Smugglers of petrol along Nigeria’s borders with Benin Republic are lamenting increased extortion by customs officials, which has made their operations more difficult and less profitable. These complaints highlight the ongoing challenges in curbing cross-border fuel smuggling, a persistent issue that undermines Nigeria’s economy and fuels corruption.
The Roots of Smuggling
Fuel prices in Nigeria are significantly lower than in neighbouring countries like Benin Republic, where petrol can cost as much as 700 CFA francs per litre (approximately N2,100). This price disparity is driven by Nigeria’s past fuel subsidies and exchange rate differences. While the Nigerian government eliminated subsidies mid last year, making petrol prices rise to over N1,250 per litre at border localities, smugglers still find opportunities for profit due to the CFA franc’s strength.
In 2019, the government introduced a 50-kilometre no-fuel-station zone along the border to prevent smuggling. This policy forced smugglers to adapt by building stations just outside the restricted zone, where they load fuel onto trucks for transport into Benin.
The Role of Customs in Smuggling
Customs officials are tasked with preventing the illegal export of fuel. However, smugglers allege that some officials exploit their position by demanding payments to allow fuel-laden trucks to cross the border. This practice, known as “booking,” involves issuing tags to trucks carrying up to hundreds of jerrycans of petrol.
Smugglers report that customs charges have recently increased significantly, making the business increasingly unprofitable. A smuggler explained that, “Customs now charge so much that by the time the fuel gets to Benin, the costs are too high to make any real profit.”
Economic Impact of Smuggling
Fuel smuggling has long-term economic implications for Nigeria. It undermines government efforts to stabilise the downstream petroleum sector and robs the country of potential revenue. According to industry estimates, billions of naira are lost annually to smuggling activities along Nigeria’s porous borders.
For smugglers, however, the economics are shifting unfavourably. With petrol costing over N1,250 per litre in border localities and rising costs due to customs charges, smugglers are finding it harder to compete with official imports in Benin Republic.
Proposed Solutions
Experts have called for stricter enforcement and comprehensive reforms to address fuel smuggling. Key recommendations include:
- Technological Monitoring: Use digital tracking systems to monitor fuel distribution from depots to filling stations near borders.
- Border Surveillance: Strengthen security along border areas using drones, patrols, and automated systems.
- Address Corruption: Increase transparency in customs operations to reduce extortion and hold officials accountable.
- Regional Price Harmonisation: Work with neighbouring countries to narrow the price gap, reducing the incentive for smuggling.
A Complex Battle Ahead
While the Federal Government has taken steps to regulate fuel distribution and reduce smuggling, the involvement of corrupt officials undermines these efforts. Smugglers argue that as long as customs charges remain exorbitant, the trade will continue to be fraught with challenges.
The issue underscores a broader need for reform in Nigeria’s downstream petroleum sector and border management. With economic pressures mounting, both the government and stakeholders must find sustainable solutions to address fuel smuggling while maintaining fair practices in customs operations.
