As Nigeria’s refineries continue to sit idle, fuel imports remain a major user of foreign exchange as $690.19m (about N285.95bn, using N414.3/$, I&E rate as of Tuesday) was utilised in eight months amid the lingering forex scarcity in the country.
The latest data from the Central Bank of Nigeria showed that the forex used for fuel imports from January to August this year fell by 34.79 per cent from $930.31m in the same period of 2020.
The CBN’s data on sectoral utilisation for transactions valid for forex revealed that $45.76m was utilised in January for fuel imports; $64.67m in February, and $142.31m in March.
Forex for fuel import transactions fell to $77.96m in April and $85.64m in May but rose to $86.42m in June.
The country utilised $83.73m in July and $103.70m in August for petroleum products importation.
In its January economic report, the CBN said despite the resurgence of the COVID-19 pandemic, domestic economic activities improved in that month, boosting the demand for the importation of both fuel and non-oil products.
It said import of petroleum products increased significantly to $0.64bn in January 2021 from $0.13bn in December 2020, and constituted 20.0 per cent of total imports.
“The development was as a result of increased importation of premium motor spirit and Automotive Gas Oil in the review period,” it added.
The Nigerian National Petroleum Corporation is the major supplier of petroleum products in the country and has been the sole importer of petrol for more than four years as the market realities forced private marketers to stop the importation of the product.
The amount spent on the importation of petrol in the first half of this year jumped to N1.47tn.
The data also showed that petrol topped the list of products imported into the country in Q2, accounting for 11.26 per cent of the total amount spent on imported products, up from 10.04 per cent in the previous quarter.
“The corporation has continued to diligently monitor the daily stock of PMS to achieve smooth distribution of petroleum products and zero fuel queue across the nation,” the NNPC said in its latest monthly report.
Nigeria relies almost wholly on imports to meet its fuel needs as its refineries have remained in a state of disrepair for many years despite several reported repairs.
The NNPC spent a total of N905.27bn on petrol subsidy from January to August, according to data from the corporation.
The subsidy, which the NNPC prefers to call ‘value shortfall’ or ‘under-recovery’, resurfaced in January this year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in oil prices.
The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the crash in oil prices.