President Bola Tinubu’s removal of fuel subsidy in Nigeria has greatly affected refineries in Europe, according to a report.
The report disclosed that North America and West Africa, led by Nigeria, were the main destinations for oil exports from Europe.
It added that average monthly fuel imports in West Africa (WAF) fell 56 per cent in the second quarter compared to the first quarter.
The report said:
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“They have been supported by demand from North America, a shortage of high-quality blending materials, disruption caused by low water levels inland and local refinery outages.
“But analysts say the reduction of flows following the upheaval in Nigeria will increase pressure on European refiners, and any winners are likely to be newer Middle Eastern refineries.”
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Tinubu, in its first speech on May 29, 2023, announced the end of the fuel subsidy program, which caused a 35 per cent drop in petrol demand.
Speaking about the drop in demand, Jeremy Parker, Head of Business Development, CITAC consultancy, which focuses on the energy sector in Africa, had explained that onshore oil reserves in Nigeria had grown to 960,000 tons compared to an average level of 613,000 tons from January to June.
Parker said:
“Meanwhile, the black market for smuggled subsidised Nigerian fuel in Togo and neighbouring Benin and Cameroon has collapsed, further reducing demand for shipments via Nigeria.
“There is no reliable data on how much fuel was smuggled out of Nigeria under the subsidy regime, but a comparison of estimates from official and independent sources indicate more than a third of petrol could have left state oil firm NNPC’s depots every day to be sold illegally abroad.
“Without the subsidy, the financial incentive for smuggling disappears.”
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