Importing Premium Motor Spirit (PMS) also known as Petrol/Fuel has cost Nigeria N958.3 billion, representing more than 120 percent increase five months earlier and an increase of more that N80 billion within the same period last year.
Nigeria has been forced to rely on importation for about 95 percent of its fuel consumption needs since the government has been unable to fix the refineries. The rising fuel imports had put additional pressure on the country’s foreign reserves and contributed to the worsening economic situation.
Industry experts have argued that the amount spent on fuel imports could build five 20,000-barrels-per-day mini-refineries, and one of such refineries would cost the government between $75 million and $250 million.
They are of the opinion that in naira terms, higher expenditure on petrol imports gives an impression of worsening foreign exchange position for the country and emphasizes the need to activate the country’s four idle refineries.
According to the National Bureau of Statistics (NBS), the Federal Government’s imports of PMS between January and April this year cost Nigeria N431.6 billion and that the country had imported about N874 billion worth of petroleum products during the same period in 2015.
NBS’ data showed that Nigeria imported about N254.6 billion worth of Automotive Gas Oil (AGO) in the same period compared to N118.7 billion products in the previous quarter.
The value of imported Household Kerosene (HKK) also increased from N20.2 billion to N25.5 billion in the current period under review.
A Professor of Technology Management at the Obafemi Awolowo University, Ile-Ife, Francis Ogbimi, said Nigeria could become self-sufficient in petroleum products by building 10 more refineries, and creating learning infrastructure, as Japan did, to promote rapid competence-building growth and industrialisation.
Director of the Centre for Petroleum, Energy Economics and Law at the University of Ibadan, Adeola Adenikinju asked the government to privatise the refineries.
He identified government’s continuous interference in commercial aspects of the downstream sector as a major hindrance to the sector.