How Nigeria’s fuel subsidy removal worsened Niger’s petrol scarcity

Nigeria’s fuel subsidy removal nearly two years ago has been attributed as one of the reasons Niger has been experiencing fuel scarcity in recent weeks.

Recall that in May 2023, President Bola Ahmed Tinubu’s government removed the fuel subsidy, leading to a sharp rise in petrol prices.

While the lag effect of the fuel subsidy removal is still felt in Nigeria’s economy, the fuel scarcity in Niger in recent days shows that the junta-led country has been hit even harder.

Data indicates that Niger’s fuel consumption is 50 percent dependent on Nigeria’s petrol. Meanwhile, its Nigerien Company for Oil Products refinery (Sonidep) and other local sources meet the remaining half of its fuel demand.

Supporting data from Nigeria’s National Bureau of Statistics shows that in 2024 alone, trade between Nigeria and Niger surged by 82 percent despite ongoing diplomatic tensions between the two countries. The total trade volume between the two West African neighbors climbed to N91.92 billion in 2024, up from N50.48 billion recorded in 2023.

The Commercial Director of the state-owned Nigerien Company for Oil Products (Sonidep), Maazou Oumani Aboubaca, confirmed this, stating that Niger “can no longer satisfy domestic demand.”

He added, “The fuel that came into Niger illegally from Nigeria represented up to half of the market. It supplied the large regions near the border between the two countries.”

Meanwhile, there is speculation that Nigerien officials who visited Abuja have secured a deal to receive 300 trucks of petrol to be supplied to Niger.

Reacting to the development, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, stated that the removal of the fuel subsidy in Nigeria, along with the Nigeria Customs Service’s Operation Whirlwind at the borders, is taking a toll on Niger and other neighboring countries.

“When Nigeria was subsidizing fuel, other neighboring countries (Niger, Benin, Cameroon, and others) were also benefiting from the subsidy. Now, with the rise in fuel prices in Nigeria, smuggling has reduced. The ongoing Operation Whirlwind has further curtailed smuggling. The only option left for Niger and other neighboring countries that relied on our subsidized fuel is to import PMS directly if they cannot refine it themselves.

“When we subsidized our fuel, they were benefiting, and smuggling was thriving. Now that we have deregulated the downstream sector, smuggling has reduced. Security agencies are active along the borders under Operation Whirlwind. This has halted illegal fuel exports to Niger, which is one of the major reasons for their current fuel crisis,” Ukadike explained.

On his part, the President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, stated that Nigeria, with the Dangote Refinery and other refineries, has the capacity to play the ‘big brother’ role for Niger.

While Nigerians buy petrol within the range of N860 to N1,000 per liter, Nigeriens purchase the product for between N2,500 and N8,750, depending on the location.

Speaking on the situation, a Nigerian businessman, Abubakar Usman, was quoted as saying, “There is a serious scarcity of fuel in the country. It depends on where one is getting the fuel.

“In Konni, the border town between Nigeria and Niger, you can get a litre at 1,200 CFA, which is about N2,500. If you go to Agadez, the same litre of fuel is 3,000 CFA, equivalent to N7,500 per litre. In Arlit, a local government under Agadez, which is the border town between Niger and Algeria, it is 3,500 CFA, which is about N8,750 when converted to our currency.”

Recall that a security analyst, Zagazola Makama, in an article he published on X recently, chronicled how Niger’s fuel scarcity started.

He said the trouble began in March 2024 when the China National Petroleum Corporation granted the Nigerien government a $400 million advance, using future crude oil deliveries as collateral.

A fallout between the Niger military junta and the Chinese led to the collapse of the country’s oil sector.

How Nigeria’s fuel subsidy removal worsened Niger’s petrol scarcity