Price spike in Nigerian contraband petrol roils region’s informal sector
Businesses of vendors and commercial drivers in Cameroon, Benin and Togo collapse after a subsidy was scrapped
26 June 2023 - 09:10
byDesire Danga Essigue
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Yaouba Ahmadou, in white dress, a semi-wholesaler of Nigeria's contraband fuel speaks with his workers in Garoua, Cameroon on June 21 2023. Picture: REUTERS/Desire Danga Essigue
Garoua, Cameroon — Things have been topsy-turvy lately on the roadsides of West African nations where cheap contraband petrol from Nigeria has abruptly doubled in price, upending an informal sector that is central to the region’s economic activity.
Since Nigeria scrapped a state fuel subsidy on May 31, black market fuel vendors and commercial drivers in Cameroon, Benin and Togo who relied heavily on petrol smuggled from Nigeria have seen their businesses collapse.
With supplies dwindling, queues have been forming at official petrol stations, where fuel is now competitively priced.
In Garoua, a town in northwest Cameroon about 60km east of the Nigerian border, a litre of petrol on the black market used to sell for about 300 CFA francs ($0.48). Now the minimum is 600 CFA francs, vendors said.
“Supply has become scarce and customers think we are ripping them off with this high price, yet it is from Nigeria that prices have soared,” said Perevet Dieudonne, a black market seller.
The knock-on effects on motorcycle-taxis, a form of public transport ubiquitous in West Africa, include conflict between riders who often live hand-to-mouth and customers who demand cheap fares no matter what.
Ousmanou Mal Djoulde, a rider in Garoua, said he has been forced to more than double his fares. Many customers are refusing to pay and business is agonisingly slow.
The trade in black market fuel is so central to the local economy that authorities either turn a blind eye or are complicit. A Reuters reporter in Garoua saw a Cameroonian customs officer sitting on a motorcycle-taxi that was being refuelled with smuggled Nigerian petrol.
Rampant smuggling
There is no reliable data on the amount of fuel that is smuggled from Nigeria.
The head of Nigeria’s state-controlled oil firm, NNPC, the sole supplier, said early this month 66-million litres of petrol left its depots daily but could not say how much was consumed locally, though he admitted smuggling was rampant.
Independent energy experts and Nigeria’s Dangote Petroleum Refinery — which expects to start producing petrol from early August to alleviate chronic fuel shortages — put Nigeria’s total daily consumption below 40-million litres.
In Benin and Togo, small nations west of Nigeria, contraband fuel vendors have lost supplies and customers while formerly sleepy official petrol stations are suddenly busy.
At Hilacondji, a border crossing between Togo and Benin, some black market fuel stalls were shut, while at others vendors waited among rows of empty plastic jerrycans for potential deliveries.
“While we wait for the situation to improve, some have gone into fishing or other small businesses,” said Ayi Hilla, who had been making a living from selling contraband fuel for 10 years but is now focusing on running a small roadside bar.
Some informal fuel depots are being demolished, and men who used to work there unloading and carrying petrol are now unemployed.
More than 80% of employment in Africa is informal, according to the UN, making the informal sector a key driver of economic activity.
In Cotonou, the commercial capital of Benin that is about 60km from Nigeria, queues have been building up at official petrol stations and some have been unable to meet the sudden surge in demand, especially from zemidjan, the local word for motorcycle-taxis.
“Before, we were selling about 2,000 litres per day, but now we are selling up to 7,000 litres per day,” said a worker at the JNP fuel station who gave his first name, Janvier. He had just turned away four customers because supplies had run out.
“The zemidjan-men are even fighting to get served,” said Janvier.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Price spike in Nigerian contraband petrol roils region’s informal sector
Businesses of vendors and commercial drivers in Cameroon, Benin and Togo collapse after a subsidy was scrapped
Garoua, Cameroon — Things have been topsy-turvy lately on the roadsides of West African nations where cheap contraband petrol from Nigeria has abruptly doubled in price, upending an informal sector that is central to the region’s economic activity.
Since Nigeria scrapped a state fuel subsidy on May 31, black market fuel vendors and commercial drivers in Cameroon, Benin and Togo who relied heavily on petrol smuggled from Nigeria have seen their businesses collapse.
With supplies dwindling, queues have been forming at official petrol stations, where fuel is now competitively priced.
In Garoua, a town in northwest Cameroon about 60km east of the Nigerian border, a litre of petrol on the black market used to sell for about 300 CFA francs ($0.48). Now the minimum is 600 CFA francs, vendors said.
“Supply has become scarce and customers think we are ripping them off with this high price, yet it is from Nigeria that prices have soared,” said Perevet Dieudonne, a black market seller.
The knock-on effects on motorcycle-taxis, a form of public transport ubiquitous in West Africa, include conflict between riders who often live hand-to-mouth and customers who demand cheap fares no matter what.
Ousmanou Mal Djoulde, a rider in Garoua, said he has been forced to more than double his fares. Many customers are refusing to pay and business is agonisingly slow.
The trade in black market fuel is so central to the local economy that authorities either turn a blind eye or are complicit. A Reuters reporter in Garoua saw a Cameroonian customs officer sitting on a motorcycle-taxi that was being refuelled with smuggled Nigerian petrol.
Rampant smuggling
There is no reliable data on the amount of fuel that is smuggled from Nigeria.
The head of Nigeria’s state-controlled oil firm, NNPC, the sole supplier, said early this month 66-million litres of petrol left its depots daily but could not say how much was consumed locally, though he admitted smuggling was rampant.
Independent energy experts and Nigeria’s Dangote Petroleum Refinery — which expects to start producing petrol from early August to alleviate chronic fuel shortages — put Nigeria’s total daily consumption below 40-million litres.
In Benin and Togo, small nations west of Nigeria, contraband fuel vendors have lost supplies and customers while formerly sleepy official petrol stations are suddenly busy.
At Hilacondji, a border crossing between Togo and Benin, some black market fuel stalls were shut, while at others vendors waited among rows of empty plastic jerrycans for potential deliveries.
“While we wait for the situation to improve, some have gone into fishing or other small businesses,” said Ayi Hilla, who had been making a living from selling contraband fuel for 10 years but is now focusing on running a small roadside bar.
Some informal fuel depots are being demolished, and men who used to work there unloading and carrying petrol are now unemployed.
More than 80% of employment in Africa is informal, according to the UN, making the informal sector a key driver of economic activity.
In Cotonou, the commercial capital of Benin that is about 60km from Nigeria, queues have been building up at official petrol stations and some have been unable to meet the sudden surge in demand, especially from zemidjan, the local word for motorcycle-taxis.
“Before, we were selling about 2,000 litres per day, but now we are selling up to 7,000 litres per day,” said a worker at the JNP fuel station who gave his first name, Janvier. He had just turned away four customers because supplies had run out.
“The zemidjan-men are even fighting to get served,” said Janvier.
Reuters
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