OIL EXPORTS ACCOUNT FOR 80% TOTAL NATIONAL REVENUE

The oil and gas sector still accounts for 80 per cent of Nigeria’s total national revenue despite crude oil theft, Opeoluwani Akintayo writes.

Nigeria’s exports in the second quarter of 2022 were dominated by crude oil, accounting for 80 per cent of total export revenue despite the huge oil theft recorded in recent times. Data sourced from the National Bureau of Statistics latest report on Merchandise Trade showed that crude oil exports valued at N5.9bn accounted for 80 per cent of total exports undertaken by Nigeria in the period under review.

The country had in recent times recorded an increase in the activities of pipeline vandals, resulting in a rise in crude oil theft, according to the Group Chief Executive Officer, Nigerian National Petroleum Company Limited, Mele Kyari.

Kyari had stated in an interview late last month that the country’s low crude oil output was due to theft resulting from pipeline vandalism in the Niger Delta. According to him, 295 illegal connections had been located around the pipelines, which led to the shutdown of production.

“When you say we are losing 700,000 barrels of crude oil per day, we mean it. There is no company that will produce and lose 80 per cent of its crude oil that will continue to produce. So we deliberately shut down the pipeline whenever we see these infractions getting to a limit we cannot control. That means as we speak today, we know that there are at least 700,000 lock-ins that we could have produced that we can not do because we can not guarantee the safety of the pipelines.

“While we agree that some of the oil losses are due to technical issues, a larger percentage of it is due to theft. It is impossible for any oil company to continue to operate in such an environment.

“None produces oil for the next person to continue to steal it. If you produce and someone continues to take it, the wise thing is for you to stop the production. This is why we can not produce.”

In its report for August, the Organisation of Petroleum Exporting Countries said Nigeria’s July crude oil production was about one million barrels per day, down from 1.2mb/d recorded in June.

OPEC had raised Nigeria’s September production to 1.830mb/d from 1.826mb/d in August. According to the statistics on the Nigerian oil sector, crude oil production averaged 1.8 million barrels per day from 1.973mb/d, hitting an all-time high of 2.475mb/d in November 2005.

Professor of Economics and Public Policy at the University of Uyo, Akwa Ibom State, Akpan Ekpo, told The PUNCH that despite crude oil retaining 80 per cent of the total trade, Nigeria should diversify as oil revenue was no longer reliable. “Oil prices are volatile, and we need to think of other ways to boost revenue,” he said.

In the second quarter of 2022, Nigeria’s total trade stood at N12.8bn, this was lower than the value recorded in the first quarter of 2022 (N13bn) but was higher than the value recorded in the corresponding period of 2021 which stood at N9.7bn. Total exports was N7.4bn, of which re-exports stood at N9.6bn, while total imports stood at N5.4bn, according to the NBS report.

In the quarter under review, total exports increased by four per cent when compared to the first quarter of 2022 (N7.1bn) and by 47 per cent of the value recorded in the second quarter of 2021 (N5bn).

On the other hand, total imports decreased by eight per cent in the second quarter of 2022 when compared to the value recorded in the first quarter of 2022 (N5.9bn) and grew by 16 per cent when compared to the value recorded in the corresponding quarter of 2021 (N4.6bn).

Read more at: https://punchng.com/oil-exports-account-for-80-total-national-revenue/

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