The amount spent on oil and gas imports to the country increased by 50.2 per cent to $4.01bn in the second quarter of the year from $2.67bn in the first quarter, latest data from the Central Bank of Nigeria has shown.
In its ‘External Sector Development Report’ for the second quarter, which was released last week, the CBN attributed the narrowing of the country’s current account surplus to higher import bills on crude oil and gas, among others.
Other factors include increased dividend and profit repatriation from $4.66bn in the first quarter of 2014 to $6.13bn in the second quarter as well as lower performance of non-oil exports in the second quarter, compared to the levels in the first and second quarters of 2013.
“The performance of the external sector was mixed in Q2 2014 as evident in the decline in the current account surplus, some improvements in foreign capital inflows and relative stability in the foreign exchange market engendered by the reforms in the BDC segment of the market,” the central bank said.
The current account surplus dropped to $1.55bn (1.1 per cent of GDP) from $4.59bn (3.6 per cent of GDP) and $4.79bn (3.8 per cent of GDP) in the first quarter of the year and second quarter of 2013, respectively, according to CBN.
“Furthermore, the growth in oil sector imports was mainly facilitated by the low domestic refining capacity, which induced increased importation of fuel to meet domestic demand,” it said.
The country’s refineries have long been operating well below installed capacity as they are in different states of disrepair. They operated at an average of 10.46 per cent of their combined nameplate capacity of 445,000 barrels per day in June, according to data from the Nigerian National Petroleum