Nigeria’s Petrol Importation Drops by 3.58 Billion Litres After Subsidy Removal

Nigeria has recorded a significant reduction in petrol importation following President Bola Tinubu’s removal of fuel subsidy in May 2023, according to the National Bureau of Statistics (NBS). The total fuel imports decreased to 20.30 billion litres in 2023 from 23.54 billion litres in 2022, representing a 13.77% year-on-year decline.

The NBS reported a 29.99% reduction in petrol imports in the second half of 2023 compared to the first half, with 8.36 billion litres of Premium Motor Spirit (PMS) imported in the first half of 2023, down from 11.94 billion litres in the first half. This downward trend is even more notable when compared to the second half of 2022, with a 30.22% drop equivalent to a reduction of 3.62 billion litres.

Monthly fuel imports in 2023 showed a fluctuating trend, with 2.09 billion litres imported in January, reducing to 1.99 billion in February, and increasing to 2.29 billion in March. The country’s spending on fuel imports decreased by 2.6% from N7.7 trillion in 2022 to N7.5 trillion in 2023.

Additionally, the volume of Automotive Gas Oil (diesel) imported into Nigeria rose to 4.94 billion litres in 2023 from four billion litres in 2022. Local production of diesel increased by 6.76% to 109.39 million litres in 2023, while Household Kerosene production grew by 56.02% to 69.71 million litres.

The subsidy removal has sparked controversy, with the government arguing it was necessary to allocate resources to essential sectors, while economists contend it unfairly impacts lower-income Nigerians. The significant increase in petrol imports in 2024, reaching N5.8 trillion in the first six months, has raised concerns about the subsidy removal’s effectiveness.

Minister of Information Idris Mohammed noted that Nigeria’s domestic consumption dropped by 50% from two billion litres following the subsidy removal. The decline in importation suggests these imports are being redirected to other destinations.

The ongoing debate surrounding the subsidy removal’s transparency and effectiveness continues, with reports indicating the Nigerian National Petroleum Company Limited may still be incurring fuel import costs.