Nigeria’s daily PMS supply: NNPC denies Customs’ 98m litres claim, insists it supplies  68mlpd  between Jan, August 2022

Oredola Adeola

The  Nigerian National Petroleum Corporation Ltd, NNPC Ltd, has rejected the allegation by the Nigeria Customs Service that it is making a subsidy claim over 98 million litres per day(lpd), insisting that the total volume of PMS imported into the country was 16.46 billion litres, translating to an average supply of 68 million litres per day from Jan-August 2022.

The Corporation made this known in a statement released by Garba Deen Muhammad, Group General Manager, Group Public Affairs Division, NNPC and obtained by EnergyDay on Sunday.

The Corporation boasted that it is ready for forensic audit of the PMS supply and subsidy management framework of the NNPC, in reaction to a statement credited to Col Hameed Ali, (retd),  Controller-General of the Nigeria Customs Service, about the fuel consumption figures in the country.

The Customs Boss  in his presentation to the House of Representatives’ Committee on Finance at the continued hearing on the proposed 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, on Thursday, in Abuja, claimed that the NNPC is importing an excess of 38 million litres of PMS daily and does not have the moral justification to defend the over N6.34tn subsidy payment it was quoting for 2023.

The Corporation revealed that an annual estimate of N6.5 trillion is paid as subsidy on the assumption of 60 million litres daily PMS supply.

The Corporation further noted that the average Q2, 2022 international market determined landing cost of PMS  translated into N462/litre, with an average subsidy of N297/Litre.

The Group Managing Director of the NNPC, Melee Kyari, Mr Kyari had at different occasions given varying figures of the actual volume of PMS consumed by Nigeria. In 2021, it said that the country was consuming 103 million litres daily in May 2021 and oscillating between 70 million to 60 million litres daily in June 2021.

The Corporation in its recent statement said that between January and August 2022, the total volume of PMS imported into the  country was 16.46 billion litres, which translates to an average supply of 68 million litres
per day.

The NNPC said, “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 noted that the average daily evacuation(Depot truck out) from January to August, 2022  stands at 67 million litres per day as reported by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) Daily Evacuation (Depot loadouts)  records of the NMDPRA do carry daily oscillation ranging from as low a 4 million litres to as high as 100 million per day.

The Corporation also revealed that rising crude oil prices and PMS supply costs above PPPRA(now NMDPRA) cap had forced oil marketing companies  (OMCs) withdrawal from PMS import since the fourth quarter of 2017.

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

“NNPC Ltd also noted the average Q2, 2022 international market determined landing cost was US$1.283/MT and the approved marketing and distribution cost of N46/litre.

“The combination of these cost elements translates to a retail pump price of N462/Litre and an average subsidy of N297/Litre and an annual estimate of N6.5 trillion on the assumption of 60 million litres daily PMS supply.

“This will continuously be adjusted by the market and demand realities.

“NNPC Ltd shall continue to ensure compliance with an existing governance framework that requires the participation of relevant government agencies in all PMS discharge operations, including Nigerian Port Authority, NMDPRA, Nigerian Navy, Nigerian Customs Service, NIMASA and all others.

“NNPC Ltd recognises the impact of maritime and cross-border smuggling of PMS on the overall supply framework.

“The Corporation also acknowledges the possibilities of other criminal activities in the PMS supply and distribution value chain.

“As a responsible business entity, NNPC, will continue to engage and work with relevant agencies of the Government to curtail smuggling of PMS and contain any other criminal activities.

NNPC in the statement however promised to continue to ensure energy security for our country with integrity and transparency.