Nigeria loses $48m worth of crude oil to vandalism 6 months – NNPC

The Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Melee Kyari, declared Wednesday that within the last six months, Nigeria has lost $48 million worth of crude oil to vandalism.
He also declared that as much as the corporation can account for the petroleum products evacuated daily from the depots which he put at 54 million litres, the daily local consumption of the products is unknown to the agency.


Kyari, who spoke at an interactive hearing on “Exiting Petroleum Subsidy: Ensuring Self-Sufficiency in Domestic Refining of Petroleum Products” organised by the Senate Joint  Committee on Petroleum Resources (Upstream and Downstream), said in 2020 alone, Nigeria had lost about $48 million worth of crude oil due to pipeline vandalism. 


He, however, said the number is lower when compared to the past adding that in 2018 and 2019, the loss to pipeline vandalism stood at $825 million and $725 million respectively.
The reduction in vandalism, the NNPC boss said, was due to the increased surveillance by the security agencies. 


According to him, pipelines are being destroyed within townships, not in the bush, with the connivance of security agents, security contractors and community leaders.
He said the corporation has decided to hand over the pipeline security completely to the security agencies “as it is their work to secure government property.”


On daily local consumption of petroleum products in the country, Kyari specifically stated that “we don’t know how much petroleum we consume daily in this country, but we know how much of the product is taken out of the depot”.
According to him, this year, around 54 million litres of petroleum products are evacuated from the depot daily, but the consumption is somewhere below that. 


He also said the NNPC have no knowledge of the amount of products that are transported through Nigeria’s borders to neighbouring countries. 
His words: “It is impossible to know, nobody declares it, and therefore as it crosses, it goes. There are open borders across the West African sub-region. It is impossible to stop cross border supply of products. No amount of policing or control that anyone can put in place that can stop that.”


The NNPC, he added,  is working with the Central Bank of Nigeria (CBN) to stabilise the forex market for all, so that marketers will access forex at market rate and get products at market price. 
He said the only way to stop smuggling of petroleum products is to walk away from subsidy so that the market price can be stable.
Shedding more light on fuel subsidy, the NNPC GMD explained that there were several attempts in the history of this country to walk away from subsidy of petroleum products.
He said: “Until March this year, there were no subsidies on aviation fuel, but the one we couldn’t walk away from is subsidy on PMS.
“We have never seen this price collapse in the history of oil. The price fell from 50 dollars per barrel to less than 10 dollars  and no country is prepared for this. Nobody saw it coming. The result of this is revenue collapse, because there is a direct correlation. 
“Today, in our effort to ensure price stability in collaboration with the rest of the world, our daily crude oil production is at 1.48 million barrels per day”.
In his speech, Chairman of the Senate Joint Committee on Petroleum Resources (Upstream and Downstream), Senator Sabo Mohammed, stated that the time was nigh for the government to stop subsidising the cost of petroleum products.
“I believe the time has come to finally take the bold and giant step to exit fuel subsidy and redirect the huge subsidy resources into meaningful and developmental projects that would benefit the majority of Nigerians. 
“Enough is enough, our people have suffered a lot in the hands of a very few individuals, who knowingly or unknowingly cost the nation billions of hard earned revenue. 
“As we deliberate and interact towards finding a lasting solution to this subsidy albatross, your candid submissions will contribute immensely to assisting the Joint Committee in arriving at an informed decision in writing its report,” he  said.

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