Business

Almost 2,000 Petrol Stations Shut Down In Protest Against Anti-Smuggling Crackdown In North-East Nigeria 

Nearly 2,000 petrol outlets were shut in Nigeria’s North-east on Monday to protest against an anti-smuggling operation that targeted some operators, the local head of the Independent Petroleum Marketers Association (IPMAN) said, forcing motorists to buy from the black market.

IPMAN Chairman for Adamawa and Taraba states, Dahiru Buba, told Reuters that petrol stations stopped operations after the Nigeria Customs Service (NCS) impounded tanker trucks and shut some fuel outlets on suspicion they were smuggling petrol to neighbouring Cameroon.

Black market fuel vendors in Cameroon, Benin and Togo have for years relied on cheap gasoline smuggled from Nigeria, the report said.

When Nigeria scrapped a petrol subsidy last year, that black market trade collapsed, but the product has become cheaper again after Nigeria capped the price since June 2023 despite its currency sharply weakening.

Under “Operation Whirlwind”, Customs initially impounded some tanker trucks belonging to IPMAN members and released them after the association protested. But more trucks were seized and several fuel stations were shut, forcing fuel station operators to close outlets en-masse in protest, said Buba.

“We wrote to them (Nigeria Customs) again but there were no responses that is why we decided to go on strike,” he said, adding that over 1,800 outlets had ceased to operate.

“This is our business and we cannot be quiet when our members are treated this way,” Buba added.

Customs spokesperson for Adamawa and Taraba,  Mangsi Lazarus, told Reuters that tanker trucks were seized because they were being used to smuggle petrol.

In Adamawa capital Yola, black market traders quickly took advantage of the shortages to sell petrol for N1,400  ($0.9459) a litre, compared to between N650 and N750  at the pump.

Meanwhile, oil prices edged higher on Monday, spurred by the prospect of strong  driving demand in the coming season and as tensions in the Middle East and drone attacks on Russian refineries led to concerns about supply. An easing US dollar added to the crude price strength.

Brent futures for August delivery were up 80 cents to $86.04 a barrel, or a 0.9 per cent gain, by 1:45 p.m. while  US crude gained 90 cents, or 1.1 per cent, to $81.63 per barrel.

Both benchmarks advanced about 3 per cent last week for their second consecutive weekly upswing.

“The chief underlying reason behind the price strength … is the growing confidence that global oil inventories will inevitably plunge during the summer in the northern hemisphere,” said Tamas Varga of oil broker PVM, referring to seasonal demand for oil products.

After last week’s big decline in US crude and petrol inventories, traders are waiting to see whether the report due on Wednesday will provide further evidence of sustained strong petrol demand, said Bob Yawger, director of energy futures at Mizuho in New York.

“It has to sustain for this positive narrative to continue in the market,” said Yawger, adding that the growing electric vehicle market is eroding petrol share of the transportation market.

Geopolitical risks in the Middle East and an increase in Ukrainian drone attacks on Russian refineries also underpinned oil prices, Reuters said.

EU countries on Monday agreed on a new package of sanctions against Russia over its war in Ukraine, including a ban on reloading Russian liquefied natural gas (LNG) in the EU for further shipment to third countries.

An easing US currency made dollar-denominated commodities such as oil more attractive to buyers using other currencies.

The dollar weakened from a near eight-week high as traders went back on alert for intervention to support the yen after the Japanese currency danced with the 160 per dollar level.

The dollar index, measuring performance against six major currencies, had climbed on Friday and was up slightly on Monday after data showed US business activity at a 26-month high in June.

Emmanuel Addeh 

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