Fuel Subsidy Removal in Nigeria Cuts Cross-Border Smuggling of Premium Motor Spirit, Says NNPC CEO
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The removal of fuel subsidies in Nigeria has led to a significant decline in cross-border smuggling of Premium Motor Spirit (PMS), according to Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited. In a recent interview, Kyari explained that the subsidies had previously created a price disparity between Nigeria and its neighbors, making smuggling highly lucrative.
He highlighted that before the subsidy was lifted, the price differences were substantial, encouraging smugglers to transport fuel across borders. However, Kyari noted that the removal of the subsidy has recalibrated fuel prices, effectively reducing the incentives for smuggling.
He further stated that the gap between legal and illegal PMS transportation costs has widened, with legal transportation now being far less profitable. The subsidy removal has also resulted in price parity, aligning Nigerian fuel prices with those of neighboring countries.
Kyari described this development as a “game-changer” in the fight against cross-border smuggling, emphasizing that it helps ensure consumers pay fair prices for fuel. He remarked, “For decades, the subsidy created a lucrative opportunity for smugglers. This change is a positive step for Nigeria’s energy sector.”
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