Daily fuel consumption jumps to 72 million litres, subsidy hits N541.66bn


Petrol consumption in the country jumped from 55.59 million litres a day in April to 72.07 million litres per day in the month of May.

This shows that in the month of May, petrol consumption in the country was 16.48 million higher than the consumption in the month of April.

This also means that within the period, the country’s daily consumption of petrol by 29.65 per cent between April and May.

Data obtained the Nigerian National Petroleum Corporation monthly report showed for the first five months of the year, the corporation supplied a total 8.76 billion litres for local consumption.

The Federal Accounts Allocation Committee report also showed that the country pumped N541.66bn into petrol subsidy in the first in six months of the year.

The NNPC supplied a total of 8.76 billion litres in the first five months of the year.

Petrol supplies hit a high of 72.3 million litres per day in May. According to the NNPC 2.241 billion litres (72.3 million litres per day) of white products were sold in the month of May 2021. In April, 1.673 billion litres was sold (55.77 million litres per day).

This means that from April to May 2021, petrol consumption jumped by 568 million. In March, the NNPC said 1.75 billion litres (56.45 million litres per day) of Premium Motor Spirit was consumed.

In February it said consumption was 1.41 billion litres (50.36 million litres per day). In January 2021, 1.68 billion litres (54.27 million litres per day) of PMS were supplied.

According to the NNPC, total revenues generated from the sales of PMS between May 2020 and May 2021 is N2.34tn. The corporation added that total sales of petroleum products for the period May 2020 to May 2021 was 18.651billion litres, with PMS accounting for 99.69 per cent of total volume.

Before Major General Muhammadu Buhari (retd), became president Nigeria’s petrol consumption was estimated at between 35 million to 40 million litres daily.

In a February 8, 2018 statement, the NNPC said the country’s daily petrol consumption was around 35 million litres.

The rise in the quantity of fuel consumed in the country has also meant an increase in what NNPC calls under-recovery – a euphemism of petrol subsidy.

According to the NNPC books, subsidy was not recorded in January. In February, the NNPC paid N25.37bn as subsidy. In March, it paid N 60.39bn. In April, it paid N61.97bn as subsidy. In May, it paid N126.29bn as subsidy. In June subsidy rose to N164.34bn. In July, subsidy paid by the corporation amounted to N103.29bn. The corporation paid N541.66bn as subsidy in the six months under review.

Group Managing Director of the NNPC, Mr Mele Kyari, had recently blamed the rising figures in fuel consumption in the country on smuggling of products to neighbouring countries.

The Chief Executive Officer and Executive Secretary, Major Oil Marketers Association of Nigeria, Mr Clement Isong, said several reasons could be responsible for the increase in petrol consumption in the country.

“The number that you have is not sales in the stations; it is load-out from the jetties – that is what they track. So, the first reason and the most obvious and saddest reason is that not all the products may go to stations; some may be smuggled out of the country,” he said.

He attributed the cause of petrol smuggling to the policy that made petrol pump prices ‘significantly lower than those’ in neighbouring countries.

“It is not unusual for it to happen, and the solution is proper pricing of the product. I don’t think our consumption is as high as 70 million litres per day,” he added.

The National Operations Coordinator, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, said the collaboration between the NNPC and the Economic and Financial Crimes Commission might have brought about a reduction in petrol smuggling.

“Smuggling is responsible for the increased in petrol consumption; we are the one serving neighbouring countries, but because of control measures put in place, smuggling may have gone down.”

During a presentation at an interactive session by the Joint Senate Committee on the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper, Kyari, said that with a price difference of over N100 per litre between what is sold in Nigeria and in countries around the nation, it was difficult to cage the activities of petrol smugglers.

He added even though the corporation was working in conjunction with other agencies to combat the menace and was making noticeable progress, the battle was yet to be won.

Kyari had said “As long as there is arbitrage between the price that you sell and what is obtainable elsewhere, you can be sure that it is very difficult to contain the situation.”

He stressed that the activities of smugglers were also making it difficult for the country to determine the actual consumption figures for petrol, noting that the corporation could only know what was trucked out from loading depots across the country but could not determine how much of that was consumed in-country.

In June, the NNPC said it was collaborating with the Economic and Financial Crimes Commission, Department of State Services, Nigeria Police Force, Nigeria Customs Service, Nigeria Security and Civil Defence Corps and other relevant downstream and upstream stakeholders in the petroleum industry to curb the twin menace of petroleum products smuggling and crude oil theft.

Speaking at a stakeholders’ meeting at the NNPC Towers, Abuja, Kyari stated that with increasing consumption rates, the country couldn’t continue to bear the burden of the challenge.

He said, “We all agree that smuggling is not a business that should be condoned because even for deregulated petroleum products, it brings extra cost burden on this country both in terms of safety and security of supply and in securing of foreign exchange.

“It even constitutes more burden to this country when the product involved is a regulated product like Premium Motor Spirit.”

“We all know that our daily consumption is not up to 60 million litres. We all know that, and that is why we have to pull it down. We will pull it down by every means necessary.”

A financial expert and a professor of economics at the Olabisi Onabanjo University, Ogun State, Sheriffdeen Tella, said that the increase in consumption might be due to increased smuggling across the borders as the figures were outrageous.

He said, “The trend may be an indication of continuous increase in smuggling in the country.”

He stated that the best approach to tackling the menace was to ensure that officials of the Nigerian Customs Services performed their jobs effectively at the borders.

He also campaigned for the digitalisation of the clearance processes at the ports to address smuggling.

Tella said, “The best way to tackle smuggling is not by increasing the price of petrol to worsen things for the average Nigerian but to make sure that custom officers at the border are working effectively.

“There is also an urgent need to digitise checking processes at the ports.

“This is the duty of the NCS by now. By digitalising the systems all items being conveyed out of the country would be scanned and nothing will pass the security agents as it does now that we only have a manual process in place.”

He also said that the NNPC should implement the Advanced Cargo Declaration in line with global best practices to tackle the issue of crude oil theft in the country. (Punch)

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