The minister of state for petroleum resources has recommended that the NNPC sell petrol above landing cost to combat smuggling
The Minister of State for Petroleum Resources, Heineken Lokpobiri, has recommended that the Nigerian National Petroleum Company (NNPC) Ltd. sell petrol above the landing cost to combat smuggling. Speaking at the 2024 Energy and Labour Summit in Abuja, Lokpobiri suggested that selling petrol below the landing cost incentivizes smuggling to neighboring countries. He also criticized security agencies for their alleged complicity in smuggling activities.
Lokpobiri noted that despite efforts by the NNPC and the Nigeria Customs Service to reduce smuggling, the practice remains prevalent due to significant price differences between Nigeria and its neighbors. For example, petrol prices in Nigeria average N701.99 per litre, compared to N1,672.05 in the Republic of Benin and N2,061.55 in Cameroon.
The Federal Government’s removal of the petrol subsidy in May last year, which raised prices from N197 to approximately N650 per litre, has exacerbated the smuggling problem. Lokpobiri emphasized that selling petrol above the landing cost could help bridge the profit gap and deter smuggling.
The minister also addressed infrastructure challenges, highlighting that the aging and corroded pipelines, some dating back to the 1960s and 1970s, facilitate fuel theft and vandalism. He advocated for public-private partnerships to address these issues and improve infrastructure.
Additionally, Lokpobiri stressed the need to increase crude oil production to support local refineries and ensure Nigeria’s role in regional energy security. He underscored the importance of boosting production to meet domestic and export obligations and support local refining efforts.
