Petroleum Africa
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Monday, August 28, 2017
Nigeria’s refined fuel consumption is showing signs of recovery after a poor performance in 2016. According to a recent report by BMI Research, a confluence of factors weighed on refined fuels demand in 2016 that led to its poor performance. These factors included removal of fuel subsidies, economic recession and importing difficulties due to liquidity issues. These headwinds have somewhat abated and will continue to dissipate over the coming quarters. The economy is stepping out of recession and importing bottlenecks have eased as liquidity improves.
The report has economists forecasting positive GDP growth in Q217 and a full year average of 2.4%. From 2018 onward BMI forecast real GDP growth to stay above 3% for the remainder of its forecast period, which will underpin the positive outlook on Nigeria’s fuels consumption.
Diesel demand is also set to do well off the back of BMI Research’s infrastructure team’s bullish expectations for Nigeria’s construction sector; which is forecast to bounce back from -6% in 2016 to 1.9% in 2017
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