Nigeria heading into deeper economic hole, despite rising global oil demand —11 Plc boss

AS demand rises in the global oil market and Nigeria is not able to benefit maximally, the Chief Executive Officer (CEO) of 11 Plc MrTunji Oyebanji has said that the delay in deregulating Nigeria’s downstream petroleum sector, has increased its borrowing and debt, thereby dragging the country into a deeper economic hole. 

Formerly known as Mobil Oil Nigeria Plc, 11Plc produces and markets a range of petrochemicals which includes gasoline, motor oils, lubricants, marine fuel and jet fuel. 

While discussing “Deregulation of Nigeria’s Petroleum Sector: Connecting the Dots,” in a WebTV program monitored in Lagos,Oyebanji observed that while policymakers are wary of the negative impact of deregulation on Nigerians, the country is on the edge of an economic crisis. 

He said Nigeria must make a choice and the way forward for the government is to explore how to minimise the effects of fuel subsidy removal on the citizens. 

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“If we avoid taking a decisive step in implementing the full deregulation of the downstream petroleum sector, the country will head into a deeper economic hole,” he warned. 

Meanwhile, information culled from Oilprice.com confirms that as uncertainties are building around the supply capacity of OPEC+, oil demand rages on. 

This, according to energy experts, ought to be another opportunity for Nigeria to increase sales and supply in the face of revenue challenges. 

On the Petroleum Industry Act (PIA) and the need for full implementation of its provisions, the 11 Plc CEO noted that it took 20 years for the PIA to be signed into law and there are fears that, it would take an equally long process to transform the petroleum industry. 

In the area of commercialisation of state oil companies like the Nigeria National Petroleum Company (NNPC), he agreed that transparency and corporate governance are among the critical components. 

Speaking on infrastructure and logistics, he said the PIA should encourage ‘Open Access’ across the country, stressing the fact that it would require more investments in pipelines that would help in moving products. 

However, to add to the bullish sentiment in the oil market, another form of supply disruption is springing up around the world: strikes. 

According to information available on Oilprice.com, operations at France’s Fos Refinery were halted by strikes and Norway’s offshore production was heavily impacted by them as well. It seems the oil market is under siege from all sides, from fundamental tightness to underinvestment, disruptions related to the war in Ukraine, and now strikes. 

OPEC+ agreed to maintain a 648,000 b/d increase in its production target for August, keeping its commitment unchanged despite increasing evidence that spare capacity within the oil group has thinned to its lowest level in years.