The Federal Government has acknowledged that fuel smuggling from Nigeria to neighboring countries is an issue that cannot be entirely eradicated.

The Minister of State for Petroleum Resources, Heineken Lokpobiri, highlighted this at the 2024 Energy and Labour Summit in Abuja, explaining that the Nigerian National Petroleum Company Limited (NNPCL) lacks the funds necessary to rebuild the nation’s aging pipelines, which contributes to the problem.

Lokpobiri pointed out that the old, corroded pipelines, some of which date back to the 1960s and 1970s, are easily vandalized, facilitating the illegal transport of fuel.

“The reason why pipeline vandalism is very easy to do is because the pipelines have all expired; they are completely corroded. So, anybody can just go and tap it, and the thing is busted,” he said.

He stated that as long as NNPCL continues to import fuel and sell it below the landing cost, smuggling will persist.

“If NNPC imports PMS and sells to marketers at perhaps N600 or below, there’s no way that smuggling can stop,” Lokpobiri remarked, adding that the situation is exacerbated by security agents at the borders who are complicit in the smuggling activities.

“When smugglers are taking the products outside the country, even if you put all the policemen on the road, they are Nigerians; you and I know the answer,” he added.

The minister emphasized that even with increased crude oil production, the challenge lies in transporting it to terminals due to the deteriorated state of the pipelines.

He called for a public-private partnership to address the infrastructure issues, saying, “That is why we have to go for the global model – PPP. We have to get the private sector to come in.”

Lokpobiri also stressed the need for Nigeria to play a strategic role in ensuring energy security across West Africa. “Nigeria plays a very critical role in the energy security in Africa.

That is why whatever PMS we import into Nigeria finds its way to the whole of West Africa. That is why smuggling cannot stop,” he noted.

Regarding the supply of crude to local refineries, including the Dangote Refinery, Lokpobiri expressed concerns, noting that without increased production, meeting domestic and export obligations will be challenging.

“Our ambition is to ramp up production. It is only when we ramp up production that the midstream and the downstream can also be successful,” he said.

“Supporting local refining is the way to go. We can look for investors to explore and bring out this crude, so we will be able to meet both our domestic obligations and also export some to be able to raise more dollars and meet our obligations.”

He concluded by underscoring the importance of ramping up production to support local refining and ensure healthy competition among refineries, stating, “We are committed to ensuring we support local refineries with all the feed-stock.

If you must supply refineries in Nigeria and you don’t have the crude to supply, it remains something that is written beautifully in a law.” (Nigerian Tribune)

Update news