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Customs admits reinstatement of fuel subsidy influencing smuggling in West Africa

THE Nigeria Customs Service (NCS)  on Monday, has  raised concerns
over the renewed smuggling of Premium Motor Spirit (PMS) among Nigeria’s West African neighbours, following the reinstatement of fuel subsidy by the Nigerian government.

The Customs also revealed that intelligence findings showed a massive hike in the pump price of the commodity in neighbouring West African countries, following the restoration of PMS subsidy in Nigeria.

While attesting further to this development, the service revealed that while the average price of petrol in Nigeria was about N701/litre, the average cost of the product in neighbouring countries was N1,787/litre, a development that heightened PMS smuggling out of Nigeria in the past two weeks.

The Comptroller-General of the NCS,Adewale Adeniyi, who disclosed this at a press conference in Yola, on Monday, June 10, said the NCS had to join forces with the Office of the National Security Adviser to tackle the menace.

He said, “Today, we are here to update members of the public on the strategic efforts of the Nigeria Customs Service in addressing the critical issue of fuel smuggling through the recently launched Operation Whirlwind, under the auspices of the Office of the National Security Adviser.

“About a year ago, the Federal Government made the bold strategic decision to remove the fuel subsidy. This crucial step was aimed at freeing up substantial funds that could be redirected to other productive sectors of the economy, reducing pressure on our foreign exchange reserves, and diversifying economic growth.

“The immediate impact was an upward adjustment in fuel prices to reflect current realities. Despite the inflationary pressures and financial strain on households, particularly those with lower incomes, comparative studies still show that fuel prices in Nigeria remain the cheapest compared to other countries in the West and Central African region,” he stated.

Speaking further, Adeniyi said, “While PMS is sold at an average of N701.99 in Nigeria, it is sold at an average of N1,672.05 in the Republic of Benin and N2,061.55 in Cameroon. In other countries around the region, the price of PMS ranges from N1,427.68 in Liberia to N2,128.20 in Mali, averaging N1,787.57, according to the fuel price data obtained from opensource.”

The customs boss said this comparative price advantage, though beneficial to Nigerian citizens, unfortunately, created a lucrative incentive for smuggling PMS out of Nigeria, where prices were two to three times higher.

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He said this is substantiated by the report on the average daily evacuation of PMS to various states in Nigeria, obtained from the Nigeria National Midstream and Downstream Petroleum Regulatory Authority.

In his speech, which was made available to our correspondent in Abuja, he said, “The (NMDPRA) report shows significant changes in evacuation patterns that are not justified by corresponding economic and demographic changes, particularly in border states that share contiguous borders with our neighbours.

“Between April and May 2024, Borno and Kebbi states recorded 76 and 59 per cent increases in evacuations, ranking among the top three states. On a year-on-year basis (May 2023 and May 2024), Sokoto and Taraba states recorded the most substantial increases in evacuations, with 247 and 234 per cent increases, respectively.

“Border states like Katsina and Kebbi also recorded more than 50 per cent increases in evacuation. These discrepancies, along with the price disparity between domestic PMS (N701.99) and neighbouring countries (N1,787.57), raise concerns about the actual delivery of PMS and the potential for smuggling.”

Adeniyi said credible intelligence on activities around border areas corroborated these suspicions.

“In response to the alarming increase in fuel smuggling, the NCS in close collaboration with the NSA initiated Operation Whirlwind. This nationwide operation aims to ensure that Nigerians enjoy the full benefits of fuel price deregulation in line with the vision of President Bola Tinubu.

“Defend the national currency and reduce pressures that may be attributed to the activities of smugglers. c. Identify, dismantle and disrupt cartels of smugglers operating within the ecosystem. d. Raise awareness of the local communities and solicit their support to achieve these objectives,” he stated.




     

     

    He said the operations, which were guided by credible intelligence and empowered by the new Customs Act 2023, target illegal exportation, particularly of petroleum products, ensuring their availability within the country and conserving government resources.

    The ICIR has earlier reported that the government has sustained a price-peg(a regulatory price control regime) of fuel products at filling stations, a step analysts said signposts fuel subsidy return.

    Although President Bola Tinubu at his inauguration on May 29 announced a “no more subsidy” regime which triggered over 200 per cent price increase, the International Monetary Fund-IMF later accused the government of bringing the subsidy through the backdoor.

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    “Nigeria has missed the opportunity to reform the oil sector and learn from its counterparts like Petrobrass and Saudi Aramco, which are reaping the benefits of such reforms. It has also lost the goodwill of the Nigerian people with a poor approach to social intervention programmes,” Lead Director of the Centre for Social Justice, Eze Onyekpere, told The ICIR.

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    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.

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