Fuel denial cripples Nigeria’s border towns despite subsidy removal (1)

When the supply of fuel to communities 20 kilometres from the border was stopped in 2019, the government claimed this was to stop the smuggling of Nigeria’s subsidised fuel to neighbouring countries. Even with the subsidy now removed, the border communities remain cut off from the rest of Nigeria. Recently, BusinessDay visited some border communities and found that while millions of residents have been subjected to untold hardship, some filling stations given permission to operate (despite what should be a blanket ban), have in fact been selling fuel to suspected smugglers. And in broad daylight too.

Many school children now have to trek across several kilometres to go to school from one village to another, especially since June (after subsidy removal) when fuel became more expensive, and invariably the cost of transportation. Some have dropped out of school since their parents could no longer afford the fares for motorcycles, and for at least two men, their wives took their children and left them after losing their jobs. One of them, Moroof Tijani, worked at Asas Oil Nigeria Limited, which operated a filling station in Ilara, but shut down in 2019.

“My wife endured with me a little until things became too tough and she had to take three of our four children and leave,” says Tijani. “She has Japa,” he says, laughing, although one could sense the pain behind every enthusiastic gesture he makes. Japa is a popular slang to describe fleeing. Like Moroof, all those interviewed spoke Yoruba language and one spoke Egun.

Caption: Owode-Apa to Kankon Secondary School is 5.5 kilometers, and now costs N1,000 to/fro, so most students trek. It is the closest school too. Image: Google earth

 

If they didn’t know it before, for over four years, ordinary, powerless people in Nigeria’s border communities have been constantly reminded of where they belong in the Nigerian society, and the description isn’t flattering. Although these were once vibrant, thriving centres of commerce, the millions of residents have been used to various forms of government induced-suffering but the border closure of 2019 took things several notches higher. Not just for smugglers but also legitimate business people and millions of residents. The worst of this was stopping the supply of fuel to these areas.

“We are in severe discomfort, but the prayer is for God not to let us keep suffering,” says Victoria Ogunleye, the Iyaloja of Imeko. “But for now, we are in a lot of suffering”. Iyaloja is the title given to a female market leader in Southwest Nigeria.

When this reporter visited Seme and Owode communities in Badagry, Lagos State and Imeko, Ilara, and Idofa, in Imeko-Afon Local Government Area of Ogun State, the lamentations were the same despite being several kilometres apart.

 

“Let us agree that we are already suffering, but what of the children that we are bringing into this world, are they supposed to still meet all of this suffering as well?” asks a youth leader in Ilara, who gave his name as Eniolorunmo, an alias.

When the administration of former President Muhammadu Buhari stopped filling stations within 20 kilometres of the country’s land borders from receiving or dispensing fuel, the government’s logic appeared simple; they were the source of petrol smuggling and doing this would cripple their activities. With that decision, the Nigerian government suddenly stopped the supply of fuel to communities close to the borders with neighbouring countries.

At the end of 2019 when the supply of fuel to border communities was stopped, Nigeria’s petrol consumption was an average of 57.2 million litres daily. Three years later at the end of 2022, average daily consumption had risen to 66 million litres, according to data from NNPC, NMDPRA, OPEC, PPPRA and as reported by the media.

Despite cutting off millions of Nigerians from getting access to fuel in mostly remote communities where these fuels were actually the lifeblood for daily activities, Nigeria’s petrol consumption did not reduce, but instead, it increased. Clearly, the government either did not know the source of this smuggling or was incapable of addressing it. What has been clear in four years of the blockade has been the hardships that these residents of border communities have been subjected to.

“Those at the fuel depots know how many tankers are loaded and supplied to different states across Nigeria, so the government is complicit in enabling those who are smuggling the fuel out of Nigeria,” says Ezekiel Bamgbose, popularly known as Apari in Imeko and surrounding communities.

Caption: Fuel is sold in bottles of 1 litre each at N1,000 against about N600 at filling stations Photo by: Caleb Ojewale

 

By the Nigerian National Petroleum Corporation’s (NNPC) own admission, over 20 million litres of petrol is smuggled outside Nigeria daily, as reported by BusinessDay. As at October 2022, Nigeria had spent N7.2 trillion (about $16 billion at official rate at the time) on fuel subsidy payments.

