The insatiable demand for petroleum products in Nigeria is draining the lean resources of the country even as it was revealed that the nation spent N2.17trillion in the first nine months of 2020 on the importation of petroleum products into the country.
According to the latest data obtained from the National Bureau of Statistics (NBS), consists of petroleum products, imported include mineral fuels like Natural gas, oil, Bituminous coal, amongst others.
A breakdown of the nation’s spending on the importation of these products shows that a total of N1.25trillion was spent in the first quarter of the year, Q1’20, represented by N662.2billion, N290.6billion, and N299.8billion in January, February, and March.
Apparently, due to theoutbreak of the Covid-19 pandemic which led to a nationwide lockdown, thespending on the importation of petroleum products declined significantly in thesecond quarter of the year (April to June) to N221.3billion.
The nation’s petroleumimport for Q2’20 shows an 821% decline when compared to the first quarterimport statistics.
However, in the thirdquarter of the year, the country recorded another sharp increase in spending onpetroleum products importation at N700.4billion, at the time the governmentrelaxed the lockdown.
Europe topped Nigeria’s highest source of imports, as a total of N593.3billion was spent in sourcing the products from the continent, while Asia came second with N61.4billion, followed by America’s N37.2billion.
Surprisingly Nigeriaalso imported petrol from African countries spending a total of N8.6billion.
Meanwhile, stakeholdersacross the nation have continued to lament on the state of the nation’spetroleum industry.
Available statistics show that Nigeria holds 37 billion barrels of proven oil reserves as of 2016, ranking 10th in the world and accounting for about 2.2 percent of the world’s total oil reserves of 1.65 trillion barrels.
Nigeria has provenreserves equivalent to 237.3 times its annual consumption.
This means that, withoutNet Exports, there would be about 237 years of oil left (at current consumptionlevels and excluding unproven reserves).
Globally, Nigeria stoodat 37th in oil consumption, accounting for about 0.4 percent of the world’stotal consumption of 97 million barrels per day.
Nigeria consumes 0.10 gallons of oil per capita per day or 35 gallons per capita per year. Refineries operations Nigeria also has four refineries situated at Kaduna, Warri, and two in Port Harcourt, but they are all in a series of challenges plaguing the fate of its productivity, as they have failed to produce any petroleum product in the past three years.
Despite this abundance, the nation’s four refineries processed no crude, and combined yield efficiency is zero percent in the first nine months of 2020.
Though industryauthorities have claimed that this flat output was, due, largely to on-goingrehabilitation works in the refineries, records show that the output positionhas been less than 10 percent of installed capacity in the last 10 years.
However, the authorities are of the view that despite the deplorable operational state attributable to the ongoing revamping of the refineries, the efforts are expected to further enhance capacity utilization once completed. In its latest operational report, the Nigeria National Petroleum Corporation (NNPC), stated that “The Corporation has been adopting a Merchant Plant Refineries Business Model since January 2017. The model takes cognizance of the Products Worth and Crude Costs.”
A cumulative of the combined value of output by the four refineries (at Import Parity Price), along with the operational expenses in the first eight months of 2020 amounted to an operating deficit of N74.8billion.
This shows a decline of28 percent when compared to the corresponding period of 2019 which recorded N104billion.It was gathered that there was no associated crude plus freight cost for therefineries since there was no production.
The Petroleum Product Marketing Company (PPMC), a subsidiary of NNPC, sold a total of 9.86 billion liters of petroleum products between January and August 2020. This is a decrease of 30 percent when compared to 14.108 billion liters sold in the corresponding period of 2019.
The decrease, according to the corporation, is a result of low operational activities due to the outbreak of the Covid-19 pandemic.
The Department ofPetroleum Resources (DPR), has assured Nigerians of petroleum products’availability and stable fuel supply in the country at all times on the strengthof its import dependency.