EDITORIAL: Nigeria, privatize the Oil sector Now! Vivian Chima writes in from Umuahia, Abia
I’ve always given thoughts to the fact that the Federal Government should indeed privatize the oil sector and restrict its activities to being an industry regulator if we must get it right in that sector.
What does it really take to get it right in the Oil sector in Nigeria, so many years of running that sector aground. The vultures that have held tenaciously to the downstream oil sector are now vampires sucking the blood that runs through its veins and by extension draining the life out of Nigerians, what an unconscionable set of bloodsuckers!
It is quite baffling to not only Nigerians but also observers globally that a top oil producer like Nigeria has continued to depend on imported refined petroleum products despite being a major exporter of crude.
It is quite a sad irony that as crude prices peak at the international market, the sufferings of Nigerians intensify, like people barely eat a nutritious meal a day presently in the country, seriously, I weep for my country.
At peak production, Nigeria is Africa’s largest crude producer. Relying on multiple sources, Yahoo Finance ranks her the world’s 15th top producer, and Angola 16th. Nigeria’s production currently hovers between 1.22 million barrels per day and 1.5 million bpd. It has an OPEC quota of 1.78mbpd and capacity for much higher.
The National Bureau of Statistics said Nigeria spent N16.9 trillion importing petrol between June 2015 and October 2022.
Nigeria Extractive Industries Transparency Initiative NEITI reported that the NNPC’s crude swap arrangements for refined products gulped N2.6 trillion in 2021. Subsidy on imported products cost N4.39 trillion in 2022, and N3.36 trillion in the first half of 2023. What a devastating outcome these have had and continue to have on the economy!
At my last check, Saudi Arabia’s state-controlled oil giant Aramco just on Sunday reported a record net income of $161.1 billion for 2022 — the largest annual profit ever achieved by an oil and gas company.
Aramco said net income increased 46.5 percent over the year, from $110 billion in 2021. The question I now ask is; why not Nigeria?
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Nigeria has four moribund public refineries in Port Harcourt (two), Warri, and Kaduna and has spent billions of dollars which amounts to trillions of naira over the years carrying out vague Turn Around Maintenance (TAM) without commensurate result, all washed down the usual drain and conduit pipe of corruption, what a huge pity! SMH.
Now, the Federal Government vis-a-vi the Nigerian National Petroleum Company LTD has no explicable reason not to commence with immediate effect the recognition of modular refineries especially with the recent news that the landing cost of petrol has hit over #720.
The government should meet serious business-minded men and women at the table for serious discussions on how to invest in the downstream oil sector, this must be followed with the action of making crude oil available at a regulated rate for these private investor to purchase and process under the sincere and watchful supervision of the FG as the regulator.
Nigeria should as a matter of immediacy start realizing self-sufficiency in refined products which of course should be private sector-driven.
For me, government should sell the four refineries immediately in transparent and corruption-free auctions to reputable investors to attract foreign-Direct investment and engender healthy competition in the downstream oil sector and not the ritual-like, wasteful and ineffectual TAM!
Now is the time to get it right Nigeria!