Nigeria’s Fuel Consumption Plunges by 92% Post-Subsidy Removal
October 21st, 2024
Lagos, Nigeria – In a significant shift in Nigeria’s energy landscape, the nation’s daily fuel consumption has plummeted by a staggering 92% since President Bola Tinubu assumed office on May 29, 2023, and subsequently abolished the fuel subsidy.
Data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reveals a precipitous decline in fuel demand. As of August 20, daily consumption had dwindled to a mere 4.5 million liters, a far cry from the 60 million liters consumed daily in May 2023. This drastic reduction can be attributed directly to the removal of the fuel subsidy, a policy that had long been a drain on government resources.
Uneven Distribution Exposes Regional Disparities
The NMDPRA report further highlights stark disparities in fuel distribution across Nigeria’s 36 states. Only 16 states received fuel allocations from the Nigerian National Petroleum Company Limited (NNPC) during the analyzed period. This uneven distribution resulted in acute fuel shortages in many regions, underscoring the challenges posed by the subsidy removal.
NNPC Allocations Favor Key States
Among the 16 states that received fuel allocations, Niger State emerged as the largest beneficiary, securing 21 truckloads, equivalent to 940,000 liters per day. Lagos and Kaduna followed closely with 12 truckloads each. Other states, such as Oyo, Kano, Ondo, Kwara, Edo, and Abuja, also received significant allocations.
However, states like Sokoto, Ogun, Osun, Gombe, Benue, Ekiti, and Kebbi received significantly fewer allocations, highlighting the uneven distribution of fuel across the country.
Subsidy Removal: A Bold Move with Far-Reaching Consequences
President Tinubu’s decision to eliminate the fuel subsidy, a policy that had cost the government approximately 12 trillion naira over a decade, was a bold move aimed at reforming the nation’s economy. While the move has led to a substantial reduction in fuel consumption, it has also triggered widespread protests and economic hardship.
The sharp decline In fuel consumption has far-reaching implications for Nigeria’s economy. It could lead to reduced revenue for the government, job losses in the oil and gas sector, and increased transportation costs for businesses and consumers. Additionally, the uneven distribution of fuel has exacerbated regional disparities and social tensions.
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