Yet Nigeria remains chronically indebted ($113 billion at the time of this report). Every year, the subsidy payments deprived the government of funds for other critical aspects of the economy and wellbeing of the populace. At some point, it was said the country was even borrowing to sustain the costly subsidies. Yet, much of the subsidised fuel in Nigeria found its way to neighbouring countries where it was more expensive and created an opportunity to make obscene profits. Albeit at the expense of Nigeria’s fragile fiscal condition.

“Ever since supply of fuel to border communities was stopped, it did not stop the smuggling, it still occurred every day. If you had come at night, we would stand by the road and see how fuel is loaded and moved through to the borders,” says Sulaimon Abiola, a businessman in Imeko. “It was only when subsidy was removed and fuel became expensive that smuggling was reduced.”

On May 29, 2023 when the incumbent President Bola Tinubu was giving his inaugural speech, he declared that “subsidy is gone”. The following day, fuel prices jumped across the country. That month (May), average daily consumption was 66.6 million litres, but by the following month (June), consumption had dropped to 49.5 million litres.

Now that subsidy, which had been described as the actual incentive to smuggle fuel from Nigeria has been removed, the supply of fuel to border communities remains prohibited. Yet, while focus has been more on smuggling of petrol, no other type of fuel also gets to these communities; no kerosene, no petrol, no diesel.

Since many of these are rural settlements that lack electricity and depend on generators, absence of fuel supply has put them in darkness. They also cannot pump water, or use grinding machines (to process food), or any of the several things they need fuel to power to make their lives slightly more liveable. There is also no kerosene for them to cook.

In Nigeria, there are over 2,000 border communities located in 105 local government areas in 21 states of the federation, according to the Border Communities Development Agency (BCDA). Statistically, about 13 percent of Nigeria falls within those border communities, but this hasn’t stopped them from being treated like outcasts as most people interviewed say they feel.

“When it is election season, politicians come in large groups to campaign to us. They will deceive us and after we vote for them, they will discard us,” says Sunday, a businessman in Ilara also called Upsunny (his business name). “They will tell us we are by the border. But when they needed our votes they knew to come here and canvass for those votes”. His business of supplying building materials has collapsed for over two years now. This was after one of his consignments was confiscated by the Customs while in transit from Abeokuta (in Nigeria) to his village Ilara (also in Nigeria).

For now, he is done. “It is when someone has eaten and he’s strong that he will think of investing or putting capital into business,” he says.

Selective permission to shady filling stations

The stoppage of fuel supply to the border communities did not only come with pain and suffering for rural dwellers, it also came with a dose of Nigeria’s signature corruption, manifested through arbitrary monopolies and permissions.

Read also: Fuel subsidy gulped over N4trn in 2022 – NMDPRA

While the government has officially banned the supply of fuel to border communities and filling stations operating there, a few (in Lagos) were in fact ‘licensed’ to continue selling. They were supposedly given strict instructions not to engage in illegal activities.

Except as this reporter would find, not only were they selling fuel higher than the pump price in the state, they also sold mostly to those said to be smuggling them out of Nigeria. The irony. Two of such filling stations were Luri Oil in Owode and AP at Ashippa towards the Seme border.

When asked to enter the filling stations for a refill, the motorcycle rider conveying this reporter across the different communities, said it was pointless. “You see those buying in there, they are bunkerers (the local description for fuel smugglers),” he said, “The filling station attendants already have their names and will not sell to anyone else.” As at that day, Luri Oil was selling petrol at N700 per litre, while the AP filling station sold at N750 per litre. Other sources would later corroborate this claim.

Caption: Suspected smugglers bring multiple gallons to purchase fuel at Luri Oil, one of three filling stations permitted to sell, while 165 remain shut in the Badagry area. Photo by: Caleb Ojewale

 

Motorcycles and rickety cars loaded with several gallons could be seen at both filling stations, which are among nine reported to have been given waivers by the Nigeria Customs to sell fuel within the banned areas. At the time of this reporter’s visit, only three filling stations were said to still be operating.

According to one report, Chedi Wada, in his capacity as acting customs area controller, had in 2020 warned the nine filling stations permitted against sharp practices. “The nine marketers should count themselves lucky that they were selected to resume selling petroleum out of 168 filling stations in Seme, Gbaji, Apa, Kweme and Owode border areas,” the article by Sweetcrude reports had said.

However, not only were few given a monopoly to operate while others rot away, those permitted, as witnessed by this reporter, were selling in large gallons (which was not supposed to be allowed), and worse still, to suspected smugglers. In all of these, the dwellers of these communities continued to suffer while businesses died, one after the other.