How subsidy removal, tension worsened Niger’s fuel scarcity

•Fuel marketers decry closure of stations at border towns, citizens demand more Nigerian goods

Less than two years after President Bola Tinubu removed the fuel subsidy in Nigeria, the effect of the decision is now being felt deeply by neighbouring Niger Republic.

Also, findings by THE PUNCH on Sunday from fresh data sourced from the National Bureau of Statistics indicated that trade between Nigeria and Niger Republic surged by 82 per cent in 2024 despite ongoing diplomatic tensions between the two countries.

This came as oil dealers raised concern about the closure of filling stations at border towns, stressing that marketers were losing so much revenue due to the development.

Since the start of March, Niger Republic has been grappling with an unprecedented shortage of the most widely used petrol in the West African country.

Economic activities were brought to a halt as filling stations in Niamey, the capital, and those in other towns ran out of petrol recently.

For several years, the country depended majorly on Nigeria for about 50 per cent of its local fuel consumption, industry players and experts confirmed. Petrol was usually smuggled into the neighbouring country through illegal routes.

However, since President Bola Tinubu’s administration removed the fuel subsidy in 2023, the price of petrol skyrocketed, making the smuggling of the product unattractive to illegal traders in border areas.

Aside from Niger, countries like Benin Republic and Togo were also beneficiaries of Nigeria’s petrol subsidy which stopped immediately after Tinubu took over on May 29, 2023.

The removal of subsidy and the attendant rise in the price of petrol has mounted pressure on Niger’s refinery, which can only produce a few tankers of fuel per day.

The Commercial Director of the state-owned Nigerien Company for Oil Products (Sonidep), Maazou Oumani Aboubacar, confirmed that half of the country’s consumption used to come from Nigeria until this was halted by the current administration.

Aboubacar told AFP that the Soraz refinery in Zinder is the only one in the country, saying it “can no longer satisfy domestic demand,” which has surged for more than a year now.

The reason is principally down to the drying up of the flourishing black market supplied from neighbouring Nigeria, a major global producer. It was learnt that the country’s refinery only provides Sonidep with “25 tanker trucks of petrol a day” when the daily national requirement is up to twice that.

Domestic consumption was said to have been boosted by a cut in fuel prices introduced by the military regime that seized power in Niger in 2023. The official stated that two years ago, prices tripled after the Nigerian President ended costly fuel subsidies.

“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,” Aboubacar was quoted as having said.

With Nigerian smugglers supplying up to 50 per cent of the country’s daily petrol consumption up till 2023, the country’s refinery was producing a little to augment the supply from Nigeria.

However, the country faced the reality after Tinubu declared that “the fuel subsidy is gone” and tightened up the borders.

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said the removal of subsidy, as well as the Operation Whirlwind of the Nigeria Customs Service going on across the borders, is taking its toll on Niger and other neighbouring countries.

Ukadike told our correspondent that when petrol was subsidised in Nigeria, neighbouring countries benefitted through illegal merchants who smuggled the product out of the country.

The marketer disclosed that the high cost of petrol reduced illegal bunkering, forcing Niger and others to either refine or import their petroleum products directly at the right price.

“It is true that when Nigeria was subsiding fuel, other neighbouring countries were enjoying subsidies too. As it is now, the rise in the price of fuel in Nigeria has reduced smuggling. The ongoing Operation Whirlwind has also reduced smuggling. The option available to the Niger Republic and other neighbouring countries enjoying our subsidy is to import PMS directly if they cannot refine it.

“When we subsidised our fuel, they were benefitting, and smuggling was thriving. Now that we have deregulated the downstream, smuggling has been reduced; security agencies are all over the borders through Operation Whirlwind. This has stopped illegal fuel export to Niger and it is one of the major reasons for their current fuel crisis,” Ukadike explained.

The PUNCH gathered that the fuel crisis in Niger reached alarming proportions last week after a litre of petrol sold for as high as N8,000 in some parts of the country.

Findings by our correspondents in Sokoto State, which shares a border with Niger, showed that the price of petrol varied depending on the distance from Nigeria.

A transborder businessman from Nigeria, 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 Arilit, 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.”

To solve its fuel crisis, Niger Republic turned to Nigeria despite months of diplomatic tensions and a hostile relationship, as reported by Sunday PUNCH.

The report stated that a delegation of senior officials of the military junta travelled down to Abuja to meet Federal Government representatives behind closed doors.

At the end of the deliberation, 300 trucks of PMS were reportedly approved for delivery to the country as Nigeria, once again, played the ‘big brother’ role.

