N50bn worth of fuel smuggled from Nigeria to Benin Republic annually

Over N50 billion worth of subsidised Premium Motor Spirit (PMS), also known as petrol, is being diverted through the Seme-Badagary border to Benin Republic, BusinessDay checks show.

Fuel smuggling to Benin Republic is not new. In 2012, the International Monetary Fund (IMF) said 80 percent of petroleum products consumed in Benin Republic were smuggled from Nigeria.

But analysts are miffed that fuel is still smuggled out of Nigeria despite fuel scarcity, as most refineries are not working at full capacity and the Nigerian National Petroleum Corporation (NNPC) is solely importing petrol.

“Those of us in Badagry axis have noticed an excruciating and unpalatable trend that is aggravating the hardship and causing further pain for our people,” David Setonji, lawmaker representing Badagary II Constituency at the Lagos State House of Assembly, said.

“Since the commencement of the current scarcity, fuel tankers fully loaded with PMS are being ferried to the neighbouring country, precisely Republic of Benin.

“A minimum of 50 tankers are being driven out of the country to Benin through Seme border in Badagry, while our people are suffering untold hardship.

“50 tankers with 33,000 litre capacity will amount to 1,650,000 litres worth of diversion daily. At the current deregulated price of N86.50, this amounts to N142,725,000 daily and N52,094,625,000 annually loss to the nation,” Setonji said.

Sources contacted for verification say the figures are only a tip of the icebergs, as fraudulent individuals exploit porous borders to smuggle out fuel using motorcycles and vehicles with modified tanks.

Corroborating this claim, Independent Petroleum Marketers Association of Nigeria (IPMAN) said some unscrupulous marketers were engaged in the diversion of PMS to neighbouring countries.

“We will checkmate the unwholesome practices carried out by these persons and others who are into hoarding and diverting products, thereby, exacerbating the scarcity in Nigeria,” Lawson Ngoa, IPMAN committee secretary, said.

Sources say the fuel smuggled into Benin is both on artisanal and industrial scale, with modes of transportation including fully loaded fuel tankers, motorcycles carrying plastic jerry cans, cars in which the back seats have been replaced with fuel tanks and trucks with smugglers using both main roads and back roads. Others use small boats in the coastal lagoons or sailing offshore, often towing groups of jerry cans tied together or even larger barges.

Last year, Chatham House, an influential London-based think tank, published a report that highlighted the cross-border black market for Nigeria’s subsidised fuel, especially petrol, in Benin Republic and Togo.

The report, entitled: ‘Nigeria’s Booming Borders — The drivers and consequences of unrecorded trade,’ described the export trade in refined fuel as one of the largest and most visible components of the informal trade that crosses the Nigeria-Benin border

“This traffic – locally known as ‘kpayo’ – is almost entirely informal and accounts for the overwhelming bulk of refined fuel sold in the Beninois domestic market, including probably more than 80 percent of petroleum products as well as 20 percent of diesel and other products,” the authors of the report, Leena Koni Hoffmann and Paul Melly, said.

Sources confirm that Nigerians living in the border communities of Madoga, Iledu, and Ilagbe villages of Ipokia Local Government Area of Ogun State, are driving this illicit trade with collusion of Custom officials. Filling stations, according to our sources, deliberately exist to service the illegal trade. Custom officials did not respond to request for comments.

Charles Chigborum, a Nigerian student resident in Benin Republic, told BusinessDay, “Early this month, the price at black market hit 750CFA, while the filling stations sold at 825CFA. But currently, it has fallen to 400CFA at black markets and 440 CFA at the stations.

“But currently, people are now at ease with the current price and car owners now use their cars and bikes as the black market is thriving again. Transportation is now okay, but the economic system is still not at ease until Nigeria recover from its economic slumber.”