsidised and subsidy is creating arbitrage that means there is a difference between price in one location, lower than what it should be in another location,” he said.
“And when Mr. President announced the removal of subsidy in June, what he did was recalibrate the price. There is no longer any value in anyone taking the product across the border. If you do, you’re not going to make those profits than you do.
“In a 6,000-litre truck, you can actually gain up to ₦17 million from just one truck. How are you going to stop someone who with two trips can just easily make ₦17 million times two—which is the price of the truck itself?
“However, when you take a truck legally maybe N8 million, say, to Maiduguri, the legitimate value you have is less than ₦500,000. Why will I see ₦17 million and then take all the trouble go to Maiduguri, keep it in the fuel station for one month and then make ₦3 to ₦4 million.”
Fuel prices shot up at pumps across Nigeria on October 9, dealing another blow to Nigerians already suffering the worst economic crisis in a generation.
The state oil company has not commented on the sudden increase of between roughly 15 and 20 per cent seen at pumps across the country.
But it marks the second such hike in just over a month, and in early September the NNPCL acknowledged huge debts to fuel suppliers as it announced a roughly 40-percent price increase to help its finances.
Nigerians are already battling soaring inflation and food costs as well as a battered naira currency.
