Border closure: Nigeria saves N2b daily from smuggled 10 million litres of petrol

• Smuggling Can Be Curbed Without Border Closure — Ajibola
•Border Closure May Hinder Legitimate Businesses – Olawuyi
• Nigeria needs Appropriate Pricing System Of Petrol, Akpan insists
•Exercise To Continue Indefinitely
• Action Buoys Local Economy, Improves Security — Customs
• 289 Illegal Migrants Arrested

Over 10 million litres of Premium Motor Spirit (PMS), better known as petrol is now being saved due to the ongoing partial border closure ordered by the Federal Government codenamed “Exercise Swift Response.”Apart from the tremendous success the restriction of free movement across Nigerian borders has recorded, as well as curtailing disorderly acts, it has also come with equal measure of agony to citizens, just as it poses serious threats to other genuine businesses.

Also, the Nigeria Customs Service (NCS) says the border restriction has achieved a lot, in addition to the borders now being fully secured, while smuggling has been reduced to the barest minimum.According to the Petroleum Products Pricing Regulatory Agency (PPPRA), prior to the closure of the borders, the country’s daily consumption of petrol was approximately 61 million litres, which has now reduced to 51.7 million as indicated in its latest figures, which was obtained between September 9 and 15.

The spokesman of the agency, Kimchi Apollo, who disclosed this in Abuja, yesterday, said, “according to statistics, figures recorded from various depots nationwide for the 5th to 11thAugust 2019 was about 61 million litres, representing the average volume trucked out before the border closure.”

Apollo, who is also the General Manager, Corporate Services of PPPRA, added that the agency observed that from the statistics obtained between August 12 and 18, 2019, a drop of about 35 percent in volume trucked out from the previous week was noticed, which could be attributed to the reduction in activities of various facilities during the Sallah holiday.

However, he added that from August 19 to 25, 2019, which falls within the period the borders were partially closed, the agency recorded an average daily truck out figure of about 57 million litres, which fell below the daily average figure for the week 5 to 11 August 2019.

“Similarly, from August 26 to September 1, 2019, 371.82 million litres of petrol was trucked out, averaging a daily figure of 53 million litres. This represents a decline of about four million litres when compared to the previous week.

“Available data from the Agency indicates that the downward trend continued from September 2 to 8. The daily average truck out figure for that week was 50.22 million litres, indicating a further reduction of 2.9 million litres.

However, there was a slight increment to 51.7 million from the September 9 to 15, 2019,” he explained.Apollos said the high truck-out volume recorded before the partial closure of the borders could be attributed to the seepage of petroleum products across the borders, coupled with the widening fuel price arbitrage with neighbouring West African countries.

Said he: “While the downward trend in the consumption pattern is a welcome development, the agency assures stakeholders that efforts are being made not only to curb smuggling of products, but also to ensure that petroleum products are available in the country.”

The landing cost of petrol in Nigeria reportedly stands at N180 per litre, that is N35 higher than the pump price of N145 per litre. When put in context of the landing cost, Nigeria may be saving as much as N1.98b (approximately N2b) daily on account of the PMS, which would have been smuggled out.Similarly, the development translates to about N385m worth of subsidy, which is being lost to neighbouring West African countries daily.

While Nigeria was about two years ago consuming about 35 million litres of petrol per day, the figure jumped up and soon hit 65 million litres per day. The Nigerian National Petroleum Corporation blamed smugglers for the high consumption, stressing that the product was being smuggled to as far as Burkina Faso, Mali, and Cote d’Ivoire because of the price differences.

SPOKESPERSON of the NCS, Assistant Controller-General (ACG) Joseph Attah, informed The Guardian, yesterday, that the Exercise Swift Response has achieved “a significant increase in patronage of local rice and that indigenous farmers and millers are now smiling to the bank. Actions, movement and smuggling of illicit items that could easily compromise national security and economy have been nipped in the bud,” he added.

On why the exercise, which was meant to last for about four week was yet to be called off, Attah said: “We have never set a timeline from the beginning. As the spokesperson for the team, I cannot remember giving anybody a timeline for the action.”

Denying that operatives were undergoing dire challenges as a result of the extension of the joint exercise, the spokesperson said, “for now, the operatives are not experiencing any technical challenge at their stations as they carry out the enforcement order successfully.

