Cross-border fuel smuggling dropped after subsidy removal, says NNPCL boss

The elimination of fuel subsidies in Nigeria has notably decreased the smuggling of Premium Motor Spirit (PMS) across borders. This was stated by Mr. Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, during an interview with Channels TV on Sunday.

Kyari explained that the subsidy had created a significant price gap between Nigeria and its neighboring countries, which made smuggling particularly lucrative. He emphasized that prior to the removal of the subsidy, the price difference was considerable, providing strong incentives for smugglers to transport fuel out of Nigeria.

However, he noted that “the removal of the subsidy has effectively adjusted fuel prices, reducing the profitability of smuggling.” According to Kyari, the current disparity between legal and illegal transportation of PMS is now much more pronounced, with legal transportation proving to be far less lucrative.

Besides curbing smuggling activities, the removal of the subsidy has also led to price parity and alignment with cross-border PMS prices. Kyari remarked, “The elimination of fuel subsidies in Nigeria has been a transformative step in combating cross-border smuggling.”

He added, “For many years, the subsidy created a profitable opportunity for smugglers to exploit the price differences between Nigeria and its neighbors. This change is a significant advancement for Nigeria’s energy sector, as it ensures consumers are charged fair prices for fuel.”