Tayo Busayo, Abuja
DAILY COURIER - The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has revealed that petrol smugglers exploited the fuel subsidy system, making as much as ₦17 million per truck smuggled into neighboring countries. Speaking to journalists in Abuja, Kyari described how cross-border smuggling of petrol thrived under the subsidy regime, with smugglers benefiting immensely due to the price disparity between Nigeria and neighboring nations.
“In a 6,000-litre truck, smugglers can gain up to ₦17 million per trip,” Kyari explained. “With two trips, they can easily make ₦34 million, which is more than enough to purchase a truck outright. Meanwhile, legally transporting a truckload of fuel within Nigeria, for instance, to Maiduguri, would only yield around ₦500,000 in profit.”
Kyari highlighted how the fuel subsidy had created a lucrative opportunity for smugglers due to the difference in fuel prices between Nigeria and its neighbors. He emphasized that the removal of the subsidy in June by President Bola Ahmed Tinubu has drastically reduced the incentive for smuggling, as there is no longer significant price disparity across borders. “When the President removed the subsidy, it recalibrated the price, and now there is no value in taking the product across the border. The profits they once enjoyed have been eliminated,” Kyari said.
Fuel prices in Nigeria spiked again on October 9, further worsening the economic conditions for many Nigerians already grappling with inflation and the rising cost of living. The latest hike, which saw prices rise by between 15 to 20 percent, is the second increase in just over a month. In some areas, including Abuja and Kano, fuel prices reached as high as 1,000 naira per litre, while the average price at pumps surged from 855 to 998 naira.
The NNPCL has remained silent about the sudden increase, though in September, the company acknowledged its struggles with significant debts owed to fuel suppliers, which led to an earlier 40 percent price increase aimed at stabilizing its finances. The rising fuel prices are part of broader economic reforms initiated by President Tinubu's administration, which include the removal of the fuel subsidy and the floating of the naira.
Before these reforms, petrol prices were under 200 naira per litre, but the removal of the subsidy has led to inflation hitting a three-decade high, further stretching the financial capacity of Nigerian households.
Reacting to the latest price increase, the Nigeria Labour Congress (NLC) expressed dismay, calling for an immediate reversal of the hike. The NLC argued that the rising cost of petrol has put unbearable pressure on the already strained budgets of many Nigerians.
However, efforts to organize large-scale protests against the economic hardship have struggled to gain traction following the government's heavy-handed crackdown on nationwide demonstrations in August. During a recent protest in October, which was poorly attended, President Tinubu again called on Nigerians to remain patient with his government’s reforms, insisting that they are necessary to revive the economy in the long term and attract foreign investment.
Despite the promises of future economic stability, many Nigerians continue to bear the brunt of these policies, with soaring inflation, high fuel costs, and a battered naira adding to the country's growing economic challenges.