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Nigeria recovers N86.2B in stolen oil

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By Abraham Adekunle

As crude oil theft affects the economy, NSCDC and Customs recovers stolen oil.

As Nigeria’s economy continue to take a hit due to oil theft, various government security agencies operating in different parts of the country have recovered stolen oil worth N86.2 billion in the month of August. On Monday August 22, 2022, 16,000 liters of diesel valued at N800 per liter (totaling N12.8 million) were reported to have been recovered by members of the Nigeria Security and Civil Defense Corps (NSCDC) in Cross Rivers State. The NSCDC Commandant, Samuel Fadeyi, told the press that the stolen Automotive Gas Oil (AGO, also known as diesel) were recovered within the last two weeks.

Also, on August 17, 2022, the Seme Area Command of the Nigeria Customs Service (NCS) reported that it intercepted almost 4000 (30-liter) jerry cans of Premium Motor Spirit (PMS), which is equivalent to 119,940 liters. The Customs Area Controller, Bello Mohammed Jibo, said that the products were about 4 tanker loads of 33,000 liters each. If the approved price of N191 per liter of PMS by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is to be considered, Nigeria would have lost an estimated N161 million had the 119,940 liters made it to the Republic of Benin, where it was headed. The seized petroleum product had a Duty Paid Value of N28.9 million.

FG has spent Trillions on subsidy in the past 15 years.

Unlike in Nigeria where the Federal Government subsidizes petrol, a liter of petrol (PMS) is presently being sold in the Republic of Benin at N396. If the 119,940 liters had arrived safely, it would have been sold for at least N47M. Between 2006 and 2018 alone, FG spent the sum of N9.84T on petrol subsidy. As of 2022, N4 trillion more had been spent. A report in the media in July had estimated subsidies on petrol at N2T in seven months. A source had hinted that although Nigeria uses 60M liters of petrol per month, marketers had allegedly been loading up to 106M liters monthly as of April, smuggling about 46M liters of petrol monthly.

In the past week, the Nigerian Navy confirmed the arrest of a supertanker, MV HEROIC IDUN, by forces of Equatorial Guinea over alleged crude oil theft in Nigeria. The tanker was arrested after it fled from Nigeria’s AKPO Oil Field when its illegal activities were discovered by the Nigerian Navy. The supertanker’s International Maritime Organization number is 9858058 and it had the capacity of 299,995 metric tons (MT). A metric ton of crude oil contains a little over seven barrels. This means that the capacity of the tanker is about 2.1M barrels.

Nigeria would have lost N86.2 Billion in August alone to oil theft.

As of the time of the reports in the last week, Brent International sold at $96 per barrel. Bonny Light, which is Nigeria’s crude oil grade, usually sells for $1 above Brent. Assuming Bonny Light was $97 per barrel as of the time the reports were made, 2.1M barrels would have been sold for $204M, the equivalent of N86B. If the N161M that would have been made from the PMS seized at Benin Republic and the N12.8M from the recovered 16,000 AGO in Cross Rivers are added to the N86B intercepted by the Navy, Nigeria would have reportedly lost N86.2B to oil theft in August 2022 alone.

The spokesperson for the Major Oil Marketers Association of Nigeria (MOMAN), Clement Isong; president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Elder Chinedu Okoronkwo; and the National Operations Controller, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Mike Asatuyi, had defended their members against claims of being partakers of smuggling petrol to neighboring countries. When he was asked about the impact of FG’s continuous payment of subsidies, a former chairman of MOMAN, Tunji Oyebanji, said, “It is definitely not a good thing to use all revenue to service debts, and those debts are coming from subsidies. It is a potential danger for the country.”

Prof. Olafuyi says 2000 trucks of oil are lost daily in Nigeria.

The chairman of Society of Petroleum Engineers (Nigeria Council) and professor of Petroleum Engineering at the University of Benin, Olalekan Olafuyi, told the press that 2000 trucks of crude oil are lost in Nigeria daily. He said, “Crude oil theft is a bad omen for the country. The Society is already discussing with NIMASA to see how we can strategize in terms of telling them the strategy that can be employed in monitoring production, because crude oil theft is quite huge. Imagine the country losing 500,000 barrels per day. One barrel is about 160 liters. One truck or tanker is 250 barrels. So, if you say we are losing about 500,000 barrels, you can imagine that we are losing about 2000 trucks every day.”

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