…Spending $28bn on fuel importation yearly
Oscarline Onwuemenyi 21 June 2017, Sweetcrude, Abuja – Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has revealed that Nigeria lost a whopping $6 billion to vandalism of oil and gas infrastructure in the last five years.
The minister, who lamented that Nigeria had been plagued with a continuous import cycle of 92 per cent of its daily fuel consumption, also disclosed that the country spends $28 billion in foreign exchange annually on petroleum products importation.
Making these revelations at the recent African Modular Refinery forum in Abuja, organised by the Modular Refiners Association of Nigeria, MRAN, in partnership with the Department of Petroleum Resources, DPR, Kachikwu did not give details of the $6 billion loss to vandalism.
The Federal Government last month celebrated three months of not witnessing pipeline vandalism from militant activities in the Niger Delta, but the nation had in the last five years seen ferocious attacks on oil and gas facilities, leading to the $6 billion loss.
One the affected facilities, the Shell Nigeria-operated Forcados pipeline, returned to operation only two weeks ago, after production was disrupted for months following repeated attacks by Niger Delta militants.
Besides the loss to oil infrastructure vandalism, the minister also stated that Nigeria incurred subsidies for petrol and kerosene estimated at $65 billion from 2011 to 2015.
According to the minister, had the $65 billion loss to fuel subsidy been properly applied, it would have been able to finance and actualise the Vision 20:2020 target of 50 per cent national refining capacity of crude oil produced in Nigeria, to stimulate employment and economic growth, and ensure significant reduction in the foreign exchange expenditure for petrol imports.
He lamented that despite the country’s four refineries, Nigeria had been plagued with a continuous import cycle of 92 per cent of its daily fuel consumption.
Despite these challenges, the minister said he was focused on the objective of ensuring the nation attained 50 per cent domestic refining capacity by the fourth quarter of 2018 and 100 per cent capacity by the fourth quarter of 2019.
On the cost of fuel importation to the country, Kachikwu said Nigeria spends $28 billion in foreign exchange annually on that and that a significant percentage of the amount was being spent on funding the logistics of the importation.
“The foreign exchange requirement for importation of petroleum products is estimated at $28 billion (N3.35 trillion) annually, with 40 per cent of the total amount (N1.34 trillion) dedicated to financing the logistics of importation,” Kachikwu said.