Fuel smuggling continues to be a major issue in Nigeria, as highlighted by the Nigeria Customs Service’s Comptroller General, Adewale Adeniyi. During the service’s first quarter performance review in Abuja, Adeniyi pointed out that despite the removal of fuel subsidies, smugglers are still profiting from illegally exporting Premium Motor Spirit (PMS) to neighboring countries.
The difference in fuel prices between Nigeria and its neighboring countries is a key factor driving fuel smuggling. While PMS in Nigeria costs between N880 and N950 per liter, the same product is sold for significantly higher prices in countries like Cameroon, Niger, and the Benin Republic. This large price differential provides a strong incentive for smugglers to engage in illegal activities.
Adeniyi emphasized that even as local fuel prices decrease in some of these countries, the price gap still fuels smuggling operations. For example, while fuel prices in Cameroon have dropped to around N850-N900 per liter, prices in Niger and the Benin Republic remain high at N1,600-N2,000 per liter. This price arbitrage creates opportunities for smugglers to profit from the illicit trade.
To combat fuel smuggling, the Nigeria Customs Service has launched Operation Whirlwind to crackdown on illegal activities. Despite efforts to curb smuggling, the problem persists due to the significant price difference between Nigeria and its neighbors.
In recent years, the cost of fuel in Nigeria has fluctuated significantly. In May 2023, fuel sold for ₦238.11 per liter, but by May 2024, prices had risen to around ₦770 per liter. Currently, the average price of fuel in Nigeria is approximately ₦900 per liter.
The Nigeria Customs Service’s efforts to address fuel smuggling reflect the ongoing challenges faced in combating illegal activities in the region. By addressing the root causes of smuggling, such as price differentials and incentives for illegal trade, authorities hope to reduce the impact of fuel smuggling on the Nigerian economy.
