The average daily petrol consumption by Nigerians fell by 28 per cent since President Bola Tinubu scrapped the country’s costly subsidy on fuel on May 29, data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has shown.
According to the industry regulator, average daily petrol consumption slumped to 48.43 million litres in June, down from the previous average of 66.9 million litres, Reuters reported, quoting figures released by NMDPRA.
Nigeria still does not know her actual daily petrol consumption, but relies on loading and truck-out data from depots to the states nationwide, rather than the actual volume dispensed by filling stations to customers daily.
Also, a quick check on the June daily loading information from the NMDPRA showed that the 28 per cent reported reduction in consumption may not have told the full story of Nigeria’s current petrol use.
The initial shock of the subsidy withdrawal announcement and the three-day holidays in June may have affected consumption substantially.
Last month, Nigeria observed the annual June 12 Democracy Day as well as a two-day Muslim festival holiday. There is usually only skeletal loading by oil marketers during those days.
The country’s actual consumption figure remains a subject of controversy. In September last year, the NMDPRA said Nigeria consumed 66.8 million litres of petrol daily, while the state-owned oil company, the Nigerian National Petroleum Company Limited (NNPC), insisted that the country utilised 68 million litres of petrol daily.
On its part, the Nigeria Customs Service (NCS) however said the NNPC released 98 million litres daily even when it previously claimed the country consumed 60 million litres of petrol daily.
The subsidy had kept prices cheap for decades in Africa’s biggest economy, Reuters reported.
But it had become increasingly expensive for the country. The government spent $10 billion last year – leading to wider deficits and driving up government debt.
Since the subsidy was removed, a black market in neighbouring Cameroon, Benin, and Togo that relied on petrol smuggled from Nigeria has been reported to have collapsed.
Despite having spent $2.41 billion on the subsidy in the first five months, Nigeria could save up to $5.10 billion this year from scrapping the petrol subsidy and from FX reforms, the World Bank said on June 27.
But the varying figures provided by different agencies of government have left many Nigerians concerned about the transparency of the management of the government’s expensive fuel subsidy programme before its removal in May.
Last month, the Nigeria Extractive Industries and Transparency Initiative (NEITI) vowed to seize the gauntlet and carry out a comprehensive nationwide study of the actual volume of petrol consumed by the country.
Meanwhile, oil prices climbed about three per cent to a nine-week high at the weekend, as supply concerns and technical buying outweighed fears that further interest rate hikes could slow economic growth and reduce demand for oil.
Brent futures, Nigeria’s benchmark rose $1.95, or 2.6 per cent, to settle at $78.47 a barrel, while US West Texas Intermediate crude (WTI) rose $2.06, or 2.9 per cent, to settle at $73.86.
That was the highest close for Brent since May 1 and WTI since May 24. Both benchmarks ended up about 5 per cent for the entire week.
After two months of price consolidation between roughly $73-$77, data showed that Brent moved into technically overbought territory for the first time since mid-April.
But THISDAY reported last week that the rise in the international price of crude oil could also mean an increase in the pump price of petrol which currently sells for between N488 and N600 across the nation, depending on location.
Emmanuel Addeh in Abuja
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