How Corruption, Cross-Border Smuggling Scuttle Fg’s Bid To Stabilise Fuel Supply

How Corruption, Cross-Border Smuggling Scuttle Fg’s Bid To Stabilise Fuel Supply

Recent revelations by the Nigerian National Petroleum Corporation (NNPC) that high volumes of petroleum products have continued to be smuggled from Nigeria to neighbouring countries, among other relevant posers, questions the integrity of security agencies manning the border posts.

When Dr. Maikanti Baru, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) led his management team on a visit to the Comptroller General of the Nigeria Customs Service (NCS), Col Hameed Ali (rtd), in Abuja to initiate a partnership that could curb the increasing incidence of petroleum products smuggling, the data he unveiled showed a much more damning and treacherous assault on the nation’s economy.

From 35 million litres of petrol consumed daily prior to the increase in the pump price to N145, average daily consumption skyrocketed to over 50 million litres per day.

The increase, Baru told the Customs boss, defied all logic and is in “sharp contrast with established national consumption pattern.” His interpretation of the increase in consumption was straight forward: It is a strong indication that smuggling has taken a new dimension. Calling the rate of smuggling of petrol “unprecedented”, Baru said a detailed study conducted by the NNPC indicated strong correlation between the presence of the frontier stations and the activities of fuel smuggling syndicates.

In December 2017, the Department of Petroleum Resources (DPR) reported that more than nine million litres of petrol which was supplied to one retail station alone in Kano. It was just one of the numerous cases of willful diversion of products perpetuated by businesses at the lower rung of the marketing chain.

According to the DPR Head of Public Affairs Unit, Mr Saidu Bulama, 20 marketers in Kano and other states in the north have been fined N2.5 billion for diverting over nine million litres of petrol. He explained that the marketers evaded detection because the products were intervention products meant for the market between December. 9, 2017 and February 3, 2018.

“The DPR has uncovered massive diversion of products. These were as a result of Special Intelligence Unit that we just created to intensify surveillance.

“The products so far diverted were from Kano NNPC depot where one marketer diverted 115 trucks within a month and you could see that it was the peak of the crisis.

“One marketer through Kano depot was consigned 115 trucks, specifically meant for intervention and those trucks never got to any station because the station he claimed to be taking the truck was a non-existing station.

“Our intelligence unit visited there and discovered that the land was not even cleared let alone a filling station existing there,’’ Bulama said.

While a lot of attention has been given to the coastal and border towns in the south, the north has become the bastion for unchecked smuggling of refined products to neighbouring towns. The revelation from DPR on the disappearance of 115 trucks laden with petrol to a non-existent retail station alone in Kano State has brought to the fore the issue of ineffectual policing of land borders in the north.

From Sokoto through Kebbi, Zamfara, Katsina, Kano to Borno, it is a vast unmarked and unprotected land where inhabitants engage in unregulated trade with their kith and kin in Niger Repulic.

Baru explained that because of the low price of petrol in Nigeria compared to prices per litre in neighbouring West African countries, smugglers are taking advantage of this to divert loaded tankers of products from their destinations in-country to service stations at border towns to supply to countries like Niger, Ghana, and Benin Republic, amongst others.

NNPC had said it now incurs a subsidy of N774 million as subsidy on the 50 million litres of premium motor spirit (PMS) consumed daily across the country. Curiously, the NNPC calls this volume of subsidy "under recovery ", attributing the smuggling spree to the proliferation of filling stations in communities within international land and coastal borders across the country. These filling stations have become staging posts for a large scale of smuggling of petroleum products outside Nigeria.

According to Baru, eight states within the coastal boundaries spread across 24 local government areas accounted for 866 registered fuel outlets with combined capacity of 144,998,700 litres of petrol.

With a total of 4,477 kilometers of land boundaries surrounded by Chad (85 km), Benin Republic (809km), Niger (1,608km), Cameroon (1,975km) and the Gulf of Guinea in the south, Nigeria’s borders are manned by security agencies and most especially the Nigeria Customs Service, among others. A total of 13 states share boundaries with other countries within the West African subregion and the African continent.

Going by the poor manner agencies of the government are known to handle issues of statistics, NNPC’s claims that it imports about 50 million litres of PMS daily out of which a total of 15 million litres are lost to smuggling remain subject to further scrutiny. Experts see NNPC’s figure of 15 million litres as a cautious estimate given the oil behemoth’s infamous lack of tardiness in record keeping.

Observers have said that any cross-border criminal act in Nigeria is traceable to the porosity of the borders and the ease with which smugglers enter and exit through the nation's 149 border points. The poorly- manned Jibiya and Ilela borders in the north west, for example, has been described as one of the notorious posts in Nigeria despite the large number of Customs personnel manning it. Here, all kinds of items exit and enter the country unchecked.

In fact, Jibiya is alleged to be a favourite for Customs officers seeking ‘juicy’ postings owing to the ease of complicity that exists among them and smugglers to encourage the illicit trade.

Sources told our correspondent recently that despite restrictions on the movement of prohibited goods in the axis, Customs officers look the other way as illegal movement of people and goods flow unchecked.

Apart from alleged high level of connivance from customs officials at the frontiers to allow illicit freight of PMS, there are concerns about NNPC officials who alsoconnive with owners of petrol stations located near the borders to commit the same offence.

Observers often recall that tankers laden with petroleum products always cross the border posts to neighbouring countries while customs officials who are supposed to monitor cross-border movement collect huge bribes from drivers.

From the Idiroko border post in Ogun State, a Baale who wants to remain anonymous recently told Business & Maritime West Africa that apart from goods like rice, vehicles, poultry products and second- hand clothing, petroleum products remain a major attraction, talking about goods smugglers deal on in the full glare of customs officers.

"The lucrative business of smuggling tankers within the border community is highly organised by the smugglers and officers of the customs."

The products are not only smuggled by smaller containers and 50 liters jerrycans but through large tankers bearing over 44,000 litres of fuel each."

He stated that while tankers ply the roads, smugglers use 50 liters jerrycans to smuggle petroleum products through the creeks Nigeria shares with neighbouring Benin Republic.

This trend has, over time, become a recurring decimal within the Ogun state and Badagry borders owing to smugglers’ determination to resist checks.

From the Seme border axis, Haruna Salami, a transporter lamented the increasing level of smuggling which he attributed to the alarming rate of bribery and corruption buoyed by connivance of operatives of some security agencies.

Apart form Seme border, the transporter also affirmed that the Idiroko, Shaki and Banki areas are also volatile and notorious with criminal activities.

He alleged that most of the prohibited but smuggled goods found in the country come in through the border posts located in the northern region.

In his analysis, he said that while the western and eastern borders are a bit regulated by the law enforcement agencies, the northern borders are highly vulnerable to smuggling. The enforcement of government's trade and fiscal policies is not seriously pursued as done in the southern borders. He called on customs management to adopt the same measure in enforcement of laws in both borders as the unrestrained activities of smugglers in the north is killingly the nation's economy.

A tanker driver, Musa Bala, who plies the Jibiya border route regrets that despite what customs authorities in Abuja are fed with, smuggling of petroleum products keeps thriving because officers who make huge money from them (tanker owners and the drivers) encourage it. He recommends that stiffer sanctions be meted out to both smugglers and officers who encourage them.