NNPCL Boss Says Cross-Border Fuel Smuggling Decreased After Subsidy Removal

The removal of fuel subsidies in Nigeria has significantly reduced cross-border smuggling of Premium Motor Spirit, according to Mr. Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited.

In an interview with Channels TV on Sunday, Kyari explained that the subsidy had created a price disparity between Nigeria and its neighboring countries, making smuggling highly profitable.

He emphasized that prior to the subsidy removal, the price difference was substantial, incentivizing smugglers to transport fuel across borders.

However, “the removal of the subsidy has effectively calibrated fuel prices, eliminating the profitability of smuggling”, he said.

Kyari noted that the cost disparity between legitimate and illegal transportation of PMS is now significant, with legal transportation being much less profitable.

In addition to reducing smuggling, the removal of subsidies has led to price parity and equalization with the cross-border prices of PMS.

Kyari said, “The removal of fuel subsidy in Nigeria has been a game-changer in the fight against cross-border smuggling.

“For decades, the subsidy created a lucrative opportunity for smugglers to profit from the price difference between Nigeria and neighbouring countries.

“This is a positive development for Nigeria’s energy sector, as it can help to ensure that consumers are paying fair prices for fuel.”