The Nigerian National Petroleum Corporation (NNPC) has disclosed that the country has reorded about $48 million (or N17 billion) loss to oil theft this year alone based on the benchmark oil price exchange rate of N360/$1.
The corporation’s Group Managing Director, Mallam Mele Kyari, made this disclosure at an interactive hearing on ‘Exiting Petroleum Subsidy: Ensuring Self-Sufficiency in Domestic Refining of Petroleum Products’ by the Senate Joint Committee on Petroleum Resources (Upstream and Downstream).
Kyari, who said the $48 million loss was lower than the $825 million and $725 million recorded in 2018 and 2019 respectively, attributed the reduction to increased surveillance of oil pipelines by the security agencies. Speaking on the volume of Premium Motor Spirit (petrol) being consumed daily in the country, the GMD said the corporation had no knowledge of the daily consumption of petroleum products or volume being
He clarified: “We don’t know how much petroleum we consume daily in this country, but we know how much of product is taken out of depots.” According to him, this year about 54 million litres of petroleum product are being evacuated from the depots daily, but the consumption is somewhere below that.
In addition, he said the state-owned oil company did not also know the actual volume of products being transported across Nigeria’s borders to neighbouring countries, adding that “it is impossible to know, nobody declares it, and therefore as it crosses, it goes.”
On the state of the country’s refineries, Kyari said NNPC “deliberately” shut down the Kaduna, Warri and Port Harcourt refineries for two reasons, namely the low value of extracted or refined products and inability of the corporation to guarantee crude oil supply to these lines.
He blamed the problem on the failure to carry out proper turn around maintenance, pointing out that “we have not done proper maintenance in the last 30 years, and the cumulative effect is that even when you start it today, it cannot be run optimally. Speaking further on why the poor state of the refineries, Kyari said the corporation spent N64 billion to resuscitate Kaduna refinery without achieving any meaningful result.
He, however, assured that the corporation was working with partners to fix the refineries. On the issue of petrol subsidy, the GMD lamented that there had been several failed attempts to remove it, saying that the best way to stabilize the market is for the government discontinue the subsidy regime.
