The closure of over 400 independent oil marketer filling stations in Nigerian border communities since 2019, a directive by the Federal Government aimed at curbing petrol smuggling to neighboring countries, has sparked controversy. While the Nigeria Customs Service (NCS) maintains the closure is necessary to combat smuggling, particularly given the recent fuel scarcity in Niger Republic, oil marketers lament the significant revenue losses and economic hardship the closures have caused. The NCS, through its Operation Whirlwind, emphasizes its commitment to seizing smuggled petrol and prosecuting smugglers, citing successful operations and seizures across various border areas. The agency maintains that the border filling stations must remain shut to prevent illegal fuel exports.
This closure initially stemmed from a ban by former President Muhammadu Buhari on petrol supply within 20km of the border, a measure intended to curb the diversion of subsidized fuel to neighboring countries. While the ban did reduce smuggling, its full impact wasn’t realized until President Bola Tinubu’s removal of the fuel subsidy in May 2023. This removal, coupled with NCS efforts, triggered a severe fuel scarcity in Niger, where petrol prices skyrocketed to as high as N8000/litre, demonstrating the reliance of neighboring countries on subsidized Nigerian fuel. Niger, in particular, has historically depended on Nigeria for a substantial portion of its fuel consumption, much of which was smuggled through illegal routes. The subsidy removal made smuggling unprofitable, exposing Niger’s dependence and limited refining capacity.
Oil marketers, while acknowledging the government’s efforts to combat smuggling, express strong disapproval of the continued closure of their border stations. They argue that the closure contradicts the Petroleum Industry Act (PIA) and has resulted in the collapse of investments, job losses, and economic hardship for Nigerians living in border areas. The Independent Petroleum Marketers Association of Nigeria (IPMAN) contends that the Office of the National Security Adviser (NSA), which initiated the closure, is working with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to review the ban. IPMAN maintains that with the subsidy removed and Operation Whirlwind achieving its objectives, the continued closure is unnecessary and harmful.
IPMAN argues that the NCS’s role, as per the PIA, is to impound smuggled fuel, not shut down filling stations. They advocate for strengthening border security and lifting the ban, emphasizing that punishing border communities for smuggling activities is unjust. The closure, they argue, negatively impacts legitimate businesses and the livelihoods of those residing in these areas, who rely on these filling stations for their fuel needs. IPMAN stresses that the government should focus on enhancing security measures rather than penalizing law-abiding citizens and businesses. They believe the ban, while initially intended to address a specific problem, has now become counterproductive and detrimental to the economic well-being of border communities.
The fuel crisis in Niger, exacerbated by the Nigerian subsidy removal, highlights the interconnectedness of the two countries’ fuel markets. Niger’s state-owned refinery, with limited production capacity, has struggled to meet domestic demand, previously supplemented by smuggled Nigerian fuel. The scarcity reached a critical point with exorbitant price hikes, forcing Niger to request fuel assistance from Nigeria. This situation underscores the impact of Nigeria’s fuel policies on its neighbors and the challenges posed by cross-border smuggling. The request for fuel assistance also points to the complex relationship between the two nations, where despite political tensions, economic realities necessitate cooperation.
The situation presents a complex dilemma. While the Nigerian government’s efforts to combat smuggling and protect its resources are understandable, the impact on border communities and neighboring countries warrants careful consideration. The continued closure of filling stations raises questions of economic fairness and proportionality. Balancing the needs of national security with the economic well-being of border communities and maintaining regional stability requires a nuanced approach. Finding a solution that addresses the smuggling problem without unduly penalizing legitimate businesses and neighboring countries remains a significant challenge.
