Oil windfall in Nigeria

Presently, it is obvious that the time is ripe for the oil producing countries to smile due to the unprecedented increase in oil price which eventually signaled an opportunity for a windfall. However, the situation is not the same for Nigeria as the country has plunged into deep fuel crisis that has remained persistent for over a month. This crisis borders mostly on adulteration of the Premium Motor Spirits (PMS), also known as petrol, as well as its corresponding scarcity across the nation.

It can be recalled that in the last three weeks, Russia has authorised a special military operation to invade the neighbouring country, Ukraine, which caused the usually volatile crude oil prices to skyrocket beyond bookmakers. As a result, many countries are counting their fortunes in the windfall but unfortunately, Nigeria is counting its losses due to mismanagement of resources by the Nigerian National Petroleum Corporation (NNPC).

Truth be told, the consequences of the mismanagement of Nigeria’s four refineries is that the 440,000 barrels of crude oil supplied to NNPC daily for local refining is exported and never transparently accounted for.

Meanwhile, the Group Managing Director (GMD) of NNPC, Mele Kyari claimed that N100 billion was sunk into the maintenance of the four refineries in Nigeria which is quite different from the N26bn already spent on supposed Turn Around Maintenance (TAM) on the maintenance of the refineries over the years which is an amount that will be sufficiently enough to build three new refineries as argued by many experts.

In addition, it is disheartening to learn that apart from being fleeced by NNPC and its collaborators in the name of oil subsidy or the strange term ‘under-recovery,’ Nigeria has failed to meet its oil production quota allocated by the Organisation of Petroleum Exporting Countries (OPEC). This shortfall is a result of the lack of investment, as International Oil Companies (IOCs) have continued to exit Nigeria’s oil sector.

The Ministry of Petroleum Resources, NNPC and its subsidiaries cannot convince Nigerians that there will be no gains from the current oil windfall. Such gains must not be frittered away under any guise.

Kabir Fagge Ali,

Abuja.

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