Nigeria has imported a total of about 23.5 billion litres of Premium Motor Spirit (PMS) also known as petrol in the past year alone, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) revealed.
Chief executive of the NMDPRA, Farouk Ahmed, who made this known, said the country’s average daily truck out over a period of eight years stood at over 55 million litres per day, with a peak of 66.7 million litres recorded for the year 2022.
Speaking at the ongoing 2023 PENGASSAN Energy and Labour Summit in Abuja on Tuesday, Ahmed who was represented by executive director, Corporate Services & Administration, NMDPRA, Bashir Sadiq, said the Nigerian government expended more than N4 trillion on PMS subsidy in 2022 alone, which amounted to about 20 per cent of Fiscal Budget for the year, and presented a strain on the fiscal viability of the government, and became a major obstacle to inclusive participation in downstream petroleum sector.
“Last year alone, Nigeria imported a total of about 23.5 billion Liters of PMS. Our average daily truck out over a period of 8 years stood at over 55 million litres per day, with a peak of 66.7 million liters recorded for the year 2022.
“The subsidy bill ballooned to over N400 billion monthly, making it unsustainable in the short to medium term. The subsidy regime also encouraged inefficiency, waste, and environmental pollution, hindering the country’s alignment with Sustainable Development Goals (SDGs) of providing cleaner energy.
According to him, the removal of fuel subsidies and migration to a full market-based pricing for petroleum products was a necessary step to attain a transparent mid and downstream value chain for petroleum products supply.
To address these challenges, the Nigerian government removed fuel subsidies and migrated to a full market-based pricing for petroleum products, which is the only way to attain a transparent mid and downstream value chain for petroleum products supply. The complete deregulation of the sector came into full effect on May 29, 2023, as part of the current administration’s bold commitment to implement much-needed reforms.
The removal of fuel subsidies will facilitate the development of healthy competitive markets and operational efficiency that will promote transparency, private sector investment in the downstream value chain of Nigeria’s oil and gas sector.
Ahmed also said that the NMDPRA is pivotal in the implementation of all relevant regulatory frameworks required for the sector, including the issuance of critical regulations, emplacement of new licence regimes, and enhanced monitoring regimes of technical, operational, and commercial activities.
According to the Authority chief executive, the Decade of Gas Programme and Auto-gas and domestic LPG programmes are also being implemented to deepen the utilisation of gas in a manner that supports the availability of cheaper and cleaner alternative energy sources for Nigerians. The NMDPRA shall continue to engage and collaborate with the unions in all relevant areas of mid and downstream growth, including policy research and capacity development.
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