Subsidy removal: Nigeria’s petrol daily consumption figure reduces by 35%

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The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has revealed that the country’s daily petrol consumption has decreased to 46.38 million litres per day following the removal of fuel subsidies by the Federal Government. Ahmed Farouk, the Chief Executive of NMDPRA, made this announcement during a stakeholders meeting with oil and gas downstream operators in Lagos.

Farouk stated that this figure represents a 35% reduction compared to the previous consumption rate of 65 million litres per day when fuel subsidies were in place. He further explained that the daily consumption had gradually declined since the subsidy removal was announced on May 29. The average truck-out for petrol consumption decreased to 46.38 million litres per day.

He provided an overview of the daily consumption figures for the past months, highlighting the decrease in petrol consumption after the subsidy removal. The figures showed that in January and February, the daily consumption stood at 62 million litres per day, increasing to 71.4 million litres per day in March. However, in subsequent months, it decreased to 67.7 million litres per day in April, 66.6 million litres per day in May, 49.5 million litres per day in June, and 46.3 million litres per day in July.

The purpose of the stakeholders meeting was to review the downstream sector following the subsidy removal and to express gratitude to the marketers who had taken up the opportunity to import petrol. Farouk also mentioned that over 56 companies had applied for import licenses, but only 10 had made commitments to import petrol. Other companies, such as 11 Plc, have shown interest in importing petrol in August and September.

Emphasizing the shift to a free market system, Farouk stated that the era of subsidy payment is over and encouraged all interested marketers to apply for import licenses. He emphasized that the market has been liberalized to allow for competition among various players, including the Nigeria National Petroleum Corporation Limited (NNPCL). The aim is to avoid dominance by a single player and ensure the availability of petrol throughout the nation.

The NMDPRA’s focus is to create an environment that encourages multiple players to import petrol, thereby fostering competition and providing consumers with more options. With the subsidy removal, marketers have the freedom to determine their prices, further promoting a competitive and dynamic market for petrol in Nigeria.

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