90% of crude oil vandalize – PENGASSAN …warns Petroleum products scarcity can lead Nigeria to another recession

The Petroleum and Natural Gas
Senior Staff Association of Nigeria (PENGASSAN) has raised the alarm that from October 2021 to February 2022, between 90 – 99% of crude oil pumped into the Trans National Pipeline (TNP) by operators is vandalized. 
Addressing journalists at a world press conference inin Lagos, President of PENGASSAN, Festus Osifo 
lamented that the issues of crude oil theft have been exacerbated in recent times. 
This, he noted has made Nigeria lose out on accruing more revenue in spite of the current high price of crude oil in the international market. 
“We currently produce an average of 1.2 to 1.3 million barrels of crude oil daily from a capacity of about 2 million barrels of crude oil per day. 
Reconciliation/Fiscalization at Bonny terminal shows that between 5 – 10% of crude oil metered from the operators gets to the terminals,” he said.
Osifo said another problem arising from vandalism is that companies are forced to go into curtailment when these assets/export pipelines are damaged as they cannot export what they produced, thereby incurring production losses. 
He stated that an operator loses an average of 10 days of production shut-in every month due to vandalism.
He said, “Recent preliminary work showed that about 150 illegal tappings were used in siphoning crude oil from the TNP. 
“This has forced all operators injecting crude into the TNP to suspend export/injection thereby shutting-in production. TOTAL Energies and SPDC for example stopped production into the TNP pipeline while Agip ENI declare force majeure on their brass terminal.
“Beyond the reduction in revenue to the operating companies and the country, this act of sabotage has caused serious environmental degradation to the host communities and region. The health implication of this unholy act will be monumental in years to come.” 
As a matter of urgent national importance, the Association charged the Federal government to work with stakeholders in the oil and gas industry as well as the national security architecture to find a lasting solution to this menace that is almost bringing the oil and gas industry to its knees. 
He said, it is the union’s expectation that the pipelines integrity will be sound enough to enable safe transportation of crude and products all over the country, while Government establishes a special force committed to strict enforcement of Pipeline Right of Way. 
He added, “Pipeline installation can now be done using state-of-the-art technology in a manner that will be inaccessible to vandals. 
“We expect that the managers of the pipelines imbibe the culture of regular maintenance while the government will live up to its responsibility of providing adequate security.”
On the persistence fuel scarcity and high prices of Petroleum products in the country, PENGASSAN warned that it can lead to another round of recession if not curtailed early.
“Should this abnormality and distortion continue, it has the ability to drive the country into another round of recession and further impoverish the already battered citizens,” he warned.
He traced the origin of the current scarcity to the low quality of PMS imported into the country, later to the hoarding of products by marketers and lastly to the refusal of tanker drivers to transport products to different part of the country.
“We wish to empathize with the masses of our dear country during this phase of our national life and urge the Ministry of Petroleum, Nigeria Mid, and Downstream Petroleum Regulation Authority (NMDPRA), NNPC Ltd., MOMAN, DAPMAN, IPMAN, and all other stakeholders in the supply and distribution value chain of the industry to double their effort in putting this incessant queues to an immediate end while ensuring that citizens pay the approved price of PMS in all parts of the country,” he said.  
Osifo noted that the Association is worried about the high price of Kerosene, cooking gas, aviation fuel and diesel, stating that the fact that these products have since been deregulated does not give marketers the opportunity to exploit Nigerians. 
He said, “The regulator of the downstream sector of the industry must ensure that Nigerians are not exploited. Although the increase in the price of crude oil in the international market is partly responsible for the surge; from our findings, the non-availability of foreign exchange at CBN rate to marketers, is largely responsible for the increase as they source FX from the parallel market. “This is without prejudice to the activities of unscrupulous marketers that are bent on milking Nigerians dry.” 
As part of solutions to the problem, the union urged the Federal government to remove all forms of taxes and levies from the importation of petroleum products. 
The President stated, “The Nigeria Liquefied Natural Gas and other gas producers should be mandated to focus much more on domestic gas production. “Efforts should be intensified to fast-track the current rate of rehabilitation of the nation’s four refineries to guarantee energy security why on the short term, make FX available to the importers at the official rate.”