Nigerians spend N12.3 trillion on petrol, diesel in six years

Nigerians spent a whopping N12.3 trillion on the purchase of petrol and diesel in the last six years, an analysis of the Nigerian National Petroleum Corporation (NNPC’s) Monthly Financial and Operations Reports (MFOR), between April 2015 and April 2021, has shown.

This is coming as the country and other developing oil-producing nations have continued their efforts to discover more hydrocarbons, despite the global campaign against fossil fuels, especially as the world races against net-zero carbon emissions by 2050.

A review of the contribution of the sale of diesel to the total consumption by the 36 states of the federation showed that it added less than five per cent, when compared with that of petrol, which on the average constituted about 95 per cent every year since 2015.

Nigeria currently imports 100 per cent of all refined products under an arrangement called Direct-Sale-Direct-Purchase (DSDP), with all the refineries having packed up since around 2017.

Total revenues generated from the sales of white products for the period April 2015 to April 2016 stood at N740.16 billion where petrol contributed about 89.08 per cent of the revenues collected with a value of N659.35 billion for that year.

In that base month, the value of N79.50 billion was collected as sales revenue for white (refined) products sold by the Petroleum Products Marketing Company (PPMC), a subsidiary of the NNPC, compared with N85.66 billion collected in the previous month.

In April the following year, a total sale of N199.11 billion was made on the petroleum products for white products by PPMC compared with N206.42 billion sold in the prior month of March 2017.

Total revenues generated from the sales of white products for the period April 2016 to April 2017 stood at N1.72 trillion, where petrol contributed about 85.39 per cent of the total sales with a value of N1.472 trillion.

The analysis shows that a total sale of N347.79billion was made on the petroleum products for white products by PPMC in April 2018 compared with N184.02 billion sold in the prior month of March 2018.

In the same vein, total revenues generated from the sales of white products for the period April 2017 to April 2018 stood at N2.27 trillion, where petrol contributed about 88.12 per cent of the total sales with a value of N2.00 trillion.

About N261.36 billion was made on the sale of white products by PPMC in April 2019 compared to N174.62 billion sales in the previous month of March 2019.

In all, revenues generated from the sales of white products for the period April 2018 to April 2019 stood at N2.858 trillion, where petrol contributed about 91.84 per cent of the total sales with a value of N2.62 trillion.

In addition, a total of 990.17 million litres of refined or white products were sold and distributed by PPMC in April 2020 compared with 1.647 billion litres in March 2020. This comprised 941.11 million litres of petrol, 47.16 million litres of diesel, and 1.78 million litres of kerosene, which the NNPC has now fully stopped importing.

It is unclear how Nigeria’s poor, who mostly use kerosene now source the product, although there’s a huge illegal refining industry in the Niger Delta.

Added to that, the sale of white products for the period April 2019 to April 2020 stood at 21,027.43 billion litres where petrol accounted for 20,834.36 billion litres or 99.08 per cent.

Furthermore, a total sum of N107.61 billion was made on the sale of white products by PPMC in April 2020 compared to N192.37 billion sales in March 2020.

Revenues generated from the sales of white products for the period April 2019 to April 2020 stood at N2.562 trillion, where petrol contributed about 98.68 per cent of the total sales with a value of N2.528 trillion.

Moreover, a total sum of N220.08 billion was made on the sale of white products by PPMC in April 2021 compared to N234.56 billion sales in March 2021.

Total revenues generated from the sales of white products for the period April 2020 to April 2021 stood at N2.157 trillion, where petrol added about 99.27 per cent of the total sales with a value of N2.141 billion.

Cumulatively, an estimated N740.16 billion worth of petrol was consumed by Nigerians between April 2015 and the same month in 2016; it more than doubled between the period April 2016 to April 2017 to about N1.72 trillion and further increased markedly the following year running from April 2018 to April 2019, to about N2.27 trillion.

Between April 2019 and April 2020, N2.85 trillion worth of fuel was consumed by Nigerians but reduced the following period to N2.56 trillion before further decreasing between last year and this, to N2.15 trillion.

Products importation has constituted a major burden on the country’s foreign exchange earnings, with the national oil company unable to discharge its statutory obligation to the joint federation account in May.

Meanwhile, Nigeria and other developing oil-producing nations have continued their efforts to discover more hydrocarbons, despite the global campaign against fossil fuels, especially as the world races against net-zero carbon emissions by 2050.

Despite the move led by the United States, which is pressuring other developed countries to ramp up their search for renewable and cleaner-burning fuels, resource-dependent countries like Nigeria are devoting more funding for its exploration for the commodity.

Apart from Nigeria, other countries like Brazil, Ghana, Guyana, and Suriname, at the just concluded Offshore Technology Conference (OTC) in Houston, Texas, United States, laid out agenda for massive oil and gas discoveries that could reshape their economies, if they can get them to market before values erode.

While this year’s Houston conference showcased cleaner fuels and the urgency of emissions reduction, accentuating low-carbon tech, offshore wind, and clean-burning hydrogen, Nigeria has insisted that it will continue to take full advantage of its hydrocarbons as the country’s energy needs and the developed world’s sharply contrast.

Nigeria is currently deploying 30 per cent of the Nigerian National Petroleum Corporation (NNPC) profit oil and gas to prospecting for oil and gas in the frontier basins as the federal government recently said it won’t allow the country’s barrels to waste.

The country is proposing this investment although the much-talked energy transition is gaining momentum. Minister of State for Petroleum Resources, Chief Timipre Sylva, while responding to the global pressure, had noted that Nigeria does not have enough resources to join the race to renewable energy any time soon.

“We are not really in the race to renewables as a country and even as a continent, we are not very much in the race to renewable. Let’s look at where we have our comparative advantage.

“Our comparative advantage today as far as energy is concerned is the area of oil and gas. “We have a lot of gas in this territory, unfortunately, we have not focused on gas, and gas is considered to be a cleaner fuel.

“Some people have begun to discuss gas not as a transition fuel, but as a destination fuel. So, it is also considered a renewable fuel.