Fuel Consumption Drops As Recession Worsens

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In an apparent reaction to the economic crunch being experienced in Nigeria, petrol consumption as well as vehicle importation has drastically dropped

This development can be seen from the figures released by the Nigerian National Petroleum Corporation, NNPC, and the National Automotive Council.

According to the state-owned oil company, importation of petrol into the country is done using a system called Offshore Processing Arrangements, OPA, and Direct Sales Direct Purchase, DSDP, and statistics show that the quantity of fuel imported in the month of September shrank to 427 million litres, more than half of the 901 million litres in August.

The report showed that 427 million litres was the lowest product import volume made by the NNPC since October 2015, given that the NNPC normally imports at levels close to 1 billion litres a month.

According to the report, the September analysis revealed Nigeria’s local refineries contributed 108 million litres of fuel to the daily needs of the country, a significant drop from the 220 million litres it contributed in August.

Recently, the NNPC has had to reduce its petroleum product importation due to the drop in product sales as well as increase in distribution costs.

The report showed that the NNPC remained the major importer of petroleum products in the country since the partial deregulation of the market, as imports by independent marketers has dropped no thanks to the scarcity of foreign exchange that is currently plaguing almost all critical sectors of the Nigerian economy.

The NNPC has said it has over 1.6 billion litres of fuel available, calling on Nigerians not to panic about fuel scarcity.

Similarly, the automobile market has seen the importation of cars into Nigeria, dip from 400, 000 during the period of economic boom, to between 250, 000 and 300, 000 vehicles per annum.

Director-General of the National Automotive Design and Development Council, NADDC, Aminu Jalal, said that the decline in the market size is as a result of the scarcity in foreign exchange for vehicle importation as well as the declining purchasing power of Nigerians due to economic recession.




    Jalal said that the volume of the vehicles comprised estimates of both new and used vehicles imported into the country during the recession.

    He noted however that the situation was not peculiar to Nigeria, saying that it was a natural phenomenon for the auto market to bubble when the economy of a nation is booming and decline during recession.

    He added that N13 billion has been disbursed as loans from the auto development fund, out of which N7 billion has been repaid.

    Jalal said further that applications for N8 billion loan were received and fresh loans would be given after the initial ones had been repaid by the beneficiaries.

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