Nigeria’s daily petrol consumption has increased to 50 million litres, up from 46.38 million litres in July 2023, two months after the removal of subsidies by the current administration. The rise in consumption amid ongoing fuel scarcity has been linked to a resurgence of smuggling activities, which is reportedly driven by subsidy payments.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority’s (NMDPRA) Head of Public Affairs, Mr. George Ita, confirmed the new figure.
While dismissing speculation that daily fuel consumption had reached 60 to 65 million litres, Ita clarified, “Now, I can confirm to you that our daily consumption hasn’t surged up to anywhere near these (60 million to 65 million litres) levels. Average consumption is 50 million litres daily.”
However, Ita declined to address concerns about the resurgence of petrol smuggling to neighbouring African countries, stating that such issues fall under the jurisdiction of border security agencies.
Previously, in July, the NMDPRA reported that Nigeria’s daily petrol consumption was 46.38 million litres due to the removal of subsidies. NMDPRA Chief Executive Mr. Ahmed Farouk had noted a 35% reduction in daily consumption compared to the 65 million litres per day recorded before the subsidy was removed.
“The current daily consumption has drastically reduced as against 65 million litres, which was the daily consumption before subsidy removal. In January, it was 62 million per litre; February, 62 million per litre; March, 71.4 million per litre; April, 67.7 million per litre; May, 66.6 million per litre; June, 49.5 million per litre, and July, 46.3 million per litres,” Farouk had explained at the time.
Currently, the official petrol price stands at N897 per litre, following a recent increase by the Nigerian National Petroleum Company (NNPC) Limited. However, many stations are selling petrol between N930 and N950 per litre, with some locations charging between N1,000 and N1,400 per litre.
NNPC has stated that the current petrol price does not yet reflect the actual market price, which will continue to adjust to align with international pricing, potentially leading to further price hikes.
Experts and industry analysts, including Chief Executive Officer of Swift Oil Limited, Stillian Mitakev, have attributed the ongoing petrol scarcity and return of smuggling to the reintroduction of subsidies and the NNPC’s dominance as the sole importer of petrol. Mitakev emphasized that deregulating petrol pricing and allowing market forces to determine the price is the only solution.
“The only way Dangote Refinery can ease the petrol supply challenge is if the government deregulates the price because Dangote has not set their price now. If they do it on market price, their price should be about N1,500 to N1,600 per litre. Anywhere in the world, petrol is between 90 cents and $1. How much is $1? It’s N1,600,” Stillian said.
Mitakev further explained that NNPC’s ability to source foreign exchange at the official market rate, combined with its crude sale proceeds, gives it a significant advantage over marketers, who must purchase dollars from the parallel market at higher rates. Consequently, this disparity has caused marketers to withdraw from importing Premium Motor Spirit (PMS), as they cannot compete with NNPC’s pricing.
“Parallel market is N1,600/$; N1,620/$ or thereabout. Whereas the official rate is N1,580/$, but you cannot compare it with what NNPC is calculating to set their pump price. And NNPC calculates its price at N650/$ because of its crude sale proceeds. No marketer has that advantage,” Stillian explained.
Despite hopes that the Dangote Refinery, with its 650,000 barrels per day capacity, would alleviate Nigeria’s fuel supply issues, Mitakev argued that such relief would only come if the government fully deregulated petrol pricing.
