An analysis complied by OPEC shows the amount spent on the importation of petroleum products into Nigeria in 2020 is $43.46bn higher than the revenue which the country earned from the export of petroleum products in the same year. In its 2021 report on the latest values of petroleum exports and imports of member nations of the Organization of Petroleum Exporting Countries obtained in Abuja on Friday 1st October 2021, OPEC stated that Nigeria exported $27.73bn worth of petroleum products in 2020.
It also revealed that Nigeria’s petroleum imports in 2020 were worth $71.285 billion dollars, indicating that imports outstripped exports by $43.56 billion dollars during the review period. Nigeria’s purchases of petroleum products have continuously outpaced the country’s exports for the past five years, according to OPEC’s latest petroleum imports and exports numbers. Despite being a major producer of crude oil and gas, Nigeria is heavily reliant on imported petroleum products processed in other countries.
The major reason for this is because Nigeria’s refineries have remained dormant for several years, despite repeated turn around maintenance which were done by successive governments on the facilities. it is reported in August this year that foreign refineries processed crude oil valued at N2.39tn to ensure domestic supply of refined petroleum products in Nigeria. According to Nigerian National Petroleum Corporation revealed that N2.39 billion worth of crude oil was processed over a 13-month period. Due to the non-operational state of Nigeria’s refineries in Warri, Port Harcourt, and Kaduna, foreign refiners processed 145.86 million barrels of oil for the country between March 2020 and March 2021, according to the report.
Nigeria’s petroleum exports were $27.29 billion, $37.98 billion, $54.51 billion, and $45.11 billion in 2016, 2017, 2018, and 2019, according to the latest OPEC data released on Friday in Abuja. The Minister of State for Petroleum Resources, Chief Timipre Sylva, had disclosed that the government would make use of the African Continental Free Trade Area Agreement’s potential to reposition the oil and gas sector. This measure, it stated, will turn the country into a petroleum product refining center for the African area, with all the benefits that entails. Sylva said the government had begun rehabilitating the country’s refineries, using a public-private partnership strategy, adding that the refineries would have a 90 per cent combined production capacity by 2023. With these recent developments highlighted by OPEC, Nigeria is currently running at a higher rate of demand for Petroleum Products hence the excess in imports of products than exports. These factors a decline in patronage of our exported Petroleum Products, with an excess in deficit of $43.56bn. A blowback in the prices of AGO PMS MGO is on a collision course, and in order to keep up with the high demand of Petroleum Products, importation of the product is highly likely as the country currently lacks the capacity to produce enough to meet up with demands. As such an increase in price is looming or certainly an increase in subsidy expenses by the Federal Government.
Source: Punch, Head topics, Hallmark.
