Nigeria spent N2.39trn on fuel
NIGERIA SPENT A TOTAL of N2.39 trillion on the importation of 17 billion litres of petroleum products in the first three quarters of 2018, according to data released by the country’s statistics bureau, National Bureau of Statistics (NBS)
NIGERIA SPENT A TOTAL of N2.39 trillion on the importation of 17 billion litres of petroleum products in the first three quarters of 2018, according to data released by the country’s statistics bureau, National Bureau of Statistics (NBS) obtained by business a.m.
An analysis carried out by business a.m. revealed that funds spent on the importation of petroleum products in the period under review increased for the second time in a row, by 13 percent, in comparison with the first three quarters of 2017 which stood at N2.09 trillion.
A further breakdown of the figures showed that out of a total figure of N792 billion spent on petroleum products in Q1, N225 billion was spent on petrol alone, the highest recorded in the period under review, while in Q2 and Q3, a total of N663 billion on petroleum products was spent, but N189 billion went to purchasing petrol and lastly, N934 billion in Q3, with N191 billion were spent on petrol.
The petroleum products listed by the NBS included petrol, gas oil, lubricating oil and kerosene.
Despite being Africa’s largest crude oil producer, with more than 1.7 million barrels of crude oil per day be- ing pumped out, the country is still plagued with supply shortages and a continuous import cycle of 92 percent of its total daily consumption, which is estimated at 53 million litres per day.
It is the only major oil exporting country that imports the largest volume of petrol in the world because of its low domestic refining capacity, which is less than 400,000 barrels per day.
Ibe Kachikwu, Minister of State for Petroleum Resources said that the foreign exchange requirement for importation of petroleum products alone is estimated at $28 billion (N3.35 trillion) annually, with 40 percent of the total amount (N1.34 trillion) dedicated to financing the logistics of importation.
On the issue of subsidies which is almost synonymous with cost of petroleum products in Nigeria, it is estimated that the country has also incurred subsidies cost for petrol and kerosene, estimated at $65 billion between 2011 and 2015.
“The issue of cost of petroleum products cannot be discussed in Nigeria without subsidies because in this country, they go hand to hand,” Israel Bamidele, an energy lawyer amused, in phone conversation with business a.m.
“The subsidy payment over the past years could have financed the entire investment required to enhance the national refinwas ing capacity to 50 per cent of crude oil produced in Nigeria, while stimulating employment and economic growth across the nation and attaining optimum value to the crude oil produced domestically,” Bamidele said.
Importation of refined petroleum products continues to be a problem and a very hard nut to crack despite various attempts made by the federal government.
However, there seems to be hope on the horizon as indigenous oil players has ventured in building modular refineries, from the Azikel refinery to Waltersmith Petroman modular refineries. The federal government has issued over 25 licenses to private investors and these upcoming modular refineries are expected to add over 500,000 barrels per day refining capacity.
Also, there is the 650,000 Dangote refinery which has both domestic and international onlookers anxiously waiting for its completion, which is projected for early 2020. The country is looking forward to being free from the burden of importation of refined petroleum products in the coming years.