Nigeria Witnesses Drastic Drop in Petrol Imports Post Subsidy Removal – Savings Reach N579.1 Billion Monthly

In a recent statement, Minister of Information and National Orientation, Mohammed Idris, revealed that Nigeria’s petrol imports have plummeted by 990 million litres per month, marking a 50% reduction since the removal of the fuel subsidy on Premium Motor Spirit (PMS).

President Bola Tinubu officially declared the end of fuel subsidy on May 29, 2023, prompting the Nigerian National Petroleum Company Limited (NNPCL), the exclusive importer of PMS, to withdraw the subsidy within 24 hours. This move led to a significant surge in petrol prices, reaching between N620/litre and N700/litre.

During the ministerial press briefing series, Idris emphasized that the removal of the subsidy has resulted in a notable decline in fuel imports, saving the country approximately N579.1 billion monthly.

Prior to the subsidy withdrawal, NNPCL’s Group CEO, Mele Kyari, disclosed that Nigeria consumed around 66 million litres of PMS daily, with over N400 billion spent monthly on subsidies. The reduction in petrol imports by 50% suggests a decrease of about 33 million litres daily, equivalent to 990 million litres monthly.

Oil marketers confirmed the drop in consumption, with filling stations closing down due to diminished business. Bennett Korie, National President of Natural Oil and Gas Suppliers Association of Nigeria, noted the challenging environment for oil marketers, citing reduced purchasing and high bank interest rates.

In an unexpected turn, the African Export-Import Bank announced its status as the largest financier of oil and gas projects in Africa, investing $30 billion in industry projects. Nigeria received 60% of this funding, amounting to $18 billion, despite reduced global support for hydrocarbon ventures.

Additionally, NNPCL collaborated with the Organization of the Oil Exporting Countries (OPEC) to achieve Nigeria’s goals of attracting investments and growing production. OPEC Secretary-General Haitham al-Ghais commended NNPCL’s inclusive view of energy and emphasized the need for market stability to attract investors.

Despite initial challenges, Idris highlighted positive outcomes from President Tinubu’s reforms, with a 3.46% GDP growth in Q4 2023 and a notable increase in capital importation. The Nigerian Stock Exchange All Share Index also reached its highest ever at 100,000 points, reflecting investor confidence.

President Tinubu’s directive to design a Social Security Unemployment Programme and implement a Social Consumer Credit Scheme further demonstrates the government’s commitment to addressing economic challenges. The National Social Investment Programme is set to resume direct payments of N25,000 to 15 million households.

As the government tackles insecurity, Idris expressed confidence in the ongoing efforts, stating, “Without any doubt, we are winning the war against insecurity.” The minister encouraged Nigerians to embrace adjustments in light of temporary economic hardship.