Nigeria has seen a significant drop in petrol imports following the removal of the fuel subsidy by President Bola Tinubu’s administration in May 2023. The move, which was part of broader economic reforms, has led to a 3.58 billion litre reduction in petrol imports in the second half of 2023 compared to the first half of the year.
According to the National Bureau of Statistics (NBS), the country imported 8.36 billion litres of Premium Motor Spirit (PMS) in the second half of 2023. This represents a sharp decrease from the 11.94 billion litres imported in the first half of the year, a reduction of 29.99%.
The drop in imports is even more noticeable when compared to the same period in 2022. In the second half of 2022, Nigeria imported 11.98 billion litres of petrol. This marks a 30.22% decline in 2023, a reduction of 3.62 billion litres.
Overall, for the year 2023, Nigeria imported 20.30 billion litres of petrol, down from the 23.54 billion litres imported in 2022. This reflects a year-on-year decline of approximately 13.77%. The significant decrease underscores the impact of the government’s decision to remove the fuel subsidy.
The decision to remove the fuel subsidy was announced by President Bola Tinubu during his inauguration speech on May 29, 2023. He declared that the government could no longer afford to continue subsidizing petrol, a move that had long been debated by economists and policymakers.
Almost immediately after the announcement, petrol prices across Nigeria surged. In some areas, petrol was being sold for as much as N700 per litre, a huge increase that sent shockwaves through the country. This sudden spike in fuel prices had a ripple effect on other goods and services, pushing the cost of living even higher for millions of Nigerians.
The removal of the subsidy was positioned as necessary to free up resources for critical sectors like healthcare, education, and infrastructure. However, the swift rise in fuel prices left many Nigerians struggling to cope with the higher cost of transportation and basic necessities.
The removal of the subsidy had a direct impact on the country’s fuel import bill. In 2023, Nigeria’s fuel import costs fell slightly by 2.6%, from N7.7 trillion in 2022 to N7.5 trillion. This indicates that, while the volume of petrol imports dropped, the overall cost remained high due to global crude oil prices and the depreciation of the naira.
In the second half of 2023, Nigeria’s fuel import bill stood at N3.5 trillion, a 10.26% reduction from the N3.9 trillion recorded in the first half of the year. This decline reflects the lower volume of imports following the subsidy removal.
However, the impact of global oil prices became evident in early 2024. In the first six months of 2024, Nigeria’s petrol import bill reached N5.8 trillion. This was an 87.09% increase compared to the N3.1 trillion spent in the same period in 2023. The increase was driven by a combination of higher crude oil prices and the weakening of the naira, making it more expensive for the country to import fuel.
