The Nigerian National Petroleum Company (NNPC) Limited has revealed that petrol smugglers earned as much as N17 million per truckload when smuggling fuel to neighbouring countries.
Speaking to journalists in Abuja about the government’s efforts to reform the oil and gas sector, Mele Kyari, the group chief executive officer of the NNPC, highlighted how subsidy-fueled smuggling was rampant, with smugglers profiting from the price disparity.
He explained that a single 6,000-liter truck smuggled across the border could fetch smugglers N17 million per trip, whereas selling that same truckload within Nigeria, in a place like Borno, would bring in only about N500,000.
Kyari pointed out that with the removal of the fuel subsidy, Nigeria has successfully closed this loophole. Since the prices now reflect market realities, the incentive to smuggle has diminished significantly.
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“For the past 47 years, petrol has been heavily subsidised, which created an arbitrage opportunity, as fuel prices in Nigeria were significantly lower than in neighbouring countries,” Kyari explained.
“When the President ended the subsidy in June, it recalibrated fuel prices to their true market value. There’s no longer any profit in smuggling fuel across borders. A smuggler who once earned N17 million per trip can no longer do so.”
Kyari also illustrated the contrast by noting that a truck legally transported to Maiduguri, for instance, would yield less than N500,000 in profit.
“Why would anyone go through the hassle of taking a truck to Maiduguri and make only N500,000 or, at best, a few million after holding the product for a month, when they could have previously earned N17 million in one trip smuggling it across the border?” he asked.
He added that without the subsidy regime, Nigeria no longer loses vast sums of money to fuel smuggling.
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