Business News

Nigeria spends N3.5 trillion on fuel importation since subsidy removal

Fuel Imports

Data from the National Bureau of Statistics reveals that Nigeria spent a staggering N3.5 trillion on fuel imports in the second half of 2023.

Fuel subsidy was removal was announced on the 29th of May but it took weeks to be fully implemented.

According to the 2023 full-year foreign trade data, Nigeria incurred about N7.5 trillion in fuel import costs throughout 2023, compared to N7.7 trillion in the previous year.

However, fuel importation costs for the country in the second half of the year amounted to N3.5 trillion, versus the N3.9 trillion recorded in the first half of the year.

Using the 2023 exchange rate, the country has spent approximately $7.7 billion on fuel importation in 2023.

The Tinubu administration discontinued fuel subsidies on May 29, 2023, during his inauguration speech.

Some reports suggest that the removal of subsidies may result in lower demand for petroleum products due to higher prices. However, the ensuing depreciation of the naira also meant that it became more costly in naira terms to import products.

The importation of motor spirit, also known as fuel, has cost Nigeria a staggering N23.5 trillion over the last five years.

What next? As Nigeria awaits the full operations of the Dangote Refinery and the availability of domestic supply, fuel imports will continue.