Why fuel smuggling thrives despite subsidy removal – Customs

The Nigeria Customs Service has shed light on the continued smuggling of petrol across the country’s borders, despite the elimination of fuel subsidies.

 

According to the Comptroller General of Customs, Adewale Adeniyi, the practice remains attractive to smugglers due to the stark difference in fuel prices between Nigeria and its neighbouring countries.

 

Speaking during the service’s first quarter performance briefing held in Abuja on Tuesday, Adeniyi noted that “Despite the removal of the fuel subsidy, it is still profitable for smugglers to take fuel illegally from Nigeria. You know that the prices are dynamic.”

 

He further explained that although Nigeria has ended its subsidy regime, the relatively lower pump price still incentivises illegal exportation of Premium Motor Spirit to countries like Cameroon, Niger, and the Benin Republic “Has remained profitable due to the price arbitrage”, he added.

Adeniyi highlighted that while the price of PMS within Nigeria ranges between N880 and N950 per litre, neighbouring countries are selling the same product for far higher amounts. “Is lower compared to around N1600 and N2000 per litre in Cameroon, Niger, and the Benin Republic,” he stated.

 

The Customs boss went on to stress that this significant price gap continues to fuel smuggling activities, even with some of these countries witnessing slight reductions in local fuel costs.

 

“While the price of the products is coming down to around N850 and N900 per liter in places like Cameroon, it is close to N2,000 per liter, in Niger, it is N1,600 per liter, and the same with the Benin Republic.”

 

In response to this ongoing challenge, Adeniyi said the NCS has initiated a special anti-smuggling operation. “This arbitrage provides the incentive. That is why we launched the operating Whirlwind,” he said.