Nigeria Spends $28bn Annually to Import Petrol

• Nigeria Spends $28bn Annually to Import Petrol

Nigeria allocates an average of $28 billion of her foreign exchange earnings yearly to import about 92 per cent of the petrol consumed locally, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said.

Kachikwu stated recently at the 2017 conference of the Modular Refineries Association of Nigeria (MRAN) in Abuja, that on the average, the country consumes 66 million litres of petrol daily.

He also noted that 40 per cent of the $28 billion import spends was used to finance its logistics.

“The state has been plagued with supply shortages and a continuous import cycle of 92 per cent of its total national daily consumption, which is estimated at 66 million litres per day. The foreign exchange requirement for importation of petroleum products is estimated at $28 billion (N3.35 trillion) annually, with 40 per cent of the total amount (N1.34 trillion) dedicated to financing the logistics of importation,” Kachikwu said.

He also stated that over the past four years, Nigeria had spent billions of monies on subsidy for petrol and kerosene, adding however that all it spent could have financed a lot of investments for her downstream infrastructure.

“The country had also incurred subsidies cost for petrol and kerosene, estimated at $65 billion between 2011 and 2015. In addition to this, we lost an estimated $6 billion from the vandalism of oil and gas infrastructure. These issues have primarily been fueled by regional indigenes who perceived neglect of their socio economic and environmental development.

The subsidy bill over the past years could have financed the entire investment required to realise the Vision 20:2020 target of enhancing the national refining capacity to 50 per cent of crude oil produced in Nigeria; stimulated employment and economic growth across the nation; stem continuous leakage of national resources; attain optimum value (and margin) to the crude oil produced domestically; ensure significant reduction in the federation foreign exchange expenditure for importation of petroleum products; and create economic activities in the Niger Delta region,” Kachikwu who was represented by a Deputy Director in the department of Engineering and Standards of the Department of Petroleum Resources (DPR), Mr. Olumide Adeleke explained.

He added that through the government plans for the country’s oil and gas industry, it would create a robust domestic refining sector that could reduce petroleum products imports and attain 50 per cent of domestic refining capacity by the fourth quarter (Q4) of 2018, and 100 per cent by Q4 2019 with a projection of exporting excess capacity.