CBN Disburses $1.25 Billion for Petrol Import as Dangote Partners Oil Firms to Crash Price
- The Central Bank of Nigeria stated that it paid out $1.25 billion to operators in oil sector between January and September 2024
- This came after fuel subsidies were removed, and the oil industry was restructured to boost domestic production
- The $1.25 billion represented a 40% increase over the $891 million that the apex bank provided dealers in 2023 for the same period
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
The Central Bank of Nigeria said that between January and September 2024, it disbursed a total of $1.25 billion to oil sector operators for importing petroleum products and other associated goods into the nation.
Source: Getty Images
This followed the removal of fuel subsidies, alongside changes made to the oil industry aimed at increasing domestic output
Punch reported that the $1.25 billion represented 40% more than the $891 million that the apex bank gave dealers during the same time frame in 2023.
Marketers continue to import
Despite the availability of petrol from the Dangote plant, marketers have insisted on continuing fuel imports, which explains the quantity released during the first nine months of 2024
Fuel imports, a major consumer of foreign cash, impact the country's foreign reserves and the naira-to-dollar exchange rate.
During the same period, the CBN reported that $18.78 billion in foreign exchange was allocated to 19 sectors and services that aimed to engage in imports and other forex-related activities.
The government deregulated the petroleum market completely in October, enabling refineries to sell directly to consumers. After a pricing conflict between the Nigerian National Petroleum Company Limited and the Dangote refinery, this policy abruptly increased the price of gasoline to N1,060 per litre before it was lowered to N935 per litre in December.
More breakdown
According to the report, petrol imports cost $26.55 million in January 2024, $161.88 million in February, and $334.47 million in March.
In April and May, gasoline import forex declined to $106.48 million and $150.45 million, respectively, but in June, it increased to $36.82 million.
The nation spent $192.71 million and $107.10 million in July and August, respectively, on the importation of petroleum products.
Nigerians spent N5.14 trillion on mineral fuel imports in the third quarter of 2024, according to the National Bureau of Statistics.
Crude oil refiners and other downstream industry participants said last year that the dollar prices on locally produced Premium Motor Spirit, or gasoline, as well as the expense of importing crude are the main causes of the product's high price in comparison to imported PMS.
According to the Crude Oil Refinery Owners Association of Nigeria, some of the fees for locally processed goods are still in dollars, which emphasizes that this impacts the price of these goods.
Marketers partner with Dangote to get cheaper fuel
Legit.ng earlier reported that more fuel marketers partnered with the Dangote Refinery to guarantee Nigerians a consistent supply of petroleum products at reasonable costs.
A few weeks following the strategic partnership with MRS Oil Nigeria Plc, which allowed the company to sell Premium Motor Spirit (PMS), commonly known as fuel, at a lower price than competitors, more petroleum marketers have continued to enter into agreements with the refining giant in an attempt to increase sales and drive down prices.
Numerous petroleum marketers are considering signing a strategic agreement with Dangote Refinery to gain market dominance.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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