April 20, 2024 6:10 am





Nigeria Cracks Down on Petrol Subsidy Scandal, Hitting Niger’s Black Market Hard

On the road linking Niger’s capital Niamey with the south of the country, illegal fuel warehouses have closed and intrepid black-market touts waving petrol canisters at passing cars have become an endangered species. The reason? Neighbouring Nigeria has scrapped its subsidies for petrol — a move that tripled domestic prices and ended the fat profits that smugglers could make by sneaking fuel into Niger.

Illegal fuel warehouses on the road connecting Niger’s capital, Niamey, to the southern part of the country have closed down. Black market vendors who used to sell petrol on the roadside are now scarce. This is all thanks to Nigeria’s decision to remove subsidies on petrol, leading to a threefold increase in prices domestically. The move has put an end to the lucrative business of smuggling fuel into Niger.

In Niamey’s suburbs, residents no longer witness the spectacular chases between customs officers and gasoline vendors. Gone too are the streams of cars and motorcycles which under the noses of customs officers shuttled across the border, laden with loads of jerrycans. The rampant trafficking “has stopped”, said Adamou Gueraou, mayor of Dan-Issa, the smugglers’ gateway to southern Niger.

The suburbs of Niamey are no longer filled with the thrilling pursuits between authorities and gasoline vendors. The constant stream of vehicles transporting fuel cans across the border right under the noses of customs officers has also disappeared. Adamou Gueraou, the mayor of Dan-Issa, revealed that the rampant fuel trafficking has effectively ceased.

Before Nigeria ended its subsidies, petrol exchanged hands on Niger’s black market for between 250-275 CFA francs (42-46 US cents) a litre, or $1.61-1.76 per US gallon. Today, the price varies between 550-700 CFA francs, which is more expensive than at regular petrol stations. Since 2011, Niger has been producing 20,000 barrels of refined petrol and diesel per day, while the scourge of smuggling has cost it billions of CFA francs (millions of dollars) in lost revenue, according to the authorities. The current shortage on the black market is causing a rush to the few filling stations, especially in areas close to Nigeria which used to rely heavily on smuggled petrol.

Previously, on the black market, petrol in Niger was sold for around 250-275 CFA francs per litre or $1.61-1.76 per US gallon before Nigeria removed its subsidies. Now, the price has increased to between 550-700 CFA francs, making it more expensive compared to regular petrol stations. Despite Nigeria producing 20,000 barrels of refined petrol and diesel per day since 2011, smuggling has cost Niger billions in lost revenue. The current scarcity on the black market has forced people to flock to the limited number of official petrol stations, particularly in areas close to Nigeria that heavily relied on smuggled fuel.

“The petrol has stopped flowing, we’re screwed!” complained Dari Amadou, one of many contraband hawkers striving to make a living on the back streets of Niamey. Ilia Mahamadou, another black market vendor and father of four, was also worried. “The future’s grim,” he said. “Our main source of income is going to dry up.”
The squeeze could also have an impact on the financing of armed jihadist groups in the Sahel. A recent report by the United Nations Office on Drugs and Crime (UNODC) noted that fuel smuggling from Nigeria “even finances terrorist groups” through “taxes” levied for transit and storage in areas under their control.
According to Niger’s oil ministry, official sales doubled between May and June. Prices even increased “tenfold” in Zinder and Maradi in the south and Tahoua in the southwest, according to Kabirou Zakari, director general of hydrocarbons at the Niger’s oil ministry. “As black market stocks run out, demand at the pump increases,” explained Bio Abdourahamane, head of communications for SONIDEP, the Nigerien Company for Oil Products. The firm, he said, had braced for the move and was for now coping with the surge thanks to reserves and supplies from the nation’s sole refinery, located at Zinder.

On the streets of Niamey, Dari Amadou, who relied on selling fuel on the black market, expressed frustration, stating, “The petrol has stopped flowing, we’re screwed!” Another vendor, Ilia Mahamadou, shared similar concerns, saying, “The future’s grim. Our main source of income is going to dry up.” The impact of the petrol shortage could extend beyond individual vendors, potentially affecting the funding of armed jihadist groups in the Sahel. According to a recent report by the United Nations Office on Drugs and Crime (UNODC), fuel smuggling from Nigeria plays a role in financing these groups through transit and storage taxes in areas they control.

In May and June, official petrol sales in Niger doubled, as reported by the oil ministry. Prices have even risen “tenfold” in Zinder, Maradi, and Tahoua, according to Kabirou Zakari, the Director General of Hydrocarbons at Niger’s oil ministry. With the black market stocks running out, there is increasing demand at official petrol stations. Bio Abdourahamane, the Head of Communications for SONIDEP, the Nigerien Company for Oil Products, explained that they were prepared for the change and were handling the surge with the help of reserves and supplies from the country’s sole refinery, located in Zinder.

But “when the reserves run out, decisions will have to be made,” he said. “Niger will have to purchase petrol from elsewhere or operate the Zinder refinery at full capacity to boost output.”
On the other side of the coin, transport costs in Niger are going up, especially on main roads leading to Nigeria where petrol is scarcer, and this is having a domino effect on prices in other sectors. At some markets, the price for a 100-kilogramme (220-pound) sack of maize has gone up 4,000 CFA francs to 28,000.
At N’Konni, a town close to Nigeria, “activity has slumped” because of the end of the black market, said local journalist Daouda Kaka. The petrol smuggling networks “are a lifeline for thousands of youngsters”, said Zinder University sociologist Abdoul-Wahab Soumana. “If this work disappears, some of them could turn to crime.”

However, Abdourahamane emphasized that when the reserves run out, Niger will have to make decisions, including purchasing petrol from other sources or operating the Zinder refinery at full capacity. As a result of the petrol scarcity, transportation costs in Niger are rising, particularly on main roads leading to Nigeria where petrol is scarce. Consequently, this increase in costs is affecting prices in various sectors. For example, at some markets, the price for a 100-kilogram sack of maize has risen by 4,000 CFA francs to 28,000.

The impact of the end of the black market is being felt in towns like N’Konni, which is close to Nigeria. Local journalist Daouda Kaka noted that the activity in N’Konni has significantly declined. The petrol smuggling networks have been a lifeline for many young people, and their disappearance could lead some of them to resort to criminal activities, as highlighted by Zinder University sociologist Abdoul-Wahab Soumana.

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