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In a shocking disclosure that underscores the rot in Nigeria’s fuel subsidy regime, the Group Chief Executive Officer of the Nigerian National Petroleum Corporation (NNPC) Limited, Mele Kyari, has revealed how petrol smugglers cashed in on the government’s flawed subsidy policy, making up to N17 million per truck by illegally diverting fuel across borders.
Speaking at a press briefing in Abuja, Kyari painted a damning picture of the scale of fuel smuggling during the subsidy era. While many Nigerians struggled with rising fuel prices and scarcity, smugglers enjoyed astronomical profits, thanks to an unchecked system. According to Kyari, a 6,000-liter truck of petrol smuggled out of Nigeria could fetch a jaw-dropping N17 million on the black market, particularly in neighboring countries. To put it in perspective, the same truck, if legally sold within Nigeria, would bring in a paltry N500,000 — a stark contrast that exposes the deep flaws in the subsidy structure.
“Imagine a situation where a smuggler could make N17 million from just one truckload of petrol. Why would they even consider selling it within Nigeria for less than half a million?” Kyari asked, highlighting the absurdity of the situation. “This is why cross-border smuggling thrived — because the profit margins were just too tempting.”
Kyari went on to explain that this rampant smuggling not only bled Nigeria’s economy but also created a massive arbitrage that incentivized crime. “For 47 years, PMS (Premium Motor Spirit) has been subsidized, creating a price disparity between Nigeria and its neighbors. Smugglers simply exploited this difference,” Kyari noted. “Now, with the removal of the subsidy in June, this arbitrage no longer exists, and the smuggling has virtually disappeared because it’s no longer profitable.”
A Broken System or Deliberate Sabotage?
While Kyari’s revelations may come as a shock to some, others argue that this is the culmination of years of neglect and deliberate sabotage of Nigeria’s oil and gas sector. The subsidy regime, intended to make petrol affordable for Nigerians, inadvertently became a breeding ground for corruption, smuggling, and economic sabotage. How could such a glaring loophole persist for nearly five decades without being fixed? Was it mere incompetence, or were key players within the system deliberately turning a blind eye, knowing how much they stood to gain?
Kyari’s figures are staggering. A smuggler making two trips with a truckload of petrol could pocket N34 million in illegal profits — nearly the cost of the truck itself. By comparison, legitimate sellers within Nigeria faced not only lower profits but also the logistical nightmare of transporting fuel to regions like Maiduguri, where they’d be lucky to make N500,000 per truck. “Why would any rational actor opt for the legal route when the illegal one is so much more profitable?” Kyari asked.
These revelations are likely to further inflame public anger, especially as Nigerians are still reeling from the aftershocks of the subsidy removal. The average citizen, already struggling under the weight of rising living costs, is now paying nearly N1,030 per liter of petrol in Abuja and up to N998 in Lagos. This is the second price hike in less than two months, and there are growing fears that it won’t be the last.
Who Bears the Cost of Deregulation?
While the Nigerian government touts the removal of the subsidy as a necessary step towards deregulating the oil and gas sector, the question remains: who is really bearing the brunt of this policy shift? Kyari’s assertion that the country has stopped losing money to fuel smuggling may be true on paper, but in reality, everyday Nigerians are the ones footing the bill. The same deregulation that is curbing smuggling is also driving up petrol prices, and there seems to be little relief in sight.
Critics of the government’s handling of the situation argue that while the elimination of fuel smuggling is a win for the economy, the gains are being offset by the strain on the common man. With inflation rising and wages stagnating, the deregulated fuel prices are pushing many Nigerians to the brink of economic hardship.
The government’s decision to withdraw NNPC as an intermediary in the Dangote Refinery purchase deal has also raised concerns. Many fear this could lead to a further lack of oversight, potentially creating room for more price hikes and less control over the nation’s energy future.
A Necessary Evil or Economic Gamble?
As Nigeria grapples with the fallout of the subsidy removal, Kyari’s comments bring to light a painful but necessary truth: the subsidy system was broken beyond repair. It enriched a few at the expense of the many, encouraged smuggling, and drained the nation’s resources. However, the remedy — full deregulation — comes with its own set of challenges.
The government’s gamble on deregulation may have curbed the N17 million-per-truck smuggling racket, but it’s left millions of Nigerians facing skyrocketing fuel costs. The question now is whether this economic experiment will stabilize the sector in the long run, or if it will simply shift the burden onto the already overburdened masses.
Only time will tell if the end of the subsidy era will mark the beginning of a more equitable fuel distribution system, or if it’s just another chapter in Nigeria’s long history of mismanaged resources and economic hardship.
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