The demand for Premium Motor Spirit (PMS) or petrol in Nigeria has declined by 30 percent since President Bola Ahmed Tinubu announced the removal of fuel subsidies in May.
Mele Kyari, the Group Managing Director (GMD) of the Nigerian National Petroleum Company Limited (NNPCL), who disclosed this at a media briefing on Friday, also said the nation’s crude oil production including condensate, has increased to 1.67 million barrels per day.
Kyari spoke on Friday during a press conference in Abuja.
According to the GMD, the fall in fuel demand from approximately 66.7 million litres daily before the removal of subsidies to approximately 46 million today means a 30% reduction in NNPCL’s demand for foreign exchange to import fuel.
“That means NNPC was carrying the subsidy burden for the whole federation until it became very obvious by the time Mr. President took over that it is no longer possible to proceed because you do not have the cash to pay for it and NNPC could potentially go into negative cash flow. Another word for it is bankruptcy.
“And it was impossible to continue. So it wasn’t really a matter of even preparedness. As the minister has said, it was no longer sustainable, that you cannot do what you cannot afford.
“You do not have and at that point in time, the subsidy burden was about N400 billion every month. And if the situation has continued, I can tell you in today’s market condition, pricing in the market and also the FX regime, we would have been dealing with close to N1 trillion of subsidy every month at this point in time.
“We simply don’t have those resources anymore. You are not just saving money, you are also passing realities around what you can’t afford. And as a result of that change, we saw demand go down by 30 percent.
“May I also use this opportunity to say that I was just checking the data for Wednesday. The actual data for crude oil and condensate production is at 1.67 million barrels per day.
“This is substantial, if you look at the situation where we were almost going below a million barrels some months ago. This is quite substantial. And the connection of this to subsidy was that you cannot give what you do not have”, he said.