The elimination of fuel subsidies in Nigeria has had a notable impact, leading to the collapse of a thriving black market in West African nations. This informal sector, which played a central role in the region’s economic activities, has been disrupted due to a sudden doubling of the price of smuggled petrol, known as Premium Motor Spirit (PMS), from Nigeria.
According to a report by Reuters, black market fuel vendors and commercial drivers in Cameroon, Benin, and Togo, who heavily relied on smuggled Nigerian petrol, have witnessed their businesses crumble since the subsidy removal. As fuel supplies dwindle, long lines have formed at official petrol stations, where prices are now competitive.
In the town of Garoua, located in North-West Cameroon near the Nigerian border, the cost of a liter of petrol on the black market used to be around 300 CFA francs (about $0.48), but it has skyrocketed to a minimum of 600 CFA francs, causing dissatisfaction among customers who perceive the high prices as unjustified.
The repercussions of this situation extend to commercial motorcycle operators, commonly known as okada, leading to conflicts between riders barely making ends meet and customers demanding lower fares regardless of the circumstances.
One rider, Ousmanou Mal Djoulde, in Garoua, has been forced to double his fares, resulting in many customers refusing to pay and his business becoming painfully slow, as reported by Reuters.
The trade-in of black market fuel holds such significance in the local economy that authorities often turn a blind eye or are complicit. A Reuters reporter in Garoua observed a Cameroonian customs officer seated on a motorcycle being refueled with smuggled Nigerian petrol.
Unfortunately, there is no dependable information on the amount of fuel smuggled from Nigeria. Mele Kyari, the head of the Nigerian National Petroleum Corporation, admitted that 66 million liters of petrol are taken out of their depots daily, but he was unable to give an exact figure for local consumption. It is widely accepted that smuggling is widespread.
In Benin and Togo, two countries that neighbor Nigeria, the supply of contraband fuel has decreased, and the number of customers has also dropped. On the other hand, the official petrol stations have seen a sudden rise in activity. At the Hilacondji border crossing between Togo and Benin, some of the black market fuel stalls have closed, leaving vendors with empty containers waiting for potential deliveries.
Due to the lack of improvement, some people have had to look for other ways to make a living, such as fishing or engaging in other small businesses. The closure of the informal fuel depots has left those who were employed without work, adding to the unemployment rate.
The United Nations has reported that over 80% of employment in Africa is in the informal sector, making it a major contributor to economic activity. In Cotonou, the commercial capital of Benin, located about 60 kilometers from Nigeria, long queues have formed at the official petrol stations. Some of these stations have had difficulty meeting the sudden surge in demand, especially from commercial motorcyclists, locally known as “zemidjan.”
Janvier, a worker at the JNP fuel station in Cotonou, said that their daily sales have gone up from around 2,000 liters to up to 7,000 liters. However, the high demand has caused supply shortages, forcing them to turn away customers.
