The Federal Government has announced a significant reduction in the volume of Premium Motor Spirit (PMS) consumed across the country following the deregulation of the fuel sector.
According to the government, in the first half of 2023, a total of 11.26 billion litres of petrol were consumed nationwide.
However, after the removal of petrol subsidy in June, daily consumption decreased by an average of approximately 18.5 million litres.
Data obtained from the Nigerian Midstream and Downstream Petroleum Regulatory Authority revealed that from January 1 to May 28, 2023, during the pre-deregulation period, the country consumed about 9.9 billion litres of petrol. The average daily consumption during this period was approximately 66.9 million litres.
In contrast, from June 1 to June 28, 2023, the post-deregulation period, total petrol consumption dropped to 1.36 billion litres, with an average daily consumption of 48.43 million litres.
This analysis indicates an 18.5 million litre decrease in average monthly consumption after the removal of the petrol subsidy.
While there were instances of petrol consumption exceeding 100 million litres on certain days, the post-deregulation period showed consumption figures consistently below 78.84 million litres throughout the captured 28-day period.
The lowest consumption figure during this period was recorded on June 11, with only 470,000 litres consumed nationwide.
President of the Nigeria Association for Energy Economics, Prof. Yinka Omorogbe, expressed support for the removal of fuel subsidies, citing the negative practices associated with the subsidy regime.
The smuggling of petrol to neighboring countries had been a longstanding concern raised by the Nigerian National Petroleum Company Limited and oil marketers during the subsidy period.
Although the removal of fuel subsidies has had some adverse effects, including cost implications, it is seen as a necessary step toward curbing malpractices and promoting efficiency in the sector.