Nigeria spent a total of N11.89trillion on the importation of Premium Motor Spirit (PMS)- petrol-between 2020 and 2022, according to data released by the National Bureau of Statistics(NBS). New Telegraph’s analysis of the NBS’ “Foreign Trade in Goods Statistics” reports for the last three years, shows that the country spent N5.22trillion on the importation of petrol last year compared with N4.56trillion and N2.11trillion in 2021 and 2020 respectively. This means that petrol imports gulped a total of N11.89trn in the threeyear period.
It also means that petrol importation in 2022 was higher by N655.76billion or 14.38 per cent compared with the N4.56 trillion recorded for the preceding year. For instance, in its “Foreign Trade in Goods Statistics” Q4’22 report released last week, the NBS stated: “In terms of Imports (CIF), in the fourth quarter of 2022, China, Belgium, India, The Netherlands, and the United States of America were the top five countries of origin of imports to Nigeria. “The values of imports from the top five countries amounted to N2,993.67 billion representing a share of 55.82 per cent of the total value of imports. The commodities with the largest values of imported products were ‘Motor Spirit Ordinary’ (N1.558 billion), ‘Gas Oil’ (N220.47 billion), and ‘Durum Wheat (Not in seeds)’ (N187.96 billion).
“The value of total imports stood at N5,362.83 billion in the fourth quarter of 2022, this showed a decrease of 15.46 per cent when compared with the value recorded in Q3’22 (N6.343 billion) and also declined by 9.73 per cent, compared to the value recorded in the corresponding quarter of 2021 (N5.940 billion).” Although Nigeria is one of Africa’s largest crude oil producers, the country’s inability to ensure that its four refineries, with a combined capacity of 445,000 barrels per day (bpd), efficiently process oil, has meant that it depends heavily on petroleum products imports. This means that even when ex- ternal shocks, such as Russia’s invasion of Ukraine on February 24, last year, leads to a significant increase in oil prices, Nigeria is unable to fully benefit from the situation as it spends huge amounts on imported petroleum products annually.
Thus, in its Q3’22 Economic Report, for instance, the Central Bank of Nigeria (CBN) stated: “Provisional data revealed that merchandise imports fell by 8.9 per cent to $11.36 billion in 2022Q3, relative to $12.48 billion in the preceding quarter. “The development was observed, majorly, in the importation of non-oil products, which declined by 17.3 per cent to $7.63 billion, from $9.22 billion. Conversely, import of petroleum products increased by 14.6 per cent to $3.73 billion, from $3.26 billion. “The increase in petroleum products import was to cover domestic supply shortages in the period. The share of non-oil import remained dominant, accounting for 67.2 per cent of the total, while petroleum products constituted the balance of 32.9 per cent.” New Telegraph reports that CBN Governor, Mr. Godwin Emefiele, had disclosed at the IMF/World Bank Annual Meetings in 2021 that the country spends almost 40per cent of its scarce foreign earnings on the importation of petroleum products and petrochemicals, a situation, he said, depletes the apex bank’s dollar buffers, thereby putting pressure on the naira exchange rate. He, however, expressed optimism at the time that once the Dangote Refinery and Petrochemical Plant commenced operations, the country would be in a position to be able to save the huge amount of the FX it spends on the importation of petroleum products as well as petrochemicals and that the apex bank would in a better position to float the naira. Emefiele said: “On the Dangote Refinery, by the time it begins production, it is going to be a major source to save forex for Nigeria. Right now, the overall forex we spend on imported items, the importation of petroleum products consumes close to 30 per cent. “By the time you add diesel, aviation fuel, petrol and the rest of that which makes up the 30 per cent, the Dangote Refinery has the capacity to produce 650,000 barrels per day. There is a domestic component that is about 455,000 barrels. Even if the 455,000 is what is sold to Dangote in naira alone, it is going to be a major forex savings for Nigeria.”