The Federal Government’s approval of an automated fuel system management and censor network aimed at tracking petroleum products movement across the country is cheering. The plan will gulp N17 billion. Apart from ensuring order in the fuel distribution system, it will also determine the quantity of fuel consumed in the country as well as eliminate fuel subsidy scam.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who disclosed this at the end the Federal Executive Council (FEC) meeting, said the move was an initiative of the Petroleum Equalisation Fund (PEF). Though the Act establishing the PEF mandates it to oversee the reimbursement of petroleum marketing companies for any losses arising from the sale of petroleum products at uniform prices throughout the country, Kachikwu explained that the agency was also conceived to assist in revealing the exact litres of petroleum being consumed in the country every day. According to the Minister, the adoption of the PEF initiative became necessary in view of the discrepancies in figures being bandied as daily consumption of petroleum products in the country.
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The discrepancies have affected subsidy payments and remittance to the Federation Account as stipulated in Section 162(1) of the Constitution. The fuel tracking device will reveal the accurate figures of fuel consumption. For instance, there is a huge discrepancy between the figures by the independent oil marketers and those from the Nigerian National Petroleum Corporation (NNPC). While the NNPC claims that daily petrol consumption in the country is between 70 million and 80 million litres, private oil marketers say it is between 30 million and 40 million litres.
The Minister is optimistic that when the technology-driven tracking system becomes operational, every truck conveying fuel in any part of the country will be licensed with a driver and transport company. This is with a view to finding the transporter and holding the company liable for any missing truck. The NNPC and two of its subsidiary companies, the Department of Petroleum Resources (DPR) and the Petroleum Products Pricing and Regulatory Agency (PPPRA), are expected to collaborate in order to achieve the objective.
Considering the hefty amount government often pays as subsidies, especially during periods of fuel scarcity, the fuel tracking technology should be given a chance. It is heartening that President Muhammadu Buhari has approved the plan to track the movement of refined petroleum products from the trucks till the products are discharged into the storage tanks for the filling stations. Nigerians expect positive results from the plan. Anything less will amount to a wasteful expenditure. We also expect that the tracking will help keep proper data repository of fuel consumption in the country.
While we call for a more comprehensive plan in the downstream petroleum sector, the fuel tracking system should collaborate with the indigenous biotechnology centre capable of detecting stolen crude. The technology was unveiled last year by the Minister of Science and Technology, Dr. Ogbonnaya Onu.
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Available statistics show that Nigeria loses over 250,000 barrels of crude oil per day to oil thieves. This translates to over $25 million daily in revenue. Oil theft remains one of the biggest illicit businesses in the oil-rich Niger Delta.
We expect that the fuel tracking device should be an enduring, error-proof technology that will put an end to the controversy about how much fuel is consumed in the country. Therefore, a good innovation that will accurately and effectively monitor fuel distribution system will be a welcome relief.
It will also bring transparency and accountability in the nation’s petroleum sector. As a major oil-producing country, Nigeria is long overdue to embrace innovations that will drastically reduce corruption in the petroleum products distribution chain.