DPR: Why Oil Price Downturn Has Dire Effects on Nigeria
The Director, Department of Petroleum Resources (DPR), Mr. Mordecai Ladan has said that the dire consequences of the effects of oil price downturn on Nigeria was due to the country’s wholesale reliance on trading unprocessed crude oil, stressing that revising strategies to optimise the hydrocarbon value chain and riding out of the raw material dilemma is key to getting the country out of perennial slough of price slides.
Speaking at the Third Roundtabe on Nigerian Economy organised by the News Direct Newspapers in Lagos at the weekend, Ladan said the country should focus on local refining, adding that a refinery typically spins off ancillary activities thus further creating more indirect employments and economic benefits
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Ladan also pointed out that Indian with population of 1.29 billion has commensurate local refining capacity of 4.2 million barrels per day to cater for its huge population but lamented that Nigeria with her huge population of 170 million has only 446,000 barrels per day local refining capacity.
According to him, industrial derivatives such as petrochemi-
cals, chemical solvents, fertilizers, and plastics sectors generate economic cum industrial multiplier effects.
Ladan said this period of price downturn has offered opportunities for reconsideration of strategy by Nigeria.
The DPR boss regretted that out of the 90 million barrels per day global refining capacity, Africa holds a paltry five per cent, which is about 3 million barrels per day. Ladan noted that West Africa has less than 25 per cent of Africa’s refining capacity with refineries that were mostly commissioned in the 1970s and 1990s.
He insisted that Nigeria holds a great potential of developing its downstream sub-sector into becoming a refining and petrochemical regional hub for West Africa and Africa at large.
Ladan, whose presentation was on “Oil Price Downturn – Challenges and Opportunities,” also decried Nigeria’s low energy intensity in proportion to economic growth.
Citing data culled from NationMaster.com, Ladan stated that China with a population of 1.3 consumes 7.5 million barrels of oil daily, while Malaysai with 24.3 million people consumes 501,000 barrels daily.