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Thursday, 29 February 2024 06:50

Subsidy removal: Petrol import crashes by 990million litres monthly

The Minister of Information and National Orientation, Mohammed Idris, on Wednesday, said the importation of Premium Motor Spirit, popularly called petrol, into Nigeria has reduced by 50 per cent since the withdrawal of subsidy on the commodity.

During his inaugural speech on May 29, 2023, President Bola Tinubu declared that fuel subsidy was gone. Within 24 hours after that declaration, the Nigerian National Petroleum Company Limited, Nigeria’s sole importer of PMS, withdrew subsidy on petrol.

This led to a jump in the price of the commodity from about N198/litre to over N500/litre, as it later moved up to over N600/litre and currently sells for between N620/litre and N700/litre depending on the area of purchase.

Speaking at the third edition of the ministerial press briefing series in Abuja on Wednesday, where the Coordinating Minister for Health and Social Welfare addressed journalists, Idris stated that subsidy removal had led to the reduction of fuel imports by 50 per cent.

“Petrol importation has been reduced by 50 per cent since the withdrawal of the fuel subsidy,” the information minister stated.

He explained the continent lacked extensive traditional energy infrastructure, but stressed that this had presented an opportunity for leapfrogging in a more efficient way to renewable technology.

“Our aspiration in the area of energy security and energy transition will remain aspiration unless we have access to adequate funding resources that we control. With a lot of international banks withdrawing funding out of the oil and gas sector, the investment in the industry has become severely limited with the corresponding impact on exploration and production.

“Afreximbank has intervened in a big way, quickly becoming the largest financier of oil and gas deals in the continent. The support provided to the sector by the bank is in excess of $30bn. Nigeria has been one of the largest beneficiaries accounting for almost 60 per cent of the total funding of the sector.

“And it’s important to the point that afreximbank has been able to make those modest contributions in the oil and gas sector because the bank is predominantly African in ownership and control,” he stated.

Oramah disclosed that Afreximbank would be managing the proposed Africa Energy Bank to ensure its best chance of success.

“The strategic goal of the Africa Energy Bank is to play a leadership role in shaping the energy landscape in Africa through strategic partnership with proven African and international financial institutions and investors and also to provide sustainable financing in this area of the oil and gas sector.

“The Africa energy bank will need considerable support to get off the ground. We will need support from member states to achieve the level of capitalization that is adequate to support the energy sector,” he stated.

NNPCL partners OPEC

Also on Wednesday, NNPCL and the Organisation of the Oil Exporting Countries pledged to work together to achieve the Nigeria’s aspirations to attract investments and grow production.

The two organisations came to this accord when the Secretary-General of OPEC, Haitham al-Ghais, paid a courtesy visit to the Group Chief Executive Officer, NNPCL, Mele Kyari, at the NNPC Towers in Abuja.

Speaking at the event, al-Ghais stated that OPEC was completely aligned with NNPCL’s vision as captured in its payoff line: “Energy for Today, Energy for Tomorrow”.

This, he said, was because of the oil firm’s inclusive view of energy as opposed to the view being pushed in some quarters that some sources of energy were bad.

He disclosed that in spite of the pushback on oil and gas, the world would require about $14tn investments from now till 2035 to be able to meet global demand, and urged NNPCL to do everything to tap into that opportunity to raise its production.

“We will continue to ensure that the market is stable. The global market has to be stable in order for Nigeria to be able to attract investors. If there’s volatility, if there’s no stability in the market, it will only create havoc for everybody, whether it’s a producer or consumer country.

“So, we will continue to do that in OPEC. We count on Nigeria’s support,” the OPEC helmsman stated.

In his remarks, Kyari said NNPCL was working very hard to recover lost production and provide the right fiscal environment to attract investments.

He expressed appreciation to OPEC for its support to Nigeria, adding that NNPCL would continue to support the organisation in whatever way it could.

Nigeria reaping

Meanwhile, at the briefing series by the information minister, which was initiated to provide a platform for public officials to reel out their achievements and apprise Nigerians of the challenges of governance, Idris said Nigeria had begun to reap the benefits of the reforms being spearheaded by President Tinubu.

He said  that the Nigeria’s gross domestic product grew by 3.46 per cent in the fourth quarter of 2023, as against 2.54 per cent recorded in the third quarter of 2023.

 He also said capital importation rose to 66 per cent in the fourth quarter of 2023, reversing a 36 per cent decline in the third quarter.

“The Nigerian Stock Exchange All Share Index crossed the 100,000 mark – its highest ever, mainly due to the pragmatic reforms initiated by the President, which inspired investor confidence in the Nigerian economy.

“It is also encouraging to state that oil production has risen from 1.22 million barrels per day in the second quarter of 2023 to 1.55 million barrels per day in the fourth quarter of 2023.”

President Bola Tinubu announced the removal of petrol subsidy during his inaugural address on May 29, 2023, saying, “Subsidy is gone.”

Idris notes that President Tinubu has also given a directive for the design of a Social Security Unemployment Programme to cater for the unemployed graduates.

“This is in addition to setting up of a Social Consumer Credit Scheme to boost the purchasing power of Nigerians, as they make adjustments in view of the temporary economic hardship.

“As the government rejigs the National Social Investment Programme, the direct payments of N25,000 to 15 million households will resume immediately.

“The government is equally tackling insecurity headlong and more success stories are coming in on daily basis. Without any doubt, we are winning the war against insecurity,” he said.


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