NNPCL CEO Mele Kyari Justifies Fuel Subsidy Removal, Says Smugglers Made N17million Per Truck
According to him, prior to the removal of the fuel subsidy in May 2023, petrol smugglers earned as much as N17million per truckload when smuggling fuel to neighbouring countries.
According to him, prior to the removal of the fuel subsidy in May 2023, petrol smugglers earned as much as N17million per truckload when smuggling fuel to neighbouring countries.
He said this while speaking to journalists in the Federal Capital Territory, Abuja about the government’s efforts to reform the oil and gas sector.
According to Kyari, a single 6000-litre truck smuggled across the border could fetch smugglers N17million per trip, he however claimed that same truckload of fuel would only cost N500,000 in Nigeria, citing an instance of Borno.
He argued that removal of fuel subsidy stopped such “loophole” as incentive to smuggle has diminished significantly.
“For the past 47 years, petrol has been heavily subsidised, which created an arbitrage opportunity, as fuel prices in Nigeria were significantly lower than in neighbouring countries,” Kyari said.
“When the President ended the subsidy in June, it recalibrated fuel prices to their true market value. There’s no longer any profit in smuggling fuel across borders. A smuggler who once earned N17 million per trip can no longer do so.”
“Why would anyone go through the hassle of taking a truck to Maiduguri and make only N500,000 or, at best, a few million after holding the product for a month, when they could have previously earned N17 million in one trip smuggling it across the border?” he asked.
There have been controversies over the manner Nigeria’s removal of fuel subsidy, a move that has been blamed for hardship and increasing inflation.
The subsidy was removed on May 29, 2023 when Nigeria’s President announced that “subsidy” is gone.
Although there are arguments that Nigeria still subsidises fuel, a development the government has persistently denied.
