According to information released on Tuesday from the Federal Ministry of Petroleum Resources, the Federal Government spent over N173.2 billion between 2019 and 2022 to equalize more than 11.6 billion liters of Premium Motor Spirit, also known as gasoline.
The Federal Government implements PMS price equalization through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The NMDPRA does this by paying marketers for trucking petroleum supplies to filling stations throughout Nigeria.
According to a document Newsmen acquired from the FMPR in Abuja, almost N173.2 billion has been spent to equalize the price of gasoline across the country as of 2019.
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However, outside of Lagos and Abuja, the pricing of the item has scarcely been comparable among states despite the hundreds of billions spent on PMS price equalization.
For instance, the price of gasoline currently ranges between N179 and N180 per litre at mega stations run by large marketers in Abuja and Lagos, but it typically costs more than N250 per litre in many independent retail locations in other states.
Since one virtually ever finds the commodity at the same price in all 36 states and the Federal Capital Territory, the price difference across states has persisted for years.
In fact, the cost of PMS is more than N200 per litre in some retail establishments run by independent marketers in big cities like Abuja and Lagos, compared to the allowed rate of N179-N180 per litre.
However, this is true even when the government has distributed money from the equalization fund.
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The Minister of State for Petroleum Resources, Chief Timipre Sylva, reported in the document that a total of 255,659 truck-outs were equalized during the review period as part of measures to abolish the smuggling of PMS across Nigerian borders.
He said “11,622,926,494 litres (of PMS was) equalised. N173,200,284,779 (approx.) equalisation paid. 1,277 supplying vessels tracked. 25,525,688,042 litres of total PMS discharged.”
The average daily sufficiency for PMS at that time, according to the ministry, was 66.7 million liters, and the total volume of truck-outs was 24,346,614,589 liters.
He added that the FMPR’s goal was to assure energy security in terms of power and petroleum products as well as a decrease in the amount of PMS being smuggled using more advanced technologies.
Others include employing PMS equalization to narrow cost differentials and to routinely track petroleum product cargoes from beginning to end using Lloyds List Intelligence and Refinitiv.
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However, according to Sylva, the main obstacles to meeting these goals were market violations, defaulting marketers, delays in out-turn form filing by marketers, variance in arrival/discharge quantities, and operators’ sly behavior.
Regarding the assistance needed, he stated that the supply value chain activities for petroleum products near the border needed to be fully automated, existing policies needed to be reviewed, regulations needed to be strictly followed, and there needed to be strong inter-agency collaboration and transparency.
The document on the gas flare commercialization initiative indicated that 48 flare sites had been identified by the government, and that they will be allocated this year.
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“48 flare sites have been identified. Six of them have been taken out of the basket because they are not commercially viable (because the flare volumes are minimal). The plan is that these flare sites will be allocated by Q4 2022,” the petroleum ministry stated.
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