Nigeria’s importation of petroleum products from Niger: The other side of a coin


– By Haruna Inuwa

For us, I do not know how we define our sense of patriotism. If today, we don’t politically align our sentiments with the people at the helm of our affairs, we would take a long ride of repudiating every single policy put in place. Pray for unsuccessful projects, so that we can harshly and spontaneously criticize the people in charge. Turn our eyes religiously blank and pretend nothing make sense from other political camps.

Our own definition of politics is different, yet legendary. And, no nation on the mother earth could match our Nigerian-made political system.  In the books of our political system, nothing really makes sense to us; let them fail, after all, we didn’t vote for them to be there.

But one undeniable fact is: if the people at the helm of our affairs woefully fail, like a concrete parachute; the nation at large fails. That is a monumental failure you get there. If they succeed the nation will progress. So let’s toss up, which way you want to follow? The writer knows his way. I hope the reader discovers his/her way. 

Let the reader not forget, the title of this essay is “Nigerian importation of petroleum products from Niger: The other side of a coin”. The giant of Africa, Nigeria discovered her black gold (Oil) in the year 1956 at Oloibiri, Bayelsa state by Shell-BP.

The oil discovery changed the entire position of the economic profile of the country. Life was one long Christmas then, jingle bells all the way. Fatefully, Nigeria joined the oil-producing countries with oil production of 5,100 BPD in 1958.

The government-owned refineries were accordingly built to meet up with the domestic requirement at that time. Port Harcourt refinery in late 1965 had a capacity of 38,000 barrels per day (BPD) and was later expanded to 60,000 (BPD) after the civil war. Warri refinery which was later constructed in 1978 with a capacity of 100,000 BPD, Kaduna refinery began operation in the mid-1980s with also a capacity of 100,000 BPD, and finally, the fourth refinery was completed at Alesa Eleme, increasing overall Nigeria’s refining capacity to 445,000 BPD. As a result of that, a shareable portion from these four refineries was exported.

In what is an absolute absence of painstaking legal frameworks and poor management, our refineries are now in an unfortunate state of existence. It is a sorry state when we can no longer refine our own crude for both domestic purposes and generate a huge source of revenue from importation. By the early 1990s, due to significant growth in demand for gasoline domestically and insufficient output from the government-owned refineries, the NNPC was pushed to refine some gasoline abroad.

The banging questions begging for answers are numerous; I will put a stop here. Some will say poor management. Others will say corrupt-driven system. In a nutshell, we lack policy implementation, and the hard-earned nonsensical nature of the political class, every now and then, makes us go from the bad to worse.

According to NNPC data, our four refineries generated revenue of N6.54bn from January-August in 2020. But these same refineries effortlessly quaffed N81.41bn for routine maintenance – leaving a deficit of N78.78bn. This is recklessly unacceptable.

The government having irresponsibly failed to reconstruct these refineries, for a long time, opted for petroleum products importation across the coastline. Nigeria in recent years faces an overwhelming economic instability; no thanks to the global oil price. Until recently, the Nigerian economy is entirely oil price-driven. That said, the fate of our economy is being tagged to the increase or decrease in oil price globally.

 Against these backdrops, the economic recovery becomes a must, and total deregulation of the Nigerian downstream oil sector becomes inevitable. The price that we must all pay in this short-term run is a continuous increase in petroleum price, scarcity of petroleum products, and so on. Not trying to be a pessimist in my submission, it is going to a bumpy ride ahead.

Now, the other side of a coin

The Nigerian government, by all means, is trying to avoid the scarcity of petroleum products and huge forex spending to import petroleum products. This is exactly why the MoU of petroleum products importation from Niger favors Nigeria. The Niger Republic through Soraz Refinery with the installed capacity of 20,000 bpd has some excess petroleum products which need to be evacuated (a surplus of 15,000 bpd against the 5,000 BPD domestic requirement in Niger). One of the most interesting parts of this MoU is the long-lasting and sustainable commercial framework to establish pipeline infrastructure from Niger to Nigeria for easy transportation of petroleum products. Looking at the logistics cost of transportation across the coastline, it favors Nigeria, and therefore, cheaper to import petroleum products from the Niger Republic.

In the long-term, with a continuous increase of investment in modular refineries from the private investors, I am confident that the era of petroleum products importation will come to an end. Yesterday, in fulfillment of this administration’s Refinery Roadmap in 2018, Waltersmith Modular Refinery with the capacity of 5,000 bpd and groundbreaking of 45,000 bpd was commissioned in Imo state. While we patiently wait for the Dangote’s mega-refinery with the installed capacity of 650,000 bpd to come on-stream (hopefully by late 2021 according to Bloomberg) and Bua Group’s 200,000 bpd refinery, we should at the same time welcome the government’s effort to reduce fuel scarcity in Nigeria by the importation of petroleum products from Niger.

As Toba Beta rightly said, a nation moves slower than the market. This nation moves at a slower rate, and if we really mean well to our country, we should celebrate this little progress regardless of the concurrent disappointments from our leaders. No nation thrives on the turfs of never-ending negativity.

My name is Haruna Inuwa and I write from Greater Noida

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