Mele Kyari, the Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), defended the removal of petroleum subsidies by President Bola Tinubu.
During a briefing with journalists in Abuja on Monday, Kyari explained that under the subsidy regime, petrol smugglers exploited loopholes, earning approximately ₦17 million per truck in neighboring countries. He noted that cross-border smuggling was rampant due to the fuel subsidy, with smugglers operating 6,000-liter trucks making significant profits per trip.
“For the past 47 years, petrol has been subsidized, creating an arbitrage situation where prices differ between locations,” he said. “When Mr. President announced the removal of the subsidy in June, he effectively recalibrated fuel prices.”
Kyari emphasized that the removal of subsidies means there is no longer significant profit to be made by smuggling fuel across borders. “If someone attempts to smuggle fuel now, they won’t see those same profits,” he stated.
He illustrated the financial incentives for smuggling: “A 6,000-liter truck could yield up to N17 million in profit. Why would someone take the legal route to Maiduguri, where they might earn less than N500,000 for a trip that could take considerable time and effort?”
Kyari concluded by highlighting the impracticality of risking the arduous process of legal transport when the potential rewards from smuggling were so much higher. “Why would I go through all that trouble to make N3 to N4 million when there’s the possibility of earning N17 million through smuggling?” he questioned.
Written By: Praise Inalegwu