Petrol Consumption Drops, In a recent announcement, the Federal Government of Nigeria revealed that the country consumed a total of 11.26 billion litres of Premium Motor Spirit (petrol) in the first half of 2023. However, after the removal of petrol subsidies in June, there was an average daily reduction of approximately 18.5 million litres.
Data obtained from the Nigerian Midstream and Downstream Petrol Consumption Drops which the Petroleum Regulatory Authority (NMDPRA) highlighted the consumption patterns before and after the subsidy removal. Between January 1 and May 28, 2023, during the pre-deregulation period, Nigeria consumed about 9.9 billion litres of petrol. This translates to an average daily consumption of 66.9 million litres over the 148-day period when the subsidy was still in effect.
During the post-deregulation period from June 1 to June 28, 2023, the country consumed a total of 1.36 billion litres of petrol, with an average daily consumption of 48.43 million litres. A detailed analysis of the data indicates that the average monthly consumption during the pre-deregulation and post-deregulation periods differed by around 18.5 million litres. This implies that the daily petrol consumption in Nigeria decreased by approximately 18.5 million litres after the subsidy was removed.
While the average daily consumption dropped, it is worth noting that there were days when petrol consumption surpassed 100 million litres, while on other days it fell below 10 million litres. For example, specific dates highlighted in the NMDPRA report, such as March 8, April 20, and May 16, recorded petrol consumption figures of 103.6 million litres, 105.02 million litres, and 101.9 million litres, respectively, during the pre-deregulation period. However, during the 28-day post-deregulation period covered in the report, the highest consumption figure recorded was 78.84 million litres on June 20, while the lowest figure was 470,000 litres consumed nationwide on June 11.
The President of the Nigeria Association for Energy Economics (NAEE), Prof. Yinka Omorogbe, expressed support for the removal of fuel subsidies, citing the numerous negative practices associated with the subsidy regime. The Nigerian National Petroleum Company Limited and oil marketers had previously raised concerns about petrol smuggling to neighboring nations during the subsidized period. Despite the harsh impact, Omorogbe emphasized that eliminating fuel subsidies was the right step forward.
As the debate surrounding petrol subsidies continues, these consumption figures serve as evidence of the changes in petrol usage patterns following the removal of subsidies. The Federal Government aims to navigate these changes to ensure an efficient and sustainable petroleum sector in Nigeria.
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