Nigeria Experiences Drop in Petrol Imports After Fuel Subsidy Removal
The National Bureau of Statistics (NBS) has reported a decline in petrol importation volumes in Nigeria, following the elimination of fuel subsidies initiated by President Bola Tinubu in May 2023. According to the latest petroleum products distribution statistics released by the NBS on Tuesday, the country’s total fuel imports decreased to 20.30 billion litres in 2023, down from 23.54 billion litres in 2022, reflecting a year-on-year reduction of 13.77 percent.
The data indicates that there was a notable drop in petrol imports, which fell by 3.58 billion litres in the latter half of 2023 compared to the first half. Specifically, Nigeria imported 8.36 billion litres of Premium Motor Spirit (petrol) in the second half of 2023, a significant decline from the 11.94 billion litres recorded in the first half, amounting to a 29.99 percent reduction.
The report also noted that the total volume of Premium Motor Spirit truck outs in 2023 stood at 20.22 billion litres, representing a 16.96 percent decrease from the previous year’s figure of 24.35 billion litres. Additionally, the statistics indicated that petrol imports in 2023 totaled 20.30 billion litres compared to 23.54 billion litres in 2022, marking a decrease of 13.77 percent. This trend is even more pronounced when viewed against the latter half of 2022; petrol imports during that period were recorded at 11.98 billion litres, which represents a 30.22 percent decrease compared to H2 2023, equating to a drop of 3.62 billion litres.
Monthly fuel import data reveals a fluctuating pattern throughout 2023. The country imported 2.09 billion litres in January, saw a slight decrease to 1.99 billion in February, and then rose to 2.29 billion in March. This trend continued with 1.91 billion litres in April and 2.01 billion in May, followed by further declines to 1.64 billion in June, 1.45 billion in July, and 1.09 billion in August. The last few months of the year showed imports of 1.21 billion litres in September, 1.16 billion in October, 1.55 billion in November, and 1.88 billion in December. These numbers underscore the impact of the subsidy removal on Nigeria’s petrol import volumes.
In contrast, the volume of Automotive Gas Oil (diesel) imported into Nigeria rose to 4.94 billion litres in 2023, up from four billion litres in 2022. The NBS also reported that local production of diesel reached 109.39 million litres in 2023—a 6.76 percent increase from 102.47 million litres produced in 2022. Furthermore, local production of Household Kerosene surged to 69.71 million litres in 2023, a significant increase of 56.02 percent from 44.68 million litres in 2022.
Upon taking office on May 29, 2023, President Tinubu announced the full removal of the petrol subsidy in his inaugural speech, which led to immediate spikes in fuel prices across Nigeria, with costs reaching as high as N700 per litre at some stations.
According to comprehensive foreign trade data for 2023, Nigeria’s expenditures on fuel imports dipped by approximately 2.6 percent, falling from N7.7 trillion in 2022 to N7.5 trillion in 2023. A semi-annual analysis reveals that the nation spent N3.5 trillion on fuel imports in the latter half of 2023, reflecting a 10.26 percent decrease from the N3.9 trillion incurred in the first half. For the first six months of 2024, petrol import expenses skyrocketed to N5.8 trillion, an 87.09 percent increase compared to the same period in 2023.
This surge in petrol import expenses has been attributed to soaring crude oil prices and a weakened naira. The Minister of Information, Idris Mohammed, previously stated that domestic petrol consumption had plummeted by 50 percent from two billion litres following the subsidy removal, suggesting that redirected imports may be leaving Nigeria’s market.
The removal of fuel subsidies has ignited significant debate. The government maintains that the subsidy removal was essential to redirect resources toward critical sectors such as healthcare, education, and infrastructure. In contrast, economists argue that the changes disproportionately affect lower-income Nigerians, contributing to rising living costs due to increased fuel prices.
Concerns linger over potential confusion regarding the efficacy of the subsidy dismantling, as there are allegations that the Nigerian National Petroleum Company Limited (NNPC) may still be incurring costs associated with fuel imports. This suspicion strengthened when it was reported that the NNPC sought financial support from the federal government to cover fuel import expenses, raising questions about the transparency of the government’s subsidy policy and the effectiveness of its implementation.
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