Nigeria spends $1.04b on fuel imports in 12 months
By Jeph Ajobaju, Chief Copy Editor
Refined fuel imports cost $1.04 billion in 2021 down from $1.32 billion in 2020, says Central Bank of Nigeria (CBN) data. Even the $28 million difference is a big waste in a country with four refineries.
Muhammadu Buhari as both President and Oil Minister squandered N100 billion on rehabilitating the four refineries in 2021 without any of them producing a single litre of refined oil. They are simply conduits for cronies to drain the treasury.
This has gone on for years, before he won Aso Rock, but escalated since he became President and planted Northerners in all the key posts in the Nigerian National Petroleum Company (NNPC), even as crude oil is domiciled in the South.
Successive federal administrations refuse to do the best thing, which is privatising the refineries, because they provide avenues for turn around maintenance (TAM) contracts in inflated sums shared by Abuja officials.
Importation of fuel consumes huge external reserves which dropped to $39.77 billion on 15 February 2022 from $40.54 billion in December 2021.
__________________________________________________________________
Related articles:
Refineries’ rehab costs N100b without producing a litre of oil
Nigeria spends $26.5 billion on refinery TAM that can build three new ones
Abuja plans 18 refineries in oil states
Fuel subsidy costs N3tr, and may increase debt, says Ahmed
__________________________________________________________________
Monthly spending
CBN data, first reported by The PUNCH, shows the following monthly figures for fuel imports in 2021:
- January – $45.76 million
- February – $64.67 million
- March – $142.31 million
- April – $77.96 million
- May – $85.64 million
- June – $86.42 million
- July – $83.73 million
- August – $103.70 million
- September – $66.66 million
- October – $74.01 million
- November – $82.65 million
- December – $131.25 million
CBN pitches private refineries
CBN Monetary Policy Committee (MPC) canvassed in January 2022 the need to encourage private refineries to provide competitive local supply sources and reduce government intervention in fuel prices.
“Members noted the dwindling proceeds from oil sale, despite rising crude oil prices. They further noted the need to address the persistent reduction in remittance of oil revenue to the Consolidated Revenue Fund and urged the NNPC to urgently address this anomaly,” the MPC said.
“The improved foreign exchange supply will thus support the bank’s demand management strategy in the foreign exchange market and consolidate macroeconomic performance, especially those that promote export, reduce dependence on import and reduce foreign exchange demand pressure.”
NNPC as sole importer of fuel
The NNPC is the major supplier of petroleum products and has been the sole importer for more than four years after private marketers stopped importation for lack of forex.
“The corporation has continued to diligently monitor the daily stock of PMS [Premium Motor Spirit, also known as petrol] to achieve smooth distribution of petroleum products and zero fuel queue across the nation,” the NNPC said in its latest monthly report.
The cost of petrol imported between January and September 2021 (9M 2021) rose 55.56 per cent to N2.52 trillion from N1.62 trillion in 9M 2020, according to the National Bureau of Statistics (NBS).
NBS data shows that petrol topped the list of imports in the third quarter (Q3 2021), accounting for 12.52 per cent of total import bill, up from 11.26 per cent in Q2.
NNPC figures show it spent N1.16 trillion on subsidy from January to November.
Subsidy, which the NNPC calls “value shortfall” or “under-recovery”, resurfaced in January 2022 as Abuja left pump price at between N162 and N165 per litre despite increase in international oil prices.
The government in March 2020 removed some subsidy after reducing pump price to N125 per litre from N145 following the crash in oil prices.