On Wednesday, The Minister of Information and National Orientation, Mohammed Idris said Due to the subsidy removed on petrol by President Bola Tinubu, the Importation of petrol into Nigeria reduced by 50%.
Speaking at the third edition of the ministerial press briefing series in Abuja on Wednesday, where the Coordinating Minister for Health and Social Welfare addressed journalists, Idris stated that subsidy removal had led to the reduction of fuel imports by 50 per cent.
During his inaugural speech on May 29, 2023, President Bola Tinubu declared that fuel subsidy was gone. Within 24 hours after that declaration, the Nigerian National Petroleum Company Limited, Nigeria’s sole importer of PMS, withdrew subsidy on petrol.
This led to a jump in the price of the commodity from about N198/litre to over N500/litre, as it later moved up to over N600/litre and currently sells for between N620/litre and N700/litre depending on the area of purchase.
“Petrol importation has been reduced by 50 per cent since the withdrawal of the fuel subsidy,” the information minister stated.
On February 18, 2023, about three months before PMS subsidy was removed by Tinubu, the Group Chief Executive Officer, NNPCL, Mele Kyari, revealed that Nigeria was consuming about 66 million litres of PMS daily. He also stated that over N400bn was spent monthly to subsidise PMS at the time, stressing that the subsidy was having adverse impacts on the cash flow of NNPCL.
Going by the latest position of the information minister that petrol importation has dropped by 50 per cent, it implies that the volume of imports into Nigeria has reduced by about 33 million litres daily, based on NNPCL’s figures in February.
This means that PMS importation has dropped by about 990 million litres in one month. Oil marketers told one of our correspondents that the ex-depot price of petrol, that is the cost of the commodity from NNPCL, was around N585/litre.
A reduction of 33 million litres means the country is currently saving about N19.3bn daily and N579.1bn monthly as a result of the removal of subsidy on PMS by the President. The revelation by the information minister might not be far from the truth because oil marketers have stated several times that the purchase of petrol has reduced drastically.
The National President, Natural Oil and Gas Suppliers Association of Nigeria, Bennet Korie, said, “The consumption of petrol has dropped to the lowest level ever. Filling stations are shutting down because there is no business anymore.
“The business is now very tough and marketers are struggling to survive. People don’t buy petrol again like before. So most filling stations are locking up because they cannot continue running at a loss.”
Korie also stated that the over 200 members of NOGASA could be forced to withdraw their services, because it was becoming increasingly difficult for oil marketers to fund their operations, a development that led to the shutdown of 70 per cent downstream oil sector businesses.
“Another issue is that of high bank interest rates. Today if you want to buy one truck of PMS, you will spend N30m. And if you go to a bank to get N30m at over 30 per cent interest rate, you know how much you will pay to the bank, all in the name of inflation.
“So if care is not taken, we will also withdraw our service because there is no way out. 70 per cent of oil traders are out of business, so it is better that the government looks into this issue before it gets out of hand. Many of them (operators) cannot talk but they come to us to complain,” he stated.