The Illusion of Poverty

The fuel scarcity crisis lead me to really investigate the role of fuel distribution and production in the Nigerian economy. As it stands we import $6.8 billion worth of fuel each year. This means that the country is exporting $6.8 billion worth of naira every year. This is the result of not having the capacity to refine enough crude oil into fuel to meet our own domestic needs.

We purchase fuel from various countries. Our biggest suppliers of refined crude are:

Netherlands
Belgium
United Kingdom
Italy
Germany
Sweden

The middle men who have been making a good profit from this lunacy are all traded on the Nigerian Stock Exchange. They are all members of the Major Oil Marketers Association of Nigeria (send your love letters to them at:Eleganza Plaza, Plot 634, Adeyemo Alakija Street, Victoria Island, e-mail info@moman.org). The members of MOMAN are:

Conoil            Nigerian owned
Forte Oil        Nigerian owned
Mobil             American owned
MRS              American owned
Oando           Nigerian owned
Total              French owned

This is where $6.8 billion dollars of your currency goes each year.  It gets wired to Europe where our oil is refined and sent back to us. Courtesy of the members of MOMAN and a few smaller outfits like Capital Oil & Gas. This is absurd. But actually it's worst than absurd when you consider that we have four refineries in the country which are currently not functional. There are two refineries located in Port Harcourt, one in Warri, and one in Kaduna. If they were operating at peak performance they would produced more than 100,000 barrels of fuel beyond what we presently consume daily. And therein lies the other side of the cost of not producing fuel for ourselves.

Besides the $6.8 billion we are spending, there is the money we could be making by selling our excess production to other countries who desperately need it. How much money could Nigeria make selling refined crude products? Well let's see what other nations have done with refined fuel sales. These are countries which don't even have oil.

Singapore     $62.4 billion
India             $52.9 billion
South Korea $51.5 billion

Given that we produce the petroleum right here in Naija, we have what you call economies of scale in the production process and better logistics. In its nascent stages our fuel exportation could reap upwards of $25 billion for the economy.

When we do the math that's $6.8 billion + $25 billion =   N6,329,790,095,400 every year that we should be generating in our economy. That's about 5% of the current real GDP of Nigeria. Mind you that the 2015 budget which was passed by the senate just the other day was N4,493,363,957,158. 

What does that tell you? It tells me that our resources have been mismanaged with depravity.