THE Group Managing Director, Nigerian National Petroleum Company Limited, (NNPCL), Mele Kyari, has said the drop in Nigeria’s Premium Motor Spirit (PMS) consumption by 30 per cent was a result of removal of petrol subsidy by the current administration.
Kyari, who gave the information, at a joint press conference with the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, in Abuja on Friday, September 1, said fuel subsidy removal had unmasked Nigeria’s real consumption figures.
He explained that the drop in fuel demand from 66.7 million litres daily before to about 46 million currently also meant a 30 per cent reduction in NNPCL’s demand for foreign exchange to import fuel.
“Oil production ramped up to 1.6 million barrels by Wednesday, August 30, from a very poor position of less than 1 million a few months ago,” he said.
PMS subsidy had kept prices cheap for decades in Africa’s biggest economy but it became increasingly expensive for the country – the government spent $10 billion last year – leading to wider deficits and driving up government debt.
Since the subsidy was ended, a black market in neighbouring Cameroon, Benin and Togo that relied on petrol smuggled from Nigeria has collapsed.
Despite having spent $2.41 billion on the subsidy in the first five months, Nigeria could save up to $5.10 billion this year from scrapping the petrol subsidy and from FX reforms, the World Bank said on June 27.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.