Nigeria’s petrol imports experienced a significant decline following the government’s decision to remove subsidies on Premium Motor Spirit (PMS) in May 2023. According to the latest report by the National Bureau of Statistics (NBS), the country’s petrol imports dropped by 3.58 billion litres in 2023 compared to the previous year, marking a 13.77% year-on-year decrease.
Decline in Petrol Imports
The NBS report highlights that Nigeria imported 20.30 billion litres of PMS in 2023, a sharp decline from the 23.54 billion litres imported in 2022. This reduction reflects the immediate effects of the subsidy removal on fuel importation. During the second half of 2023, the nation imported 8.36 billion litres of petrol, compared to 11.94 billion litres in the first half, resulting in a substantial 29.99% decrease over the period.
The reduction in fuel imports can be attributed to the growing cost of petrol, which was previously cushioned by government subsidies. With the removal of subsidies, prices for fuel have soared, leading to decreased consumption and, consequently, lower demand for imports. The report detailed monthly fluctuations, noting that the import volume ranged from 2.09 billion litres in January to a low of 1.09 billion litres in August.
Impact of Subsidy Removal
The removal of subsidies by President Bola Tinubu’s administration was aimed at addressing the mounting financial burden on the government and promoting economic reforms. The policy shift, however, has had immediate effects on the availability and affordability of petrol in the country. Fuel prices saw a significant increase, which in turn led to a decline in the importation of PMS. The drop in imports during the year’s second half represents a major shift from previous trends, underscoring the impact of the policy change on the energy sector.
The report noted a contrasting rise in the importation of Automotive Gas Oil (AGO), commonly known as diesel. AGO imports rose by 23.66%, from 4 billion litres in 2022 to 4.94 billion litres in 2023. The production of AGO domestically also increased by 6.76% during the same period, signaling a growing reliance on alternative fuels.
The NBS report further revealed an increase in the domestic production of other petroleum products, such as Household Kerosene, which grew by 56.02% in 2023 compared to the previous year. These trends point to a shift in Nigeria’s fuel consumption patterns as a result of policy changes and evolving market dynamics..
Fuel Consumption Trends in 2023
The report also provided detailed monthly breakdowns of petrol importation in 2023, showing fluctuations throughout the year. While January saw an importation of 2.09 billion litres, the figures gradually declined over the months, with significant drops in July (1.45 billion litres), August (1.09 billion litres), and September (1.21 billion litres). This sharp decline reflects the changing market realities after the subsidy removal.
By the end of the year, the total volume of petrol imports stood at 20.30 billion litres, marking a notable reduction when compared to 2022. This downward trend is expected to continue as consumers adjust to the new fuel pricing regime and seek alternatives to petrol.
