On Wednesday, the Federal Government of Nigeria announced a reduction in the country's petrol consumption, now at 50 million liters per day, with local releases contributing half of this daily requirement. The remaining quantity is being sourced through imports, with clarification provided that none of the domestic refining companies are engaged in importation activities.
During a press briefing following a stakeholders' meeting in Abuja, the Executive Director of Distribution Systems, Storage and Retailing Infrastructure at the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Ogbugo Ukoha, stated that the necessity of petrol importation arose to prevent potential scarcity in the downstream sector.
Mr. Ukoha elaborated, "Our collective experience during this recent festive season was free of scarcity. I can confirm that from year to year, there has been an increase in the demand for Premium Motor Spirit (PMS) from 2021 through 2022 and up until 2023, just before the current administration's tenure. The daily supply of PMS consistently exceeded 60 million liters, averaging approximately 66 million liters per day. However, following the President's withdrawal of fuel subsidy announced on May 29, 2023, we observed a sharp decline in consumption, stabilizing at approximately 50 million liters."
He further noted that of the total consumption, domestic refineries provided less than 50 percent, resulting in a shortfall that, in accordance with the Petroleum Industry Act (PIA), is being addressed through imports.
In addition, Mr. Ukoha announced a regulatory measure that prohibits the transportation of petrol and other petroleum products by tankers with a capacity of 60,000 liters or more, effective March 1, 2025. This decision comes despite objections from truck operators.
The National Association of Road Transport Owners (NARTO) warned last week that the ban could result in losses exceeding N300 billion naira due to investments made in over 2,000 trucks currently utilized for the transportation of petroleum products.
Mr. Ukoha explained that these larger tankers have been associated with a rise in petrol tanker fires across the nation and have significantly impacted the condition of Nigerian road infrastructure. He stated, "Today’s meeting, which included representatives from the Department of State Services, the Federal Emergency Management Agency, the Federal Fire Service, Road Safety, and various petroleum associations, resulted in the resolution that beginning March 1, any truck with an axle load exceeding 60,000 liters of hydrocarbons will be barred from loading at any depot."
He reiterated that starting March 1, trucks with a capacity over 60,000 liters will not be permitted to load at petroleum depots, and by the fourth quarter of 2025, the loading and transportation of petroleum products with any truck exceeding 45,000 liters will also be prohibited. This announcement constitutes significant regulatory news for the sector.