There’s no gain saying that petroleum oil is the mainstay of the Nigerian economy. Nigeria has the largest proven oil reserves in Africa. Petroleum exports make up over 91% of Nigeria’s total export value. Nigeria is among the 10 highest oil exporting countries in the world. Nigeria’s oil and natural gas exports are the main factor behind the country’s economic growth. Oil is the leading export product, not just in Nigeria, but in the world. With an average daily production of some 1.5 million barrels in 2023, Nigeria is the fifteenth largest oil producer worldwide.
The above statistics tell any casual observer that oil is the foundation of most successful economies in the world. The middle east countries like Saudi Arabia, United Arab Emirates, Kuwait, Iran, Qatar, Bahrain etc, rode on the back of oil to transform most of their third world countries to their different levels of movement towards the first world. Some of these countries were borrowing money from Nigeria in the sixties and seventies. So competitive is the interest of the world in oil that countries are prepared to go to war to secure their sources of crude and refined oil. Aliko Dangote, the richest African man, disclosed recently that the mafia in international oil business is more dangerous than the mafia in international illicit drug business. It follows without doubt that any country with billions of oil reserves and still remains poor is suffering from acute corruption index.
Nigeria is leading in this inglorious path of very corrupt country that is basking in the river of oil but unfortunately has become the poverty capital of the world. The regime of President Bola Tinubu came into existence on May 29th, 2023 after the disastrous regime of President Buhari. For the avoidance of doubt, Bayo Onanuga, one of the Spokespersons of the President, publicly proclaimed that Tinubu inherited a dead economy from Buhari, while Tinubu himself declared that he inherited a rotten financial economy from Buhari. If these claims are true, it then means that Buhari’s oil development programmes in Nigeria were dead and rotten. Buhari himself ran under the mantra that fuel subsidy was a fraud and that he was going to remove it during his regime. He unfortunately continued in the fuel subsidy fraud until he completed the eight years in office.
Tinubu came in and removed the entire oil subsidy from day one and threw the whole oil industry into chaos. It was not planned and was ill-timed. Assuming that was not enough, he devalued naira per dollar by more than 300%. The economy went into a free fall that saw naira hit almost N2,000.00 per a dollar. What incompetence and corruption can not do does not exist.
This government has been struggling to know whether it can gather its acts together in the oil sector and turn the situation around. In the 2025 budget which this government presented very late to the national assembly, President Tinubu estimated the production of 2.06 million barrels per day, $75 per barrel export price. As a matter of conscientious evaluation of these estimates, there’s nothing unachievable about them. Nigeria was at a certain time in history producing about 2.6 million barrels per day. With about 40 billion barrels of oil reserves in Nigeria, the budget estimate of 2.06 million barrels of oil per day is achievable. If I am even allowed to hazard a guess, I can even opine that it’s even possible that we are already achieving that estimate now.
Nigeria is buffeted with the scourge of officially organised syndicate of international and local oil thieves. There were uncountable number of illegal oil pipes attached to the main official pipes discovered recently through which oil was freely and effortlessly diverted to the oil thieves who carry them away with vessels that come illegally into our territorial waters for such nefarious illicit oil trade. If this government is serious in achieving this 2.06 million barrels per day as opposed to the 1.5 million per day which it’s currently producing, the first thing it should do is to tackle oil thieves and bring them to justice.
With the last presidential chat in which Tinubu stated that his strategy of fighting corruption is to increase wages and provide education, fighting the oil thieves is a tall order. This is mainly because nobody can succeed in stealing oil in large quantities except he is a member of the cabal surrounding the presidency or is backed by a member of the cabal surrounding the presidency. Solomon Dalung, former Minister under Buhari, described Tinubu’s cabal as sophisticated, powerful, and dangerous. So it follows that they will develop a very sophisticated and dangerous methods to steal crude oil away from Nigeria and make it impossible for this regime to achieve the estimate of 2.06 million barrels per day of oil production.
This regime must also liberally grant exploration licences to qualified oil companies to engage in the production of crude oil which is flowing in Nigeria like river. These licences should not be issued at great cost of bribery to the producers so that the notorious impression of Nigeria as fantastically corrupt in the eyes of the world will be cleaned out.
The downstream sector is even more important than the upstream sector. It is always more beneficial to any government to add value to a product before selling it. Imported fuel is the greatest destroyer of our foreign exchange. For the past more than 30 years, our refineries have been comatose. Several billions of dollars have been pumped into them with no appreciable sign of optimum operation.
Just recently, more than N824b and $2.5b were pumped into the repairs of the refineries and nobody had told Nigerians how the money was spent. The commencement date of the refineries was shifted for more than four times without the courtesy of telling Nigerians why. The output from the Portharcourt and Warri refineries cannot be equated with what has been spent so far on repairing them. Again, the NNPCL should tell Nigerians how much it costs to produce one litre of fuel so that Nigerians will know whether their operations are sustainable because it’s the Nigerian people that will eventually bear the consequences of any loss that the ill-managed NNPCL will incur.
This government should immediately set in motion the process of privatising all the refineries in its custody to different qualified players in the oil industry. You do not commercialise a public business enterprise in a corrupt society like Nigeria without first of all privatising it. The management of such enterprise, if not privatised, will simply turn the enterprise as dumping ground for the employment of their incompetent, greedy relatives who will be paid humongous salaries for doing nothing in the running of the affairs of the company. Can you imagine that for more than 30 years of the non operations of the refineries, all their workers were being paid for doing nothing. Indeed, more workers were being employed daily to be receiving salary without doing any work. If an agency has not worked for more than 30 years and stopped employing workers from the day it stopped working, it then follows that after 35 years, all the workers would have effectively retired. The mere fact that there are still many workers in the NNPCL shows that employment was still going on during all the days the company was not operating.
The company doesn’t care whether it is making any loss because the managers will bear no consequences for the loss. They will not be prosecuted for stealing any money and the loss will be borne by the state. Furthermore, any President like Tinubu, who is cantankerous to the spirit of diversity will fill up the company with his kinsmen and loyalists who will in turn be wiped out and replaced when another government comes in by four years’ time. The resultant instability will certainly kill the company.
No private company can ever employ substandard unqualified workers to work for it,and will ensure efficiency in its spending in order to achieve a profit after deducting its cost of production. It took Dangote less than five years to build one of the largest refineries in the world, it took Nigeria more than 30 years to repair its refineries, and yet the four refineries are still not functional
There’s absolutely nothing to rejoice about the resumption of the refineries until the price of fuel is affordable to the average Nigerian which will bring down the cost of transportation and reduce the cost of production which will translate to reduced prices for food and other items thereby bringing down the inflation and cost of living. Nigerians are dying of hunger and hardship and we can produce and refine our way out of poverty with the termination of corruption in the oil industry, and the privatisation of the refineries to ensure saturation of the system with supplies and breaking of monopoly which will ensure competition amongst the practitioners in the oil industry.