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The ripple effects of the recent removal of fuel subsidy by the federal government have spread to Europe with demand by Nigeria for petroleum products from refiners in that continent drying up.
The European refiners are left to seek a new market, according to agency reports yesterday.
Much of Nigeria’s crude is refined in Europe, particularly Belgium and the Netherlands.
Stiff competition from the Middle East, the United States and Asia had initially constrained production by the Europeans until fears of fuel supply shortages sparked by Russia’s invasion of Ukraine helped them bounce back.
And now the move by their biggest market in West Africa, Nigeria.
North America is the other top destination for petrol exports from Europe, which produces more gasoline than it uses.
Average monthly fuel imports by West Africa where Nigeria is the dominant market reportedly fell by 56% in the second quarter of this year compared with the first while June loadings from the Amsterdam-Rotterdam-Antwerp (ARA) hub to West Africa fell to 629,000 tonnes from 895,000 tonnes during the corresponding period last year and 1.2 million tonnes in 2021.
Similarly, loadings dropped to 627,000 tonnes in July so far this year from 1.5 million tonnes last year and 1.4 million tonnes at the same time in 2021.
“The key point is demand from West Africa is drying up,” an analyst said.
The report said the reduction of flows following the upheaval in Nigeria will increase pressure on European refiners, and winners are likely to be newer Middle Eastern refineries.
Nigeria spent $10 billion last year alone to import fuel.
However, following the subsidy removal, demand for fuel has fallen by 28 per cent largely because of the massive reduction in fuel smuggling to neighbouring countries like Benin, Togo, Cameroun and Niger Republic.
A video that recently went viral on social media showed a location said to be a once thriving market for fuel smuggled from Nigeria.
The spot was littered with dozens of empty drums and jerry cans.
The subsidy removal has led to sharp increases in transport fares and cost of living across Nigeria.
President Bola Tinubu has appealed to Nigerians to bear the pains of fuel subsidy removal and its negative impact on cost of living, promising that there would be significant improvement in living standards generally.
Peoplesmind
