Nigerians spend a huge amount on petrol monthly and the figure is likely to grow further because of uncertainties surrounding the importation of the product due to the non-payment of subsidy claims to marketers.
Consumer spending on petrol in the country will hit N672.39bn by the end of June. The Petroleum Products Pricing Regulatory Agency has pegged petrol consumption in the country at 38.298 million litres a day
“In terms of quantity, the average daily provisional PMS supply of 38.298 million litres was recorded as of March 2013,” the Executive Secretary, PPPRA, Mr. Reginald Stanley, said.
In line with this figure, therefore, over 1.18 billion litres of fuel was consumed in January; one billion litres in February; 1.18 billion litres in March; 1.14 billion litres in April; 1.18 billion litres in May; and 1.14 billion litres of fuel is expected to be consumed by the end of June, 2013.
At the official pump price of N97 a litre, the sum of N334.34bn was spent on petrol consumption in the first quarter of 2013, and by the end of June, consumer spending on petrol would have reached N672.39bn.
While N115.16bn must have been spent in January, investigations revealed that the February and March figures must have been N104bn and N115.16bn, respectively. These were followed by N111.44bn in April and N115.16bn in May. An average of N11.44bn is expected to be expended on petrol consumption in June.
By and large, about N672.39bn would have been spent on fuel consumption by Nigerians by the end of the sixth month.
Daily petrol consumption in Nigeria is currently 38.298 million litres; it was 60.259 million litres in 2011.
PPPRA records showed that daily fuel petrol consumption was 25.924 million litres per day in 2006; 26.385 million in 2007; 33.527 million in 2008; 36.812 million in 2009; and 46.906 million in 2010.
But the consumption pattern recorded a sharp increase to 60.259 million daily in 2011, a volume, which Stanley said was unparalleled in the nation’s history.
The 36.41 per cent drop in daily petrol consumption in the first quarter of 2013, according to the PPPRA boss, reflects that the downstream oil sub-sector has undergone massive sanitisation.
However, the possibility that consumers will spend more on petrol consumption in the third and fourth quarters of the year is high except something urgent is done.
It had recently been reported that the Federal Government owed major and independent marketers importing 67 per cent of the country’s petrol need about N100bn in subsidy claims.
The marketers, who said the non-payment of the debt could stop them from importing petrol, had warned of product scarcity if nothing was done to reverse the situation.
Analysts, however, said consumers would pay more for the product if another round of scarcity hit the nation, adding that this would definitely increase consumer spending on petrol in the third quarter.
The Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, told our correspondent that the Federal Government owed the marketers N100bn.
“The Federal Government owes oil marketers N100bn and this represents the main claims without interest,” he said.
Olawore explained that almost all the marketers had received payments for 2012 subsidy claims, but lamented that no payment had been made this year.
Against this background, he warned that it might become impossible for the marketers to continue to import petroleum products without being paid.
The MOMAN boss described the payment delay as a “throwback to last year’s experience when the government delayed subsidy payment on fuel cargoes brought in for two quarters and the companies incurred huge losses largely due to rising bank charges.”
With tight liquidity and bank loans hard to come by now, Olawore insisted that oil marketers might not be able to place orders for cargoes any further.
He said, “It is true that the Ministry of Finance has not paid us. They have paid 2012 claims to almost all the marketers. All what we have imported in 2013 has not been paid for and this is the sixth month of the year.
“Not that we sat somewhere and concluded that we would stop importing petrol, but because the banks are asking for their money plus interest, it may, therefore, become difficult for us to continue importing without being paid.”
Amid the fear of petrol scarcity, Nigerians have welcomed the proposed $8bn Dangote refinery, while clamouring for increased local refining of petrol products.
The President, Dangote Group, Alhaji Aliko Dangote, had in April announced plans to invest up to $8bn in building an oil refinery with capacity for around 400,000 barrels a day by late 2016.
The capacity, experts said, would almost double Nigeria’s current refining strength.
“This will really help not only Nigeria but sub-Saharan Africa. There has not been a new refinery for a long time in sub-Saharan Africa,” Dangote had told Reuters in a telephone interview.
Nigerians have also called for more refinery investments and urged the Federal Government to ensure that the existing refineries work at their optimal capacities.
Information from Punch was used in this report.