Despite Scarcity, Nigeria’s Daily Petrol Consumption Surges to 50m Litres Amid Smuggling Concerns

Peter Uzoho

The average volume of petrol consumed in Nigeria has risen to 50 million litres per day, up from about 46.38 million litres in July 2023, two months after subsidy was removed by the current administration.

The surge in petrol consumption despite the ravaging scarcity of the product at the filling stations in Nigeria has been attributed to the return of smuggling activities fuelled by subsidy payment.

Head of Public Affairs, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. George Ita, disclosed the new consumption figure in a response to THISDAY’s inquiry.

Ita stated this while dispelling speculations that daily fuel consumption in the country had hit 60 million litres to 65 million litres.

“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,” Ita said.

He, however, sidestepped the question on the return of smuggling of petrol to other neighbouring African countries, arguing that only the security agencies that man Nigeria’s international border points had the power to address such issue.

In July last year, NMDPRA had announced that the country’s petrol daily consumption figure stood at 46.38 million litres, due to subsidy removal by the federal government.

The Chief Executive of NMDPRA, Mr. Ahmed Farouk, who disclosed this at the time, said that the figure represented a 35 per cent reduction when compared with the 65 million litres per day, prior to subsidy removal.

According to him, an average truck out on a daily basis for petrol consumption, after announcing subsidy removal on May 29, reduced to 46.38 million litres.

 “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,” Ahmed said then.

Officially, petrol price is now N897 per litre, following the recent price increase by the Nigerian National Petroleum Company Limited (NNPC) but many filling stations in the country are selling between N930 to N950 while in some locations, the pump price hovers between N1000 and N1400 per litre.

NNPC had also stated that the current petrol pump price is not yet the actual market price, noting that the price will keep adjusting until it reflects the international price of the commodity, meaning that more price increases could take place any time soon.

However, petroleum products marketers and analysts have argued that part of the reasons for the current scarcity of petrol in Nigeria and the return of smuggling to neighbouring African countries was because of the reappearance of subsidy and the re-emergence of the NNPC as the sole importer of petrol.

Chief Executive Officer of Swift Oil Limited, Stillian Mitakev, told THISDAY, exclusively that the only solution to the scarcity and smuggling is for the government to deregulate petrol pricing and allow the market to determine the pump price.

With the current situation where NNPC enjoys the sole importer status and with all the advantages accrued to it, Mitakev said marketers cannot compete with the national oil company.

According to him, only NNPC gets foreign exchange (FX) at the official market rate and also uses its crude sale proceeds to buy dollars at a very discounted rate, whereas marketers were left with the option of sourcing dollars at the parallel market.

He said that no marketer will buy dollars at the parallel market rate, import petrol and sell the product below its landing cost, noting that that is the reason marketers pulled out from importing Premium Motor Spirit (PMS).

“Parallel market is N1,600/$; N1,620/$ or thereabout. Whereas 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 said.

Despite the hopes that the Dangote Refinery will ease petrol shortages in Nigeria, the marketer argued that the only way the 650,000 barrels per day facility could achieve that is when the market is deregulated.

He added: “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.”