With Nigeria’s oil not likely to be an income resource in 10 years time, according to Minister of State for Petroleum Resources, Ibe Kachikwu, oil workers are currently pressing President Muhammadu Buhari to ignore any counsel that will cause chaos in the country’s economy.
Many European countries and China, the second largest consumer of crude oil, have however, set deadlines to ban vehicles power by petrol and diesel as well as the global race towards alternative energy.
And, with Nigeria’s oil infrastructure requiring urgent rehabilitation and upgrade, the private sector is being encouraged to venture into the building of pipelines and refineries as government cannot afford the resources to solely fund such projects.
‘’We have to get the private sector to build pipelines, build infrastructure, tariff those infrastructure. More jobs would be created; you’ll have gas to power much easier’’, Kachikwu said, pointing out that as of today, Nigeria has hit 7,000 megawatts of electricity but only has the capacity to distribute about 4,000.
‘’This means we have about 3,000 megawatts sitting there. What does it take? Infrastructure.’’ He argued that if Nigeria had three or four Dangotes building refineries, the equation would change, as focus would shift from scarcity to export, thereby bringing down price.
He was speaking during a presentation of the outlook of oil in 2018 which he said looks promising in terms of prices. While the unprecedented price of $100 per barrel may never be reenacted, it could hit $60 by the end of the coming year, he said.
According to the minister, ‘’everything all added up together is showing us that towards the last quarter of 2018 we expect a better market. Does that better market translate to 100 dollars price (per barrel)? Never! I don’t see it, frankly I don’t see it. It’s going to take a major calamity. Largely because on the back of all these, countries are racing away from oil.
‘’Nigeria must brace up for the inevitable shock on its oil-reliant economy as the industrialised world rapidly moves towards making the hitherto black gold lose its relevance in the global energy mix. In 10 years’ time, I’d be very surprised if any country that has not diversified enough is counting really seriously on oil. If Europe is saying in five years time, `we are going to exit oil cars to electric cars’, oil, therefore, is getting its last years.’’
On the promised modular refinery to each state in the region, he said two investors had shown interest and had begun to ramp up: ‘’There is no barrier as to how many modular refineries in a state. It’s subject to availability of crude.
‘’My dream under this new concept is to see at least two per state actually begin well-funded, well-established, well-located, everything in place and they are actually beginning to build. Challenges to modular are that an average modular is about 20 million dollars; you need to have the right partners, right crude supply. On this, we just recently sent a team to Russia in connection with the modular refineries.’’
The minister said current production was 1.6 million barrels per day but with recent fluctuations, it was inevitable that Nigeria would get more crude-cut exemptions from the Organisation of Petroleum Exporting Countries (OPEC).
In the mean time, the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) do not want the Federal Government to yield to any pressure on removal of fuel subsidy.
PENGASSAN General Secretary, Okugbawa Lumumba, and his NUPENG counterpart, Afolabi Olawale, in a statement took on the International Monetary Fund (IMF) that is pressing the Buhari administration to act swiftly on the fuel subsidy issue.
IMF Managing Director, Christine Lagarde, had on April 12 called on the Federal Government to remove fuel subsidy because of low revenue mobilisation that existed in terms of tax to Gross Domestic Product.
But the oil workers are insisting that the IMF advice on how to recover Nigerian economy was worrisome as it had become counter-productive, adding, ‘’any economic policy that is devoid of human feelings can lead to more social dislocations and upheavals, which will later become counterproductive as currently experienced.’’
The oil workers’ unions are claiming that IMF has created panic in the country with associated hoarding of petroleum products, panic buying, skyrocketed increases in prices of goods and services in the country.
The IMF chief had earlier praised the significant progress the country had made in terms of her Gross Domestic Product (GDP) that increased by 1.9 per cent in 2018 from 0.8 per cent in 2017. ‘’Sadly, the IMF is not considering the pains and agonies the people go through to achieve the gains of 2018, with almost two-thirds of the world’s hungriest people among Nigerians’’, the oil workers said.
They have accordingly cautioned that imposing more stringent reforms in domestic revenue mobilisation including increase in Value Added Tax (VAT) and securing more domestic oil revenues through subsidy removal was an attempt to destabilise the nation.