The group chief executive officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari has said the removal of petrol subsidy has greatly reduced cross-border smuggling of the product.
He spoke during an interview with journalists on October 13.
The NNPC GCEO stated that the petrol subsidy created a price discrepancy between Nigeria and neighbouring countries, making smuggling highly lucrative.
He added that before the removal of the subsidy, the price difference had encouraged smugglers to transfer petroleum products over international boundaries.
Kyari also said that there is presently a striking difference in profit between the legal and illegal petrol sales.
Citing a sample, Kyari said petrol smugglers could make as much as N17 million on just a tanker of petrol, while an oil marketer in Maiduguri, Borno state capital, would only gain about N300,000 to N400,000.
“When Mr. President announced the removal of subsidy in June 2023, it calibrated prices, they came to market, and there is no longer value in anyone taking the products across the border,” Kyari said.
“If you do, you would not make those profits you used to make.”
Talking about why smugglers preferred neighbouring countries, the NNPC GCEO said these countries have “taxation on PMS”.
“We do not have tax here. So, on many of these countries, actual government revenue is dependent on the taxes that is coming on PMS,” he said.
On May 29, President Bola Tinubu announced that the petrol subsidy regime was over.