….Fuel import is a whopping 128% higher than recorded in 2020
Nigeria spent a total of N4.56 trillion on the importation of moto spirit (fuel) in 2021 about 128% higher than the N2 trillion spent on fuel importation in 2020.
This is according to foreign trade data recently published by the National Bureau of Statistics.
This is the highest amount spent on the importation of motor spirit since Nairametrics started tracking the data.
Nigeria spent a whopping N6.3 trillion on Fuels and Lubricants imports in 2021 dwarfing the N2.83 trillion, N2.5 trillion, and N3.8 trillion incurred in 2020, 2019, and 2018 respectively.
The country is currently experiencing one of the worst fuel crises in recent years and fuel queues remain sticky due to protracted clear out of adulterated fuel and the challenges with the importation of fuel. Diesel prices have also recently shot up to over N700 per litre.
Diesel (AGO)is also imported. and according to the data, importation of petroleum products other than the fuel cost N1.7 trillion which includes AGO. Nigeria’s NNPC reported in 2020 that it earned a revenue of N151.8 billion in from premium motor spirit import and another N39.9 billion in AGO.
Fuel prices averaged N166.40 and N170.42 in January and February 2022. However, this average is likely to rise due to the fuel shortages experienced in March 2022.
Several years of failed refineries mean Nigeria has to imports nearly all its motor spirits needs for a country that relies heavily on the petroleum by-product to power cars and electricity.
The Nigerian Government currently subsidizes fuel after failing at several attempts to take off a petrol subsidy.
Just recently, the former Senate President Bukola Saraki doubted claims by the federal government that Nigeria consumes about 70 million litres a day consumption, stating that Nigeria’s fuel consumption cannot be more than 35 million litres a day, and hinted that Nigeria could be subsidizing fuel for neighboring West African states.
The calls to stop fuel subsidies have increased in recent years,, especially by economic pundits and foreign investors citing the activity as a waste of our financial resources.
However, the government lacks the courage to confront the unions that have vehemently opposed the removal over the years.
According to the data, Crude oil exports topped N14.4 trillion at the end of 2021. At N4.56 trillion Nigeria’s spending on the motor spirit is slightly higher than the N4.5 trillion earned by the Federal Government between January and November 2021.
The N4.56 trillion spent on fuel subsidy is also the equivalent of about $10 billion in forex outflow suffered by the country.
Important to note that fuel importation is also via the NNPC’s Direct Sale of Crude Oil and Direct Purchase of Petroleum products policy of the NNPC.
The current government does not have any plans to remove fuel subsidies and will likely incur an even higher cost of importation this year.