Nigeria lost N178bn to petroleum products theft in 10 years

…40% of products stolen from pipelines Nigeria lost about N178billion from the theft of petroleum products from pipelines and jetties across the country between 2001 and 2010, according to the controversial Ribadu taskforce revenue report. The Mallam Nuhu Ribadu-led Petroleum Revenue Special Task Force, PRSTF, despite agreeing that it did not receive comprehensive figures documenting volumes of refined products stolen or spilled, disclosed that 3.2 million metric tons of petroleum products were stolen from the Nigerian National Petroleum Corporation, NNPC’s pipeline network between 2001 and 2010. The PRSTF, quoting the Pipelines and Product Marketing Company, PPMC, a subsidiary of the NNPC, further stated that the value of petroleum products stolen from pipelines network across the country between 2001 and 2010 is N178billion. The report said, “Stolen amounts appear to be growing; in NNPC’s submissions the Task Force was informed that about 40 per cent of products currently channeled through pipelines are lost to theft and sabotage. “Willful damage of downstream infrastructure has also spiked as of late. PPMC recorded 4,468 product pipeline breaks in 2011, 98 per cent of them from sabotage. This is a sharp increase over 1,746, the average number of sabotage cases logged between 2001 and 2010. “Organized theft of refined products also denies Nigeria significant revenues, though the Task Force did not receive comprehensive figures. PPMC values the products stolen from its pipeline network between 2001 and 2010 at N178 billion.” The PRSTF also bemoaned the fact that public officers connived with dubious importers to defraud the country, as it alleged that when products are stolen at ports and jetties, inspectors sign discharge sheets for the full landing amount, which allowed importers to collect fuel subsidy on stolen products. Stolen crude With regard to stolen crude, the PRSTF Report said unless something drastic is done to check leakages and the increasing rate of crude oil theft in Nigeria, especially through pipelines, the country’s gains from crude oil sales will continue to be eroded. The Task Force further revealed that currently, Nigeria is losing a huge chunk of revenue accruable from the petroleum sector, as about 40 per cent of petroleum products currently channelled through pipelines across the country are lost to theft and sabotage. This is in addition to theft of products recorded during the transfer of crude oil from terminals to refineries and from refineries to depots. Pipeline product losses, according to the report, has steadily increased over the years, thereby raising concerns as to why the Federal Government is not making gains from the sale of petroleum products refined in-country. “This is attributed mainly to losses incurred in the transfer of crude oil from the terminals to the refineries and transfer of products from the refineries to the depots. A further factor is the diminished capacity of the existing refineries due to lack of maintenance, obsolescence among others,” the report stated. “It appears small-scale theft and illegal refining are also becoming more decentralized and wide spread, though losses from such practices remain relatively small compared with the more sophisticated large-scale theft rings. “In one striking example of rising costs, NNPC data shows the value of stolen crude along the 60km Forcados-Warri refinery supply pipeline was 600 percent higher in 2011 than in 2010. Total losses were N60billion from this pipeline alone or N1billion of oil stolen per kilometer of pipeline. “These incidences of crude theft also delay realization of revenues by deferring production. Shell has declared force majeure on onshore liftings five times since early 2011, all reportedly linked to illegal bunkering. One December 2011 stoppage, allegedly caused by two failed pipeline taps, took a month to fix and deferred over 4 million barrels.”