Sunday PUNCH also reported that a senior government official aware of the development said Nigeria approved the deal with the hope of using it as a “strategic bargaining tool” in ongoing negotiations with Niger.

According to the official, the delegation explained that Niger had been reliant on fuel from a Chinese refinery. However, due to issues with the supplier, the refinery was shut down, leaving the country with limited options.

“We do not want to blow our trumpet. Rather, we want to use it as a bargaining chip for negotiation as we continue to engage with them to bring them back to ECOWAS.

“Let them get more from us. I am confident that gradually they will come back to ECOWAS because they do not have enough resources to import food to sustain their citizens,” the source added.

Reacting, oil marketers said although they were not aware of the deal, the export of 300 tankers to Niger Republic would amount to about 13.5 million litres of petrol. It was calculated that 300 of 45,000-litre capacity trucks are about 13.5 million litres of petrol to be exported to the Niger Republic.

The dealers, however, stated that Nigeria had enough to save the junta-led country from the current fuel crisis rocking it. According to marketers, Nigeria may have passed the days of fuel scarcity as it now has the Dangote refinery, the Port Harcourt refinery, and others producing fuel locally even as importers bring more from other countries.

The National Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, said he was aware of the fuel crisis in Niger Republic, adding that Nigeria had enough to bail out the country.

“I will not say we don’t have that capacity with the refineries we have in the country. I think we have enough to supply Niger Republic,” the IPMAN Vice President said

Similarly, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, agreed that the country had enough PMS to help its neighbours without running into any crisis. “If we have a diplomatic reason for that, it is doable,” Gillis-Harry asserted.

It was further gathered that the fuel crisis in Niger may have also been self-inflicted after a confrontation between the ruling junta and Chinese oil companies which had long dominated the country’s petroleum sector.

A security analyst, Zagazola Makama, in an article he published on X, revealed that trouble began in March 2024 when the China National Petroleum Corporation granted the Nigerien government a $400m advance, using future crude oil deliveries as collateral.

The deal was to help Niger cope with crippling economic sanctions imposed by the Economic Community of West African States following the July 2023 coup in the country. However, when it was time to repay the debt, the junta was cash-strapped.

Instead of negotiating, the military rulers were said to have decided to strong-arm China, slapping an $80bn tax demand on Soraz (Zinder Refinery Company) despite the state-owned oil company, Sonidep already owing Soraz a staggering $250bn.

According to Makama, when China refused to provide additional loans, the junta retaliated by expelling Chinese oil executives from the country and seizing Soraz’s bank accounts. The decision was said to have backfired and led to the collapse of Niger’s petroleum sector, which is heavily reliant on Chinese expertise and investment.

Exports surge

Meanwhile, further findings by The PUNCH showed that trade between Nigeria and Niger rose by 82 per cent in 2024 despite ongoing diplomatic tensions between the two countries.

Data from the National Bureau of Statistics revealed that the total trade volume between the two West African neighbours climbed to N91.92bn in 2024, up from N50.48bn recorded in 2023.

The sharp rise was largely driven by Nigerian exports to Niger, which nearly doubled from N46.51bn in 2023 to N82.38bn in 2024. The PUNCH observed that exports to Niger account for 89.62 per cent of total trade between the two countries.

Imports from Niger also rebounded from N3.97bn in 2023 to N9.53bn in 2024, indicating a recovery in economic exchanges despite strained relations between the two countries.

Trade between Nigeria and Niger has been volatile in recent years. In 2020, total trade was valued at just N6.69bn, before surging to N88.60bn in 2021 as Nigerian exports to Niger jumped to N78.40bn.

The momentum continued in 2022, with total trade reaching N95.76bn. However, economic activity between the two countries nosedived in 2023, dropping by 47.28 per cent to N50.48bn, following the fallout from the political crisis in Niger.

The coup in Niger in July 2023, which led to the removal of President Mohamed Bazoum, triggered a diplomatic standoff between the country and Nigeria, which spearheaded ECOWAS’ sanctions against the military-led government.

The sanctions included border closures, financial restrictions, and the suspension of the electricity supply, all of which disrupted trade and economic activities between the two nations.

Despite the tensions, trade rebounded strongly in 2024. The 82 per cent surge suggests that demand for Nigerian goods in Niger remains robust, while the recovery in imports indicates a gradual resumption of economic ties.

Nigeria and Niger share deep economic and cultural ties, with trade spanning across agricultural products, manufactured goods, petroleum products, and livestock. Nigerian traders have historically supplied Niger with essential goods, while Niger’s exports to Nigeria include livestock, food products, and raw materials.