“Earlier, there were mixed feelings among Nigerians. Now, we are experiencing better support from border community dwellers, and Nigerians are beginning to appreciate why we are doing the exercise. Things are getting better, for instance, we have so far arrested 289 illegal migrants and you can just imagine the consequences of this. Imagine if only 80 from the 289 people were coming to Nigeria to cause havoc. We have also intercepted bags of fertiliser, and hundreds of bags of rice, among others.

The Guardian learnt that smugglers have resorted to using the waterways for their nefarious acts as a source said that smugglers now use the Isashi Jetty, Ijanikin water route, Agbara area, and Vespa to smuggle in contraband in the dead of the night. “Come to Ishashi Jetty or Ijanikin Jetty behind Customs Check Point, Agbara bridge by 5am, then you will realise that we are deceiving ourselves. Some officers are being enriched by the restriction. My neighbour at Vespa market told me how they are being escorted by the same security agencies after they have been settled,” the source said.

But the Customs Area Controller (CAC), Western Marine Command, Comptroller Boyiliya Binga, said his men were determined to deal ruthlessly with smugglers. He said, because of the closure of the border, some of the smugglers have taken the bar beach as their new route to smuggle in contraband items.Binga, however, noted that since the smugglers are now using the high sea, his men would take the battle to them down there.

STAKEHOLDERS, including the former President, Nigerian Association for Energy Economics (NAEE), Wunmi Iledare are insisting that the partial border closure would not bring an end to smuggling of petroleum products out of the country, adding that there was need for effective management of petroleum flow. Iledare said: “Of course, the solution is enforcing the rule of law. Petroleum is an intergenerational asset. Stop the making of millionaires through product allocations to celebrated traders with no risked dollar investment.”

With such development, Iledare noted that traders would stop dispensing products across the borders as, according to him, access to markets outside Nigeria is prompted by the high price differential. “Once this is corrected the border can be as porous as a sponge, petroleum product would not flow out there.”

A professor of law with expertise in petroleum, energy and environmental law, Damilola Olawuyi equally insisted that the border closure may not achieve significant long-term results in terms of addressing smuggling of petrol and other goods.

According to him, without cautious move, the government may end up stifling and hindering legitimate businesses that go through the borders doing genuine economic activities. Olawuyi noted that a holistic reform was required to achieve greater transparency and digital surveillance in the country’s petroleum products exportation system.

“Rather than closing the borders, countries such as Ghana and Kenya that had the same problem in the past have made significant progress over the last years through a mix of increased coordinated security surveillance at border points, as well as robust policy guidelines aimed at curbing illegal activities of unscrupulous individuals and companies.

“Some of the guidelines include the designation of one exit border for all petroleum product exports; having designated days for export loading; establishing compulsory export licensing and customs clearance process to formalise and regulate the export of petroleum products, and ensuring that oil exports and bunkering are only carried out by companies licensed by the DPR.

“Furthermore, verification and registration of documentation on vessels, bunkering companies, and point of delivery, through robust digital linkages to DPR, and other revenue agencies can significantly reduce illegality and leakages,” the don said.

The former Director General of the West African Institute for Financial and Economic Management (WAIFEM), Professor Akpan Ekpo corroborated Olawuyi’s claim that the partial border closure would only bring short-term relief.“Border closure helps, but the best approach is appropriate pricing of the products to discourage smuggling,” he noted.

In his own reaction, the ex-president of the Chartered Institute of Bankers of Nigeria, Prof. Segun Ajibola corroborated other stakeholders noting that the more fundamental issue revolves around the compromises by those manning the borders.

MEANWHILE a former President of Petroleum and Natural Gas Senior Staff Association (PENGASSAN), Peter Esele has urged the Federal Government to adopt a “gradual upscale” of petroleum price to stabilise the economy.

Esele said: “I think Nigeria should adopt a gradual upscale of petroleum price. Government must tell Nigerians how it intends to spend the money that will accrue from stoppage of subsidy payment. That is what is making most Nigerians uncomfortable, especially the labour movement. Labour has not gotten a template for that. How will Nigerians feel when they see lawmakers collecting about N13m a month as salary, or see 10 cars in the convoy of ministers and governors terrorising motorists on the road? Government will have to come up with a template on how it intends to check the extravagant lifestyles of its officials. They cannot tell us to tighten our belts while they have theirs loosened.”