Nigeria petroleum importation declines by 3.58 billion liters over subsidy removal
Nigeria has seen a significant reduction in petrol imports since President Bola Tinubu’s removal of the fuel subsidy in May 2023.
According to the latest petroleum products distribution report by the National Bureau of Statistics (NBS), petrol imports dropped by 3.58 billion litres in the second half of 2023 compared to the first half. The country imported 8.36 billion litres of Premium Motor Spirit (PMS) in the second half of the year, a sharp decline from the 11.94 billion litres recorded in the first half, marking a 29.99% decrease.
Year-on-Year Decline
This downward trend becomes even more apparent when compared to the second half of 2022, where petrol imports totalled 11.98 billion litres. In comparison, the 8.36 billion litres imported in the latter half of 2023 represents a 30.22% drop, a reduction of 3.62 billion litres year on year.
For the full year of 2023, Nigeria imported 20.30 billion litres of PMS, down from 23.54 billion litres in 2022, reflecting a 13.77% year-on-year reduction. These figures underscore the profound impact the subsidy removal has had on the volume of petrol brought into the country.
President Tinubu announced the fuel subsidy removal during his inauguration speech on May 29, 2023. The move led to a rapid surge in fuel prices nationwide, with some stations selling PMS at up to N700 per litre.
Falling Import Costs
According to the 2023 full-year foreign trade data, Nigeria’s fuel import costs saw a slight reduction of 2.6%, falling from N7.7 trillion in 2022 to N7.5 trillion in 2023. The country spent N3.5 trillion on fuel imports in the second half of 2023, down 10.26% from the N3.9 trillion recorded in the first half.
In contrast, for the first six months of 2024, Nigeria’s petrol import bill surged to N5.8 trillion, an 87.09% increase from the N3.1 trillion spent in the same period of 2023. This significant rise in import costs has been attributed to high crude oil prices coupled with a weakened naira.
Minister of Information Idris Mohammed earlier stated that domestic petrol consumption dropped by 50% following the subsidy removal, cutting the country’s usage from 2 billion litres monthly. He added that the decline in importation may indicate that petrol imports are being diverted to other destinations.
A Controversial Policy
The removal of the fuel subsidy has not come without controversy. While the government maintains that the decision was crucial to redirect resources to key sectors such as healthcare, education, and infrastructure, critics argue that the policy disproportionately affects lower-income Nigerians. The spike in fuel prices has triggered concerns over rising living costs and the overall economic burden on citizens.
Further complicating matters, there have been reports suggesting that the subsidy may not have been entirely eliminated. Claims have surfaced that the Nigerian National Petroleum Company (NNPC) might still be incurring costs related to fuel imports, raising questions about the transparency of the subsidy removal process.
The controversy deepened when it was revealed that the NNPC had sought financial assistance from the federal government to cover fuel import costs, even after the removal of the subsidy.
This has sparked fresh debates over whether the policy has been fully implemented or if the government is continuing to shoulder some hidden fuel import costs.
The removal of the fuel subsidy has clearly impacted Nigeria’s petrol importation, with a notable decline in volume. However, the policy’s implementation and its broader effects on the economy continue to generate debate, as Nigerians grapple with the realities of higher fuel prices and the cost of living.
