21 April 2015, Lagos – Business Monitor International has said oil consumption in Nigeria is expected to increase from 311 000 bpd last year to 400 000 bpd by the end of 2023.
Business Monitor International risk analysis and forecasts, market research on leading industries, and multinational company research is relied upon by corporate bodies, banks, government departments and multilateral organisations in over 125 countries around the world.
According to the report, the increase is credited to improvement in the transport sector and the continued use of diesel power generators as backup methods to the country’s intermittent power supplies.
BMI forecast that the recent collapse in oil prices will reinforce the likelihood of fuel subsidy reductions in the country, adding that the low fuel prices should in theory enable subsidy reductions without an increase in regulated fuel price.
It noted that looking at the downstream sector, the country does indeed have a large refining capacity, however the adverse consequences of fuel subsidies, poor maintenance and general operational failure has resulted in the sector’s utilisation rates remaining below 30% over the last 10 years.
Also, it stated that refined fuels production could increase from 2015 onwards however with the Escravos GTL plant starting operations, and the important 500 00 bpd Dangote refinery which is expected to come online by 2020.
On gas, the report further stated that with the prospect for higher domestic gas prices and the promising domestic demand from the power sector, there should be some stimulation in private investment in infrastructure to increase gas production levels. “This at the moment is turning into a slow ramp up in gas monetisation and production. The expansion of LNG capacity in the country is unlikely given the unreliable supply side and an uncertain demand side.