Nigeria’s petrol importation significantly decreased in the second half of 2023 following President Bola Tinubu’s removal of fuel subsidies in May 2023.
According to the National Bureau of Statistics (NBS), petrol imports dropped by 3.58 billion liters in the second half of 2023, reflecting a 29.99 per cent reduction from the first half of 2024.
For the full year of 2023, Nigeria imported 20.30 billion liters of Premium Motor Spirit (PMS), down from 23.54 billion liters in 2022—a year-on-year reduction of 13.77 per cent.
The subsidy removal led to a sharp rise in fuel prices, with some stations selling PMS at over N700 per liter. Despite the government’s claims that the policy would free up funds for vital sectors like healthcare and education, many Nigerians have been burdened by the higher living costs.
Energy experts are divided on the long-term benefits of the policy.
Olumide Bakare, an energy economist at Lagos Energy Forum, points out that the decrease in imports is a positive sign of reduced fuel consumption and lower fiscal strain.
“The removal of subsidies will help Nigeria gradually reduce its dependence on petrol imports and could incentivize local refining,” Bakare notes. However, he warns that the gains could be short-lived unless Nigeria addresses its refining capacity issues.
Others express concern over the ongoing financial strain on the Nigerian National Petroleum Company (NNPC), which reportedly continues to request government support for fuel imports despite the subsidy removal.
“The transparency of the subsidy policy is questionable. If NNPC is still incurring import costs, then we are not fully free of the subsidy burden,” says Bola Adegoke, an oil and gas analyst.
While the government maintains that the subsidy removal was necessary to redirect funds to critical infrastructure, questions linger over the effectiveness of the policy’s implementation, with rising costs continuing to weigh heavily on the population.
According to the 2023 full-year foreign trade data, Nigeria’s fuel import costs decreased by approximately 2.6 per cent, from N7.7 trillion in 2022 to N7.5 trillion in 2023.
In terms of semi-annual comparison, the country incurred N3.5 trillion in fuel importation costs in the second half of 2023, representing a 10.26 per cent decrease compared to the N3.9 trillion recorded in the first half of the year.
Also, in the first six months of 2024, the country’s petrol import bill stood at N5.8 trillion. When compared to the same period of 2023, the country’s petrol import bill increased by 87.09 per cent from N3.1 trillion.
The significant increase in petrol imports can be attributed to high crude oil prices coupled with a weakened naira.
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