The anticipated effects of Nigeria’s decision to indefinitely ban the delivery of products to petrol stations situated along the country’s border towns are beginning to manifest. The government had intended to checkmate smuggling through the ban – the same reason it closed all its land borders early last month.
According to Reuters, the development has really affected Nigerians living around these areas. The resultant scarcity due to the ban has caused prices to spike. Hoarding has also become a commonplace, particularly for those filling stations that still have the products in their storage tanks.
To this end, lawmakers in Nigeria’s House of Representatives, yesterday, asked the Nigeria Customs Service (NCS) to suspend the ban. It is unclear, at this point, if the NCS will oblige this. A spokesman for the agency refused to say anything when he was contacted for comments.
A delicate matter
It is important to note that this is a very delicate issue which must, therefore, be addressed carefully. For many years, smuggling remained a major problem in Nigeria; costing the country a lot of money. For instance, a 2012 report by Brooking Institute noted that “neighbouring countries also benefit significantly from Nigeria’s fuel subsidy through smuggling”.
Fuel subsidy basically entails the Nigerian government spending billions of naira per annum in order to subsidise the cost of importing refined petroleum products into the country. The country’s dysfunctional refineries cannot produce enough to meet local demand, thereby making importation necessary. However, it is expensive to import these products. And without fuel subsidy, the average Nigerian would be made to bear the costs.
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Now, it becomes problematic when a sizable portion of the petroleum products subsidised by the Nigerian government for Nigerians end up in neighbouring countries, no thanks to smuggling. For a long time, everybody blamed smuggling on the country’s porous land borders. And even though various efforts were made to address the problem past, it wasn’t until now that the effects have been felt.
But these effects are polarising…
This is where the matter becomes very problematic. This is because actual Nigerians are now made to bear the consequences of the policy move. There have been reports of fuel scarcity across Katsina State which, interestingly, happens to be where Nigeria’s President Muhammadu Buhari hails from. Katsina shares a border with Niger Republic, the same country that has been fingered for being a major recipient of Nigeria’s fuel subsidy.
