Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 32)

The importation of petroleum products into Nigeria continues to expand. In 2019Q2, imports totaled 5.61 billion litres of Premium Motor Spirit (PMS) or petrol, 1.38 billion litres of Automotive Gas Oil (AGO) or diesel, and 12.22 million litres of Household kerosene (HHK)1. Although, there were moderations in the importation of kerosene, petrol and diesel imports for the review quarter represented 15.2% and 14% QOQ increases respectively, and reflected the rising need for fuel consumption in Nigeria. While the increase in fuel imports is imperative to satisfy growing domestic demands, the path towards fuel self-sufficiency in Nigeria is becoming far-fetched. The NNPC had marked 2019 as the year for fuel independence; however, with the increasing fuel importation exacerbated by insufficient refining capacity and the lack of political will, the year 2019 may end without considerable achievement. While the recent licensing of modular refineries is a step towards meeting local demand, the full removal of subsidy will lead to cost-reflective pricing of petroleum products, thus incentivizing private investors into the upstream petroleum sector.

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