NMDPRA Engages Customs To End PMS Smuggling

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says it is collaborating with the Nigeria Customs  Service to address the issue of cross border smuggling of petrol.

NMDPRA reassured in a statement that there was sufficient  petrol of over 1.6 billion litres as at  January  26 both on land and marine.

It said; “NNPC has additionally made firm commitment to supply more volume of PMS for the months ahead to guarantee national energy security and nationwide availability at government regulated price.

“The current distribution hitch is heightened by activities of cross-border smugglers, who diverts PMS meant for Nigerian market to neighbouring countries where PMS prices are significantly higher than Nigeria’s regulated price. We are engaging and collaborating with the Nigeria Customs Service to address this issue.”

The statement read; “The price arbitrage between Nigeria and neighbouring countries has continued to grow due to inflation and the regional impact of the Russia-Ukraine conflict on global energy value chain including international freight rates and coastal vessels charter rates.

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“We wish to bring to public knowledge that the ongoing government effort to rehabilitate strategic Nigerian roads ahead of the rainy season has necessitated rerouting of tanker trucks conveying petroleum products to alternative roads, therefore increasing transit time and associated cost of product transportation.”

NMDPRA and key stakeholders including NNPC have put various measures to address the issue, including: Modest adjustment in the cost of product transportation to cater for the impact of high AGO price on transporters, while making special provision of diesel to marketers at a reduced price, automation of products sales interface, Emplacement of a monitoring system in collaboration with government security agencies for distribution of products to retail outlets, extended operating hours both at the loading depots and some selected filling stations and  rehabilitation of critical fuel distribution road network through tax credit scheme by the NNPC, regular stakeholders’ engagements, among others.

“We have reinforced our monitoring teams and appropriate sanctions to checkmate the activities of erring marketers who are distorting our planned product flow to designated outlets in order to profiteer from price arbitrage.  As a medium to long term measure, cost-efficient means of transportation, including Autogas conversions and pipeline rehabilitation, are being implemented. This will be complemented by end-to-end process automation across the value chain. NMDPRA appreciates the collaborative efforts of some patriotic oil marketing companies who, despite the glaring incentives to engage in illegal price arbitrage, have stood steadfast and operated responsibly within the approved pricing limits.”