PPPRA: Daily Petrol Usage Drops to 50m Litres after Border Closure

Mele Kyari
  • Blockade threatens ECOWAS, AfCFTA agreements, says Oyebode

Tobi Soniyi, Gboyega Akinsanmi in Lagos and Chineme Okafor in Abuja

The Petroleum Products Pricing Regulatory Agency (PPPRA) disclosed yesterday that the country’s daily petrol consumption dropped from about 61 million litres to 50.22 million litres following the partial closure of Nigeria’s western border with Benin Republic.

But a Professor of International Law, Akin Oyebode, said the sudden decision by the federal government to close the border with members of the Economic Community of West African States (ECOWAS) violated the letter and spirit of the regional institution as well as the African Continental Free Trade Area (AfCFTA).

PPPRA said between August 5 and September 8, it observed a marked reduction in the volume of petrol trucked out from inland depots to various parts of the country, where they were needed.

“The Petroleum Products Pricing Regulatory Agency (PPPRA) has observed with keen interest the Premium Motor Spirit (PMS) supply trend since the partial closure of the country’s border, as indicators point to the gradual reduction in the volume of PMS trucked out,” a statement signed by PPPRA General Manager, Corporate Services, Kimchi Apollo, said.

President Muhammadu Buhari had recently ordered a partial closure of Nigeria’s border with Benin Republic, mainly to check the smuggling of rice into Nigeria and restore government’s support to rice farmers, which was reportedly affected by rice illegally brought in through the borders.

Days after the border closure, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, claimed that there were reductions in the volume of petrol trucked out from the depots. Kyari noted that the development was being followed up.

PPPRA stated that the records it got from various depots nationwide showed that from August 5 to 11, the volume of petrol trucked out was about 61 million litres, representing the average daily volume trucked out before the border closure.

It explained that between August 12 and 18, there was a drop by about 35 per cent in the volume of petrol trucked out, from the previous week, which it added could be attributed to the reduction of activities at various facilities during the Moslem Sallah holiday.

The statement said, “However, from the 19th to 25th August 2019, which falls within the period in which the borders were partially closed, the agency recorded an average daily truck out figure of about 57 million litres, which falls below the daily average figure for the week 5th to 11th August 2019.

“Similarly, from 26th August to 1st of September 2019, 371.82 million litres of petrol was trucked out, averaging a daily figure of 53 million litres. This represents a decline of about four million litres, when compared to the previous week.”
The statement said available data indicated there was a downward trend in the volume of daily consumption from September 2 to 8, noting, “The daily average truck-out figure for that week was 50.22 million litres, indicating a further reduction of 2.9 million litres.

“The high truck-out volume recorded before the partial closure of the nation’s borders could be attributed to the seepage of petroleum products across the border, coupled with the widening fuel price arbitrage with neighbouring West African countries.”

PPPRA described the downward trend in the consumption pattern as a welcome development and said efforts were being made to curb smuggling of petrol across the borders and guarantee availability of petrol.

However, speaking on the implication of the border closure, Oyebode cited Article 3 of the Revised Treaty of the Economic Community of West African States, which stands stoutly against such a move. The Article provides as follows:

“In order to achieve the aims set out in the paragraph above, and in accordance with the relevant provisions of this Treaty, the Community shall, by stages, ensure;

“a) the harmonisation and coordination of national policies and the promotion of integration programmes, projects and activities, particularly in food, agriculture and natural resources, industry, transport and communications, energy, trade, money and finance, taxation, economic reform policies, human resources, education, information, culture, science, technology, services, health, tourism, legal matters;

“b) the harmonisation and coordination of policies for the protection of the environment;

“c) the promotion of the establishment of joint production enterprises;

“d) the establishment of a common market through:

“i) the liberalisation of trade by the abolition, among Member States, of customs duties levied on imports and exports, and the abolition among Member States, of non-tariff barriers in order to establish a free trade area at the Community level;

“ii) the adoption of a common external tariff and a common trade policy vis-à-vis third countries;

“iii) the removal, between Member States, of obstacles to the free movement of persons, goods, service and capital, and to the right of residence and establishment.”

Against this backdrop, Oyebode explained that the closure of the border was worrisome because “it not only violates the ECOWAS Protocol on Free Movement of Persons, Capital and Establishment, it is also against the spirit of the AfCFTA, which Nigeria signed not too long ago.”

He described AfCFTA as a very interesting instrument, which envisaged the coming together of nearly one billion people, adding that it has tremendous potential to consolidate the movement towards an economic union of Africa.

The don advised that whatever action Nigeria “takes should be guided by the important role it plays within the continent.
“With our tremendous population and industrial potential, we should not act contrary to the interest of Africa. On the one hand, we might be complaining about how South Africa maltreats Nigerians as if we were longer members of the same continent. In the same token, we have to deprecate measures that are antithetical or counterproductive to the interest of Africa.”

Though he admitted that Nigeria might have reasons to react the way it did, because of the heavy toll of counter-trading or parallel trading with respect to rice and other commodities, which Nigeria wanted to prevent.

“Having made our point, we have to cut our losses and review and revise our options in terms of porous borders of Africa, especially Nigeria vis-à-vis Benin Republic, Niger Republic, Chad and Cameroun,” he said, adding, “As we always say, you cannot choose your neighbour; it is only your friends you can choose. Without Nigeria, Benin Republic is out of scene. So, we have to bear the ramification of the role of Nigeria within the continent in mind.”

Oyebode stated that there was no sanction for the closure of borders, because it was borne out of economic necessity or the necessity to curb parallel trade.

According to him, “The only thing the other parties can do is reprisal action. They, too, can take measures to ventilate their grievances. Nigeria and Benin Republic are not on equal key. Because of that, the extent to which Benin Republic can invoke nuisance value against Nigeria is severely circumscribed.

“So, Benin Republic has to keep appealing to Nigeria because of the asymmetrical nature of our relationship. You can see what is going on between United States and China in terms of sanctions and increase in tax on goods coming in.
“Every country reserves the right to maximise its interest. So, technically, apart from the act of retaliation or act of reprisal, there is very little that Benin Republic can do.

“The matter can be raised at the level of ECOWAS. But as you know, Nigeria is the bankroller of ECOWAS. Nigeria is the main actor in ECOWAS. So, member countries, which feel aggrieved, can raise the issue at their summit. That is perhaps all they can do.

“They cannot invoke sanctions against Nigeria, because they lack power and they lack wherewithal. It is almost a one-way road or one-way trade. Nigeria calls the shots. The others are recipients or victims of Nigeria’s policy shift.”

Also speaking, Dr. Chidi Odinkalu of the Open Society Justice Initiative said Nigeria could have its way because of its huge economic influence. But “no one is an Island,” he warned, stressing, “If Nigeria gets away with this without necessarily following due process or justifying its rationale in treaty obligation, then a precedent is set which could rupture the regional system.”