Nigeria’s decision to scrap fuel subsidies in 2023 aimed to stabilize its economy, but a stubborn challenge remains: rampant cross-border fuel smuggling. The Nigeria Customs Service (NCS) recently unmasked the reasons behind this trend, pointing to stark price disparities and regional demand. Here’s a deep dive into the issue and the government’s countermeasures.
The Price Gap Fueling Smuggling
Comptroller General of Customs, Adewale Adeniyi, disclosed at a recent Abuja briefing that Nigeria’s petrol prices—even post-subsidy—are far lower than in neighboring countries:
- Nigeria: ₦880 – ₦950 per liter.
- Cameroon, Niger, Benin Republic: ₦1,600 – ₦2,000 per liter.
This “price arbitrage” (profit from price differences) incentivizes smugglers to illegally export Premium Motor Spirit (PMS) to these nations, where demand and limited refining capacity keep prices high.
Why Subsidy Removal Hasn’t Stopped the Trade
1. Lucrative Margins:Smugglers earn up to 100% profit per liter due to Nigeria’s lower rates.
2. Regional Reliance: Neighboring countries depend on smuggled Nigerian fuel amid poor local refining.
3. Dynamic Pricing: Adeniyi noted prices are “dynamic,” with Cameroon recently dropping to ₦850–₦900 per liter—still double Nigeria’s cost.
Customs’ Response: Operation Whirlwind
To combat this, the NCS launched Operation Whirlwind, a targeted crackdown on smuggling networks. Adeniyi emphasized that while price gaps persist, the initiative aims to disrupt supply chains through intelligence and border surveillance.
Challenges Ahead
- Porous Borders: Nigeria’s vast, poorly monitored borders enable illegal trade.
- Regional Coordination: Harmonizing fuel pricing across West Africa is critical to eliminating incentives.
- Corruption: Rogue officials aiding smugglers remain a hurdle.
Key Quotes from Customs Chief
“Despite subsidy removal, smuggling PMS remains profitable. The price difference is too significant for criminals to ignore.” – Adewale Adeniyi, Comptroller General of Customs
Conclusion
Nigeria’s subsidy removal was a bold economic step, but eradicating smuggling requires regional cooperation and stronger enforcement. As Operation Whirlwind unfolds, its success will hinge on tackling corruption and addressing the root cause: uneven fuel pricing in West Africa.
follow us for real-time updates.
Page manager
