Nigeria’s oil minister calls for higher petrol prices to curb smuggling.
The Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, has called for a revision in the pricing strategy of the Nigerian National Petroleum Corporation (NNPC) Limited, emphasizing that petrol prices must exceed the landing cost to combat the persistent issue of fuel smuggling effectively.
Speaking at the 2024 Energy and Labour Summit in Abuja, Senator Lokpobiri underscored the importance of aligning fuel prices with market realities.
He highlighted that selling imported petrol below the landing cost has inadvertently fueled smuggling activities, as lower domestic prices make it lucrative for smugglers to transport fuel to neighbouring countries where it can be sold at a higher price.
“If NNPC imports PMS and sells it to marketers at perhaps N600 or below, there’s no way that smuggling can stop,” Lokpobiri stated. He stressed that without adjusting the pricing, smuggling would continue to pose a significant challenge to Nigeria’s economy and fuel supply chain.
Beyond pricing issues, the Minister also drew attention to the critical condition of Nigeria’s oil pipelines, many of which have been in operation since the 1960s and 1970s. These aging pipelines, according to Lokpobiri, are highly susceptible to vandalism and crude oil theft, both of which have severely impacted the nation’s oil revenue.
“The old, corroded pipelines, some of which date back to the 1960s and 1970s, are easily vandalized,” Lokpobiri explained. He noted that the deterioration of these pipelines has made them vulnerable, allowing criminals to easily tap into them, leading to significant losses in crude oil and making transportation to terminals increasingly difficult.
The Minister’s remarks have sparked discussions within the industry on the need for urgent reforms in both the pricing and infrastructure sectors. With fuel smuggling and pipeline vandalism continuing to undermine Nigeria’s oil sector, stakeholders are now looking at possible solutions to safeguard the nation’s resources and ensure a stable supply of fuel.
