The Nigeria Customs Service (NCS) has identified factors contributing to the persistence of petroleum smuggling along the nation's international borders. Spokesman of the Seme Customs Command, Superintendent of Customs Tunde Ayagbalo, cited bad road networks and host communities' dependence on smuggling as major challenges. He explained that smugglers navigate unmotorable roads with motorcycles, making it difficult for the NCS to intercept them. The Service is considering deploying drones to enhance oversight of international borders.
According to Ayagbalo, another issue is the dependence of host communities on smuggling as a means of livelihood. Residents of border communities often have no industries or companies within their communities, making smuggling a necessary activity. The NCS is sensitizing residents of border communities to the negative impacts of smuggling. Deputy Superintendent of Customs, Chado Zakari, noted that some smugglers use cross-border marriages to carry out illicit activities. They marry women from both sides of the Nigerian-Benin Republic border, facilitating the movement of smuggled products.
Zakari explained that the porosity of the Nigerian-Benin Republic border poses significant challenges. Houses in some communities are located across both countries, making it difficult to track smuggling activities. Smugglers often claim to be moving small quantities of petroleum products for domestic use, but investigations reveal that they have two wives, one in each country, and shuttle between them with smuggled products. The NCS has established good relationships with traditional rulers and organized sports competitions to discourage smuggling.
Energy experts have raised concerns over the movement of petrol across Nigeria's borders, demanding electronic tracking of every litre from refineries and import terminals to filling stations. They argue that Nigeria's inability to accurately account for petrol throughout the domestic supply chain has made it difficult to establish the true scale of cross-border smuggling and financial losses. Analysis of data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority shows an estimated 12.29 billion litres of Premium Motor Spirit (PMS) were consumed between January and August this year.
Energy expert Chike Nwosu estimates that actual domestic consumption could have been only 50 to 60 per cent of officially quoted figures in 2022/23, suggesting that almost half of the products were leaving the country's borders. Nwosu stresses the need for a more reliable system to determine domestic consumption and track petroleum products. Professor Emeritus of Petroleum Economics, Professor Wumi Iledare, recommends establishing a credible system for tracking petroleum products throughout the domestic supply chain.
Iledare suggests that every litre of petrol imported or refined for domestic consumption should be electronically tracked from production or importation to the final point of sale. This would help identify areas where smuggling occurs and enable the government to take corrective measures. A former Managing Director of 11 Plc, Adetunji Oyebanji, disputes descriptions of current petrol smuggling as "uncontrolled," noting that the situation is different from the subsidy era.
Oyebanji emphasizes that appropriate pricing remains important in reducing market distortions, citing higher petrol prices in some neighbouring countries due to taxes and other charges. The NCS and experts agree that a multi-faceted approach is needed to combat petrol smuggling, including improved border surveillance, community engagement, and effective tracking of petroleum products. The issue remains a significant challenge for the Nigerian government, with implications for the country's economy and energy security.
Key points
- - The Nigeria Customs Service faces challenges in combating petrol smuggling due to bad road networks and host communities' dependence on smuggling. - Energy experts demand electronic tracking of every litre of petrol to determine the volume actually consumed locally and identify areas where smuggling occurs. - Cross-border marriages are being used by smugglers to facilitate the movement of smuggled petroleum products.
