Nigeria ranks first on the list of countries worldwide affected by oil smuggling. It’s estimated that the country loses US$1.5 billion a month through illegal oil schemes. This despite government efforts to curb the illicit trade.
The country needs 54 million litres of petrol a day to generate energy and power for industrial, automobile, business and domestic activities. However, recent data from the Nigerian National Petroleum Corporation (NNPC) shows that only about 45 million litres are circulated within the country, while seven million are smuggled out of Nigeria to neighbouring countries daily.
This includes Cameroon, where oil smuggling across its borders with Nigeria involves small, medium and large-scale operations. The small-scale operations are carried out by locals who engage in the illegal tapping of petroleum pipelines and oil theft. Criminals transport the stolen crude oil to artisanal refineries along the creeks of the Niger Delta for the refining process.
Another more advanced scheme includes topping up, executed by a network of criminals. It involves lifting more than the authorised volume of crude oil at the onshore and offshore export terminals and then altering the stated volume and delivery terms on the shipping documents. It is therefore a white collar crime committed by professionals in petroleum regulatory agencies, and importers of petroleum products.
The lack of oil-flow meters at the export terminals aid this form of crime. This method of oil theft has far-reaching effects on Nigeria’s economy because of the stolen volume, while the sophistication and networked operations are hard to track. The topped-up portion of the oil is often smuggled across maritime and inland borders into Cameroon and traded in the underground economy.
This persistent oil smuggling from Nigeria is also harming Cameroon’s economy and environment, and is undermining its government’s efforts to ensure a sufficient supply of petroleum products across the country. The problem is often attributed to poor control at the country’s multiple borders and insufficient deployment of security personnel to check for petroleum products trafficked in.
Porous land borders between Nigeria and Cameroon with vast expanses of ungoverned spaces stretching from the states of Adamawa to Taraba and Cross River at the edge of the Gulf of Guinea provide an ideal geography for undetected activity. Even where state security agents from Nigeria and Cameroon are deployed to secure the frontiers, they often look the other way when oil smuggling occurs.
Indeed, the state security forces in both Nigeria and Cameroon are embedded in the value chain of this criminal economy. In Nigeria the Joint Task Force (JTF), comprising Nigeria’s military and police personnel, is tasked with tackling militancy and related organised crimes. JTF members have become complicit and are reported to benefit from the illicit businesses they are mandated to perevent and control. They shield pipeline vandals and artisanal oil refineries in exchange for financial bribes.
In Cameroon, soldiers and police officers are part of the syndicates that trade smuggled oil from Nigeria. They seize smuggled oil from illegal importers, and then sell this on to other merchants who trade the products with end users.
Another factor driving oil smuggling across the Nigeria-Cameroon border is the fuel subsidy system in Nigeria. Here, oil meant for domestic consumption is bought from the NNPC by licensed oil marketers at subsidised rates. Together with corrupt state officials, these marketers divert the oil to neighbouring countries in West and Central Africa where they sell it to fuel importers. These importers in turn sell it at a higher rate. Petrol in Cameroon sells for US$1.18 a litre, compared to US$0.42 a litre in Nigeria.
Both maritime and overland routes are used to smuggle oil from Nigeria to Cameroon. A retired military officer who spoke to ENACT on condition of anonymity confirmed that crude oil stolen from Bayelsa, Delta and Rivers states is often ferried through the creeks to Akwa Ibom and Cross River states.
The petroleum products are then loaded into barrels and transported through the Atlantic Ocean interchange in Oron – considered a hub for fuel smuggling to Cameroon. It’s estimated that the boats smuggle more than 300 000 litres of oil a day to Idenau, a port city on Cameroon’s border with Nigeria.
Cameroon and Nigeria bear the environmental, social and economic impacts of oil smuggling. In Nigeria, sabotage, illegal refining and smuggling have resulted in widespread oil spillages throughout the Niger Delta, which will cost an estimated US$100 billion to clean up.
In Cameroon, oil smuggling constitutes a threat to the national economy. It erodes government revenue accruable through tariffs and lowers the competitiveness of the locally refined oil in the domestic market. Furthermore, oil smuggling perpetuates a culture of lawlessness, poses a national security risk and has the potential to undermine regional stability. Oil smuggled from Nigeria is reportedly trafficked through Cameroon to rebel forces in the Central African Republic.
Tackling oil smuggling across the Nigeria-Cameroon borders is a complex task. But a good place to start would be the governments of both countries showing the political will to address the problem. The NNPC and Department of Petroleum Resources in Nigeria must prioritise the application of technology in crude oil lifting and tracking. This must be done through surveillance, monitoring and metering of petroleum products at export terminals and refineries.
The speedy passage of the Petroleum Industry Bill in Nigeria, with the implementation of its essential contents dealing with governance and host communities’ development, would reduce the rate of oil smuggling in oil-producing communities. This must be matched with full deregulation of the petroleum industry by abolishing the fuel subsidy regime in Nigeria.
Both governments could also demonstrate their mutual concern and political will by developing a bilateral joint task force to aid the arrest and prosecution of both state and non-state actors perpetrating cross-border oil smuggling.
Oluwole Ojewale, Regional Organised Crime Observatory Coordinator – Central Africa