When was the last time you thought about fuel? Have you thought about how much it costs for a litre, and why even though we have a robust subsidy, petrol prices aren’t uniform across the country?
Well, let’s start with the NTA report from 2018. According to the NTA, a staggering 469,000 litres of petrol left Nigeria for the Benin Republic before the 8 trucks which were transporting the fuel were arrested by the NSCDC.
Now near 500,000 litres of fuel was being transported illegally across the border to resale in Benin Republic.
This was also just one shipment and several shipments of this nature happen all the time across Nigeria’s borders.
If several million litres of fuel are leaving Nigeria illegally each day for our neighbouring countries, who are profiting off these illegal shipments and why?
SB Morgen, the premier geopolitical research and analysis platform in Nigeria might have some answers.
In a survey of fuel prices across West Africa, SB Morgen discovered that Nigeria’s current official pump price of 145 Naira is the lowest in the region, coming up at only half the official pump price of Sierra Leone and Liberia, its closest competitors in terms of pricing.
In some regions it doesn’t even come up to half of the pump price in regions like Benin Republic.
Many of these other countries are not oil producing countries and need to import fuel, anyone that can provide them fuel at a discount is a welcome
This disconnect in pricing has led to unofficial smuggling of fuel outside Nigeria where the high pump prices ensure that smugglers who take the risk get rewarded handsomely by selling at a discount in these countries but at a much higher price than they would get in Nigeria.
Considering Dangote’s famed refinery isn’t coming online till late 2020, and Buhari has promised us he will have ended fuel imports and subsidies by 2023,we still have a few years of subsidies to pay and more money to bleed.
What does this mean for the Nigerian economy?
Money that could go into infrastructure development here, is inadvertently subsidizing fuel costs for the whole of West Africa and making a handful of people a whole lot of money.
Our problems are much larger than we realise.