The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, explained that a huge price gap in the pump price of petrol in Nigeria and neighbouring countries encouraged petrol smuggling.
Kyari gave this explanation during a presentation at an interactive session by the Joint Senate Committee on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
According to a statement by the corporation, he said concerted efforts made by NNPC and other agencies to combat the smuggling of petroleum products have not been successful due to the price variation.
Kyari explained that with a price difference of over N100 per litre, it was difficult to curb the activities of petrol smugglers.
“As long as there is arbitrage between the price that you sell and what is obtainable elsewhere, you can be sure that it is very difficult to contain the situation,” he said.
He emphasised that the activities of smugglers have also made it difficult for the country to determine the actual consumption figures for petrol.
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On the MTEF assumptions, the GMD reiterated a base oil price scenario of $57 per barrel for 2022, $61 per barrel for 2023 and $62 per barrel for 2024.
He predicated these estimates on a base national production of 1.883 million barrels per day in 2022, 2.234 million barrels per day in 2023 and 2.218 million barrels per day in 2024.
