$1.04 Billion Spent On Fuel Imports In 2021, Says CBN

Statistics from the Central Bank of Nigeria show that the amount of money used to bring petroleum products into Nigeria fell from $1.32 billion in 2020 to $1.04 billion last year.

Fuel importation continues to put pressure on our external reserves and the domestic currency as the country’s refineries sit idle and gulp millions of dollars in turnaround maintenance.

As a result of persistent pressure from fuel importations, the external reserve has dwindled in recent months, as it fell from $40.54 billion last year to $39.82 billion as of February 23, 2022.

According to data released by the CBN on sectoral utilisation for FX transactions, $45.76m was spent on petrol imports in January 2021, $64.67m in February, and $142.31m in March.

For fuel import transactions, forex fell to $77.96 million in April and $85.64 million in May, but increased to $86.42 million in June.

The report revealed further that the country spent $83.73 million in July and $103.70 million in August on petroleum product imports.

For the month of September, $66.66 million was spent on fuel imports; $74.01 million in October, $82.65 million in November, and $131.25 million in December.

The Bank’s Recommendations

• The apex bank recommended that the processes for starting the private refineries be sped up. Just last month, the Monetary Policy Committee emphasized the need to stimulate the start-up of private refineries around the nation in order to offer a competitive local supply source and decrease the need for the government to intervene in the setting of domestic PMS prices.

• The bank also recommended that the NNPC address the anomaly as witnessed in the continuous decline in oil income remittances despite rising crude oil prices.

• The bank believes that increased foreign exchange supply will assist the bank’s demand management strategy in the foreign exchange market and solidify macroeconomic performance, particularly those that encourage exports, decrease import reliance, and reduce foreign exchange demand pressure.

 

The NNPC View Point

While taking into cognizance the challenges faced, the Nigerian National Petroleum Corporation assured the nation of its unwavering commitment to zero queues and the maintenance of stability within the distribution of petroleum products.

The NNPC stated in its most recent monthly report that "the company has continued to assiduously monitor the daily stock of PMS in order to achieve seamless distribution of petroleum products and zero fuel queues across the nation."

According to the National Bureau of Statistics, the cost of premium motor spirit, also known as petrol, imported into Nigeria from January to September last year increased by 55.56 percent to N2.52 trillion, up from N1.62 trillion in the same period in 2020.

Fuel was the most expensive item imported into the country in the third quarter, accounting for 12.52 percent of total expenditure on imported goods, up from 11.26 percent in the previous quarter.

According to data from the NNPC, the NNPC spent a total of N1.16tn on petrol subsidies from January to November.

With the current geopolitical crisis between Russia and Ukraine pushing the price of crude oil above $98 a barrel, the highest in 8 years, there are fears that the retail price of PMS and other refined crude oil products may have to go up as a result of increasing costs.

Analysts expect the price to rise even beyond $100 for the London Brent before the end of tomorrow.