In August 2024, Nigeria and Niger signed a security cooperation agreement aimed at tackling insurgency, smuggling, and other security threats along their shared borders. The agreement was seen as a step towards rebuilding relations, even though full diplomatic ties between the two countries remain fragile.

The resurgence of trade between the two nations signals a pragmatic approach to economic engagement despite unresolved political differences.

Niger is a major trading partner to Nigeria as noted in the recently released NBS’ foreign trade statistics report for the fourth quarter of 2024, which read in part, “In the same vein, Nigeria’s major trading import partner within ECOWAS was Ivory Coast (N41.40bn), followed by Ghana (N22.96bn), Liberia (N4.04bn), Niger Republic (N2.62bn) and Togo of (N2.21bn) representing (90.45 per cent) of total imports from the ECOWAS region.”

The PUNCH further observed that about N9.34bn worth of cigarettes were imported from Nigeria into Niger Republic. It was also observed that Nigeria’s imports from Niger Republic in Q4 2024 were led by agricultural and raw materials, with fresh or dried dates topping the list, according to data from the NBS.

The report shows that Nigeria imported N956.68m worth of dates, making it the highest-valued import from Niger during the period. The second most imported commodity was cement, excluding white cement, with a total value of N919.07m.

This indicates a growing demand for cement products from Niger, potentially driven by infrastructure development and construction activities in Nigeria.

Fresh strawberries were another notable import, valued at N255.97m. While not a major staple, the increase in strawberry imports suggests rising consumer demand for fresh fruits, possibly linked to Nigeria’s expanding food processing and retail sectors.

Raw materials also featured among the top imports, with whole hides and skins (weighing more than 16kg) accounting for N125.65m in imports. The leather and tanning industry in Nigeria continues to rely on imports of raw hides, especially from neighbouring countries, to sustain production.

Also, Nigeria imported N80.66m worth of shelled pine nuts from Niger. These nuts are often used in food processing and are valued for their nutritional benefits.

The PUNCH further observed that Trade between Nigeria and the Sahel nations of Burkina Faso and Mali experienced significant fluctuations over the past five years, with a notable surge in 2024.

Fresh data from the NBS show a sharp increase in Nigeria’s total trade with both countries, driven by rising exports and a dramatic spike in imports from Mali. Nigeria’s trade with Burkina Faso rose from N12.92bn in 2023 to N18.26bn in 2024, marking a 41.4 per cent increase.

This growth was largely fuelled by higher exports, which climbed from N12.92bn to N18.20bn. Imports from Burkina Faso, though much smaller in volume, also recorded a sharp rise from N4.41bn to N59.16bn within the same period.

Similarly, Nigeria’s trade with Mali saw an unprecedented jump, with total trade reaching N199.21bn in 2024, a massive leap from N12.57bn in the previous year. The most striking change was in Nigeria’s imports from Mali, which surged from just N269.87m in 2023 to N183.79bn in 2024.

This marked a significant shift in trade dynamics, raising questions about the factors driving such an increase.

Meanwhile, Nigeria’s exports to Mali also grew from N12.30bn in 2023 to N15.42bn in 2024, maintaining a steady upward trend.

The rise in trade with Burkina Faso and Mali comes amid the formation of the Alliance of Sahel States, a new regional bloc created by Burkina Faso, Mali, and Niger in September 2023.

The alliance, established through the Liptako-Gourma Charter, aims to enhance security cooperation among the three military-led governments, following their deteriorating relations with the Economic Community of West African States.

The AES was formed as a response to ECOWAS sanctions imposed after the military takeovers in the three countries, leading them to seek alternative economic and security partnerships.

Despite political tensions, economic ties between Nigeria and the three Sahel nations appear to be strengthening.

However, the long-term sustainability of this trade surge remains uncertain, especially as ECOWAS continues to push for a resolution to the political crisis in the region.

The Economic Community of West African States recently activated its standby force to combat terrorism in the sub-region.

The regional body had, in October last year, hinted at the establishment of a 5,000-man kinetic force to tackle terrorism in the region.

Speaking at the 43rd ordinary meeting of the ECOWAS Committee of Chiefs of Defence Staff in Abuja, Nigeria’s Minister of Defence, Abubakar Badaru, said the activation of the standby force underscored the collective determination of member countries to confront the threat of terrorism.

The ECOWAS Commissioner for Political Affairs, Peace, and Security, Dr Abdel-Fatau Musah, also said that despite the recent withdrawal of three African countries from the regional body, ECOWAS would maintain the free movement of persons and goods for their citizens.

He also said plans were in place to mitigate the unforeseen consequences of the withdrawal of Niger, Burkina Faso, and Mali.