TITLE:
Economic Advantage of In-Country Utilization of Nigeria Crude Oil
AUTHORS:
Emeka Emmanuel Okoro, Adewale Dosunmu, Kevin Igwilo, Paul A. L. Anawe, Angela O. Mamudu
KEYWORDS:
Crude Oil, Refineries, Refining and Petrochemicals
JOURNAL NAME:
Open Journal of Yangtze Oil and Gas,
Vol.2 No.4,
October
30,
2017
ABSTRACT: Crude oil refining is a unique and important link in the supply chain of petroleum products from the wellhead to the end user. Refining adds value through conversion of crude oil and other flows into dozens of co-refined products. Nigeria is probably the largest importer of refined petroleum products on the continent, creating a lucrative refinery market in Europe and the United States. Subsidies have also contributed to the low capacity utilization in our refineries. The current situation of the four National refineries and high dependency on crude oil proceeds has made Nigeria government a full time exporter of crude oil. Because of our population, the demand for refined products which are imported in foreign currency have induced pressure on our local currency; thus, presenting a large cost to the economy. Instead of looking for international crude oil traders or embarking on discounted sales of our sweet crude in this era of low crude oil price, it will be profitable to utilize this crude oil in Nigeria. We will not only export the raw crude but also enrich our petrochemical industries and agricultural sector with the byproducts or co-products from its refining. Investment in petrochemical industry will really bring about an astounding effect in our economy because of enlargement of private domain which will usher new phase of life by reducing inequalities in the nation’s income. There has never been a doubt about the large size of the Nigerian market for refined crude oil and petrochemical products. As more countries are discovering crude oil, Nigeria’s crude oil export will gradually drop leaving us with excess crude oil instead of excess crude account. There is a need for government to develop industrial sectors that support or leverage its energy resources. The actualization will make it possible for Nigeria to change from raw material supplier to value-added product supplier.