The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has revealed that petrol smugglers exploited subsidy loopholes, earning approximately N17 million per truck in neighbouring countries.
Speaking in Abuja about the government’s efforts to deregulate the oil and gas sector, Kyari highlighted how the fuel subsidy enabled widespread cross-border smuggling.
He explained that a 6,000-litre truck of petrol smuggled across the border could fetch petrol smugglers at least N17 million per trip, whereas the same truck, if sold within Nigeria, would generate no more than N500,000, especially in northern states like Borno.
Kyari also emphasised that since the removal of the fuel subsidy, Nigeria has stopped losing significant revenue to smuggling. With fuel prices now reflecting their true market value, smugglers can no longer exploit the system as they did under the subsidy regime. This deregulation marks a key step in reducing fuel-related losses and boosting transparency in the sector.
“In the last 47 years, PMS has always been subsidised, and subsidy is creating arbitrage that means there is a difference between price in one location, lower than what it should be in another location.
“And when Mr. President announced the subsidy removal in June, what he did was recalibrate the price. There is no longer any value in anyone taking the product across the border. If you do, you’re not going to make those profits than you do.
“In a 6,000-litre truck, you can actually gain up to N17 million from just one truck. How are you going to stop someone who with two trips can just easily make N17 million times two—which is the price of the truck itself?
“However, when you take a truck legally maybe for N8 million, say, to Maiduguri, the legitimate value you have is less than N500,000. Why would I see N17 million and then take all the trouble to go to Maiduguri, keep it in the fuel station for one month and then make N3 to N4 million? So you see, as long as you are not in a subsidy regime, you won’t lose money,” Kyari stated.
The NNPCL has increased the price of petrol, with prices now reaching around N998 per litre in Lagos and N1,030 per litre in Abuja. This is the second price hike by the NNPCL in less than two months.
The recent increase follows reports that NNPCL plans to step back as an intermediary in the purchase deal with Dangote Refinery, sparking concerns over potential further price surges.
Fuel prices have been on a steady rise as the government continues to phase out petrol subsidies. Despite the deregulation, the government has faced challenges in effectively managing petrol supply to marketers and filling stations, adding to concerns about the long-term stability of fuel prices.
