‘Fuel Smuggling Undermining Subsidy Removal’ – Adeniyi, Customs Boss

BY EGUONOODJEGBA

Comptroller General of Customs, Bashir Adewale Adeniyi has lamented that despite the laudable intention of President Bola Ahmed Tinubu’s government to do away with unnecessary wastages by capping the cost of fuel distribution with the prompt removal of the product’s subsidy upon assumption of office, smuggling of the product has posed significant threat to the realization of expected surplus income inflow into the government coffers.         The customs helmsman who was speaking in Yola, capital of Adamawa State Monday during a press conference to avail Nigerians of the negative impact of fuel smuggling across the nation, noted however that a petroleum task force, code name Operation Whirlwind, set up by the Nigerian Customs Service (NCS) is currently on top of the situation, taking the fight to the smugglers doorsteps.

He disclosed that the within two weeks of the setting up of the task force, it has intercepted a total of 129,185 litres of fuel with valued at N 90,558,685 within the north eastern region of the country.

The CGC explained that the federal government has also resolved to go after smugglers who have taken advantage of the relative cheap cost of the product in Nigerian compared to prices of fuel in neighbouring states within the sub region.

Adeniyi said while Operation Whirlwind leads the current onslaught against petroleum products smuggling, the Service in general will spare no effort in reversing the hitherto ugly trend by giving smugglers and anyone involved in its diversion and illegal movement a run for their worth.

Ejibunu, Coordinator Operation Whirlwind

Addressing the press, Adeniyi said, “Today, we are here to update members of the public on the strategic efforts of the Nigeria Customs Service (NCS) in addressing the critical issue of fuel smuggling through the recently launched Operation Whirlwind, under the auspices of the Office of the National Security Adviser (ONSA).

Compt. Cheda, Comptroller Enfrocement, Hqtrs

“About a year ago, the Federal Government made the bold strategic decision to remove the fuel subsidy. This crucial step was aimed at freeing up substantial funds that could be redirected to other productive sectors of the economy, reducing pressure on our foreign exchange reserves, and diversifying economic growth. The immediate impact was an upward adjustment in fuel prices to reflect current realities.

“Despite the inflationary pressures and financial strain on households, particularly those with lower incomes, comparative studies still show that fuel prices in Nigeria remain the cheapest compared to other countries in the West and Central African region.

“While Premium Motor Spirit (PMS) is sold at an average of N701.99 in Nigeria, it is sold at an average of N1,672.05 in the Republic of Benin and N2,061.55 in Cameroon. In other countries around the region, the price of PMS ranges from N1,427.68 in Liberia to N2,128.20 in Mali, averaging N1,787.57”, quoting open source fuel price data.

Continuing, he outlined the margin of fuel distribution as well as smuggling curve among notorious states believed to be heavily involved in the economic sabotage.“This comparative price advantage, while beneficial to our citizens, unfortunately creates a lucrative incentive for smuggling PMS out of Nigeria, where prices are two to three times higher. This claim is substantiated by the report on the average daily evacuation of PMS to various states in Nigeria, obtained from the Nigeria National Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

“The report shows significant changes in evacuation patterns that are not justified by corresponding economic and demographic changes, particularly in border states that share contiguous borders with our neighbours. Between April and May 2024, Borno and Kebbi States recorded 76% and 59% increases in evacuations, ranking among the top three states.

“On a year-on-year basis (May 2023 and May 2024), Sokoto and Taraba States recorded the most substantial increases in evacuations, with 247% and 234% increases, respectively. Border states like Katsina and Kebbi also recorded more than 50% increases in evacuation. These discrepancies, along with the price disparity between domestic PMS (N 701.99) and neighbouring countries (N 1,787.57), raise concerns about the actual delivery of PMS and the potential for smuggling. Moreover, credible intelligence on activities around border areas corroborates these suspicions.”

Speaking on the composition of Operation Whirlwind, he said: “In response to the alarming increase in fuel smuggling, the NCS in close collaboration with the NSA initiated Operation Whirlwind. This nationwide operation aims to:

1. Ensure that Nigerians enjoy the full benefits of fuel price deregulation in line with the vision of President Bola Ahmed Tinubu.
2. Defend the National currency and reduce pressures that may be attributed to the activities of smugglers. RESTRICTED
3. identify, dismantle and disrupt cartels of smugglers operating within the ecosystem.
4. Raise awareness of the local communities and solicit their support to achieve these objectives.

According to the customs boss, the framework of the new task force takes cognizance of critical clauses of the Customs Act 2023.

“Guided by credible intelligence and empowered by the new Customs Act 2023, the operation targets illegal exportation, particularly of petroleum products, ensuring their availability within the country and conserving government resources. Coordinated by a Comptroller of Customs, the operation covers all NCS Zones (A-D), involving selected officers trained and equipped to handle the task with strict adherence to professionalism. Collaboration with the Office of the National Security Adviser (ONSA) and the NMDPRA supports the operation, utilizing internal and external sources. This operation was launched approximately two weeks ago.

