Subsidy Removal Cuts Cross-Border Fuel Smuggling – NNPCL Boss

The removal of fuel subsidies in Nigeria has led to a significant reduction in the cross-border smuggling of Premium Motor Spirit (PMS), according to the Nigerian National Petroleum Company Limited (NNPCL).

Group Chief Executive Officer of NNPCL, Mr. Mele Kyari, shared this development during an interview with Channels TV on Sunday. He explained that the subsidy regime had previously created a wide price disparity between Nigeria and its neighbouring countries, making fuel smuggling highly profitable.

Kyari highlighted that, before the removal of the subsidy, the price difference was substantial, encouraging smugglers to exploit the opportunity by transporting fuel across borders. “The subsidy made it very attractive for smugglers to move fuel illegally,” he said.

However, he noted that with the removal of the subsidy, fuel prices have now been “effectively calibrated,” making smuggling far less profitable. “The removal of the subsidy has essentially eliminated the price disparity, reducing the profitability of smuggling,” Kyari stated.

The NNPCL boss further pointed out that the gap between the cost of legal transportation of PMS and illegal smuggling has widened, making legitimate fuel trade more sustainable.

Kyari also emphasized that the subsidy removal has not only curbed smuggling but has also brought about price parity and equalisation with PMS prices across the region. “This move ensures that consumers are now paying more competitive and fair prices for fuel, in line with global standards,” he added.

He hailed the removal of fuel subsidies as a “game-changer” in the fight against fuel smuggling, calling it a positive development for Nigeria’s energy sector, which will ultimately benefit the country’s economy and consumers.