Buhari links rising subsidy payment to cross-border PMS smuggling


IN what appeared to be an indictment on various agencies that are stationed at Nigeria’s borders, President Buhari, on Thursday, linked the country’s rising subsidy payment to cross-border smuggling of the country’s Premium Motor Spirit (PMS).

Buhari spoke during an interview on Arise Television.

Responding to a question from the Chairman of ThisDay, Nduka Obaigbena, Buhari, who doubles as Minister of Petroleum Resources, noted that cross-border smuggling of PMS had contributed to the hike in the amount of money spent on subsidy.

“Even when we close the border, they ride on machines through the bush to smuggle the product. We see Nigerian petrol in some West African countries,” Buhari said.

The president noted that the Nigerian government was working assiduously to get the cooperation of the Nigerian Customs Service, the Nigerian Immigration Service and other border agencies to halt cross-border smuggling of PMS.

According to him, the Customs and immigrations services would help to reduce oil theft and smuggling.

“Customs are doing quite well in confiscating tankers of stolen petroleum products. The people that are dispossessed of these products don’t normally complain. They don’t talk to anybody, and they don’t say it.”

The ICIR had earlier reported that the Nigerian National Petroleum Corporation (NNPC) pays N120 billion on subsidy monthly. The corporation had expressed concerns over the development, which had reduced the funds the states get from the Federation Account.

Many stakeholders, including the Nigerian Governors Forum, have kicked against subsidy payment.

Ekiti State Governor Kayode Fayemi had expressed concerns that his administration’s pro-poor policies had been undermined by subsidy payment.

In Africa’s largest economy with the highest number of poor people in the world, N120 billion will pay the N30,000 minimum wages of at least four million citizens.

The amount could also build up to 2,400 houses for thousands of homeless Nigerians.

Available statistics has shown that Nigeria has spent N10 trillion on fuel subsidy in 12 years. The huge amount spent on subsidy could have been used to finance infrastructural projects.

Currently the Nigerian government is struggling to close the infrastructure gap by borrowing.

In the first quarter of 2020, the Nigerian government said it was no longer paying for subsidy and announced that it had commenced a ‘price modulation’ regime.

But reports later emerged that the government was spending at least N120 billion monthly on subsidy.

Stakeholders say the subsidy regime is characterised by opaqueness.



    “Why is the NNPC the sole importer? Who checks them? There is so much opaqueness in their direct sales, direct purchase agreement and we can’t decipher how much actual consumption we make to attract the rising subsidy,” a former board member of the Nigerian Extractive Transparency Initiative (NEITI) Faith Nwadishi told THE ICIR.

    President of the Major Oil Marketers Association of Nigeria (MOMAN) Adetunji Oyebanji told The ICIR that the government must find a way to urgently deregulate the petroleum downstream sector to do away with subsidy.

    “We may be eating up our future with the way we are going. For some of us, we can’t say this enough. We cannot keep politicising economic decisions all the time. You can see the way we are struggling to pull this through,” Oyebanji added.

    The major objective of the subsidy payments is to keep the prices of fuel low so as to reduce the cost of living in the country, but the illegal exportation of subsidised fuel conversely increases the cost of the subsidy on the economy.


    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation


    Please enter your comment!
    Please enter your name here

    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement


    - Advertisement