By Daniel Edu
Jeannine, a fuel vendor in Benin’s economic capital, Cotonou, finds her business dwindling as a result of Nigeria’s recent decision to end its longstanding petrol subsidy. The motorbikes and cars that used to rely on her cheap, smuggled gasoline from Nigeria are now opting to refuel at petrol stations. In the past two weeks, the prices of black market fuel in Benin have doubled due to Nigeria’s policy change. A liter of “Kpayo,” the smuggled gasoline sold on Beninese roads, now costs 700 CFA francs (approximately 1 euro), surpassing the market price at service stations. Nigeria has also experienced tripled fuel prices and subsequent increases in food, transport, and power costs since the subsidy was terminated by President Bola Ahmed Tinubu. Tinubu sees the subsidies as financially unsustainable, resulting in substantial losses for the state and widespread smuggling of subsidized gasoline to neighboring countries.
The smuggling of low-cost Nigerian gasoline to Benin and other neighboring nations has been a long-standing practice, with informal sellers reselling the fuel on the black market. The discontinuation of subsidies has significantly impacted the local economy, causing taxi fares in Cotonou to nearly double and sparking protests by motorcycle taxi unions in Cameroon. Many individuals, like Jeannine, who rely on the fuel trade for their livelihoods, are concerned about their financial stability and are unable to explore other business opportunities due to lack of savings.
While some businesses, such as gas stations, have experienced a surge in demand, leading to temporary closures due to depleted stock, others are witnessing the hardships faced by the population. The closure of Nigeria’s border with Benin in 2019, which lasted for 18 months, had previously crippled the Beninese economy. Benin’s reliance on its larger Nigerian neighbor, with its vast population, booming economy, and significant oil production, has once again been underscored by the recent subsidy elimination.
Benin’s Seme-Krake border post, a hub of trading activities including currency exchange, transportation, and small-scale gasoline trafficking, has seen a slowdown. However, another ongoing activity persists despite Nigeria’s ban on rice imports. Cars loaded with bags of rice from the port of Cotonou in Benin are openly unloaded on