Subsidy Removal Spurs 50% Drop in Petrol Imports, says Nigerian Govt

The Nigerian government has revealed a significant decline in petrol imports since the removal of subsidy on the commodity, indicating a pivotal shift in the nation’s fuel dynamics.

Speaking at a press briefing in Abuja, the Minister of Information and National Orientation, Mohammed Idris, affirmed that the withdrawal of fuel subsidy had led to a notable reduction in petrol importation by 50 per cent.

Subsidy Removal Causes Decline In Fuel Import

“Petrol importation has been reduced by 50 per cent since the withdrawal of the fuel subsidy,” stated the information minister.

President Bola Tinubu declared the removal of the petrol subsidy during his inaugural speech on May 29, 2023. The subsequent withdrawal of the subsidy swiftly resulted in a surge in petrol prices from approximately N198/litre to over N600/litre.

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Prior to the subsidy removal, Nigeria was consuming about 66 million litres of Premium Motor Spirit (PMS) daily. The Nigerian National Petroleum Company Limited (NNPCL), the sole importer of petrol in the country, disclosed spending over N400 billion monthly on fuel subsidies.

Financial Strain Led To Subsidy Removal

Mele Kyari, the Group Chief Executive Officer of NNPCL, emphasized the adverse impacts of the subsidy on the company’s cash flow, attributing the withdrawal to immense financial strain.

With petrol importation now reduced by 50 per cent, corresponding to a decrease of about 33 million litres daily, Nigeria is estimated to be saving approximately N19.3 billion daily and N579.1 billion monthly. This significant decline underscores the financial relief achieved through the subsidy removal.

Drop In Petrol Consumption

Furthermore, oil marketers have reported a substantial drop in petrol consumption, leading to operational challenges. Bennet Korie, the National President of Natural Oil and Gas Suppliers Association of Nigeria, highlighted the struggle of marketers amidst dwindling sales and urged government intervention to avert further economic fallout.

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In a related development, the African Export-Import Bank disclosed its role as the largest financier of oil and gas projects in Africa, with Nigeria receiving 60 per cent ($18 billion) of the total investments. This underscores the critical need for sustainable energy solutions across the continent.

As Nigeria navigates the aftermath of subsidy removal, efforts are underway to bolster economic resilience and foster inclusive growth. President Tinubu’s administration aims to mitigate the impact of the subsidy removal through innovative social welfare initiatives and ongoing security reforms.

Government Steer Towards Economic Stability After Subsidy Removal

The government remains committed to steering the nation towards economic stability and progress, as evident in the recent strides in GDP growth, capital importation, and oil production.

In conclusion, the subsidy removal has catalyzed a transformative shift in Nigeria’s fuel sector, with significant implications for economic sustainability and energy security.

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