- Nigerians Raise Alarm..,
By Tolúlopé Olátúnjí
Despite a dramatic 50 per cent plunge in petrol consumption, Nigeria’s petrol importation costs surged by over 31%, according to a report from the National Bureau of Statistics (NBS).
The NBS reported that the country spent a staggering N2.63 trillion on Premium Motor Spirit (PMS) imports in the first quarter of 2024, accounting for a 31.4 per cent increase from the N1.81 trillion expenditure in the previous quarter.
Data reveals that in Q1 2023, Nigeria imported 6.37 billion litres of petrol at a cost of N1.49 trillion, with the subsidy regime setting the price at N234 per litre. In comparison, the previous year saw an expenditure of N1.51 trillion for 5.78 billion litres, equating to N260 per litre. This development has triggered massive concerns in Nigeria about the worsening economic situation.
It would be recalled that President Bola Ahmed Tinubu’s bold declaration on May 29, 2023, had ended the fuel subsidy era, sending petrol prices soaring to around N550 per litre, influenced further by the naira’s devaluation. The current pump price ranges between N600 and N700 per litre.
Following the subsidy removal, the Federal Government touted a 50% reduction in national oil consumption.
Recall that Minister for Information and National Orientation, Mohammed Idris had stated in February that Petrol importation has been reduced by 50% since the withdrawal of the fuel subsidy,” yet, the cost of PMS imports continues to rise.
However, economic experts attribute this development to the naira’s depreciation against the dollar, despite the reported consumption drop. In Q1 2024, with the country importing approximately 1 billion litres per month, the import cost averaged N878 per litre.
Meanwhile, this discrepancy has fueled accusations of a covert subsidy scheme, allegations the government vehemently denies. Minister of State for Petroleum Resources, Heineken Lokpobiri, reaffirmed recently that: “Subsidy is gone. There could be strategic interventions, but officially, the subsidy is gone.”
Recall also that the International Monetary Fund (IMF) has warned that under-recovery of costs could balloon subsidy costs to 3% of GDP in 2024, up from 1% in 2023, predicting the implicit fuel subsidy could devour up to N8.4 trillion in 2024.
Nigeria’s petrol import paradox continues to spark outrage and calls for transparency as Nigeria grapples with soaring import costs amid reduced consumption.