“The NCS is pleased to announce the significant strides made in the ongoing Operation Whirlwind, aimed at curbing the smuggling of Premium Motor Spirit (PMS) out of the country.

“In the past 2 weeks we have received credible intelligence on the relative stability of the price of PMS around border states, this is easily attributed to disruptions in the operations of smugglers. Within 7 days of intensive operations, a total of 150,950 litres of PMS, valued at N 105,965,391, have been intercepted at various locations nationwide.” Outlining the successes of the task force, he listed various seizures made by it and locations of seizure to include the following:

Friday 31 May 2024. A total of 45,000 litres of PMS in a tanker was seized at Mova, Adamawa; Saturday 1 June 2024. A total of 45,000 litres of PMS in a tanker was seized at Mubi, Adamawa; Monday 3 June 2024. A total of 2,375 litres of PMS in 95 25-liter jerrycans were seized at Mubi, Adamawa State; Wednesday 5 June 2024. A total of 4,450 litres of PMS in 178 25-liter jerrycans were seized in 3 different locations, including Song-Wuroboki, Mubi-Sahuda road and Gidan Madara – Sahuda road, all in Adamawa state.

Also on Thursday 6 June 2024, 20,030 litres of PMS in 25 and 30 litre Jerrycans were sized in various locations across the country including Maiha, Adamawa State, Illela, Sokoto and Agbaragba creek in Mfum border of Cross River State.

On Friday 7 June 2024 a total of 32,900 litres of PMS were seized at border locations in the North-east and South-west axis of the country; while a total of 17,500 litres was recoded in Mubi Adamawa state, and 15,400 litres recorded around Imeko-Obada Road in 616 25 Jerrycans.

In addition, seizures made on Saturday 8 June 2024 total 8,525 litres of PMS in 2 separate locations in Owode (Owode-Ilaro road and Owode-Atan road) in Ogun state.

“In addition to the ongoing operations under Operation Whirlwind, Customs Area Commands remain vigilant against the illicit activities of smugglers targeting petroleum motor spirit (PMS). The Service has recorded significant seizures of PMS from unpatriotic individuals attempting to deprive Nigerians of access to fuel and cause unnecessary hardship.

“While the operation continues, our Federal Operating Units and Marine Commands have intercepted a total of 129,185 litres of fuel valued at N 90,558,685. Notably, 54.48% of these seizures occurred in the North-West region, including states such as Katsina, Kebbi, and Sokoto, while 23.87% of the seizures were recorded in the North-Eastern part of the country, particularly in states like Taraba and Adamawa.

“It is worth noting that these states have also seen a significant increase in fuel evacuation as reported by the NMDPRA. It is now evident that the recent rise in the distribution of PMS to border states is driven by the activities of smugglers.

“A combine diversion of 280,135 litres of PMS N 196,524,075.50 raises serious economic concerns with broader implications on National Security. The quantum of this diversion is equivalent to more that 84% of the daily evacuation of PMS to states likes Ekiti and Jigawa. It also represents around 32.57% of the daily evacuation to the border states of Borno and Katsina according to the data on average daily evacuation obtained from NMDPRA.

“These activities, if left unchecked, could further deteriorate the country’s economic situation and exacerbate current foreign exchange challenges. The influx of unaccounted foreign currency could be channeled into funding illegitimate activities, including the support of non-state actors engaged in criminal activities against the Nigerian state.

“These issues have serious implications for national security, making it imperative to check, curtail, and dismantle these illicit operations. Achieving this requires the cooperation and collaboration of patriotic government agencies, exemplified by the ongoing Operation Whirlwind.”

Speaking further, CGC Adeniyi remarked that the task would produce the expected result through collaborative efforts of the entire national security architecture, which alone can close whatever gaps there are.

“Under this collaboration, efforts are being made to resolve existing gaps in the following areas:

1. Sharing of Critical Data Among Agencies. Ongoing engagement with the NMDPRA and the ONSA focuses on sharing daily data on PMS loading. This will enable the NCS to track the movement and delivery of these products to their intended locations.
2. Monitoring Movement of PMS Lifting. The NCS will enforce strict monitoring of tanker movements, ensuring that PMS products lifted from NMDPRA facilities are delivered to approved locations.
3. Use of Manual Systems by Independent Marketers. Independent marketers are advised to automate their existing fleet management systems to enable tracking and geo-fencing capabilities.
4. Proliferation of Fuel Stations at Border Areas. The NCS will collOffice of the National Security Adviser aborate with relevant licensing agencies to manage the proliferation of petrol stations around border areas.

He further explained that above  measures are essential and will be rigorously implemented to ensure strict adherence to government expectations; even as he assured border community citizens of utmost consideration by ensuring that only criminal elements are brought within checks, monitoring and questioning.

“However, in enforcing these measures, we are mindful of the potential challenges they may pose to border communities. Our operations will not obstruct or interfere with the legitimate activities of patriotic citizens in these areas.

“I will conclude with a stern warning to the perpetrators of these illicit acts: Desist immediately or face the full wrath of the law”, he said.