DPR Explains Why Nigeria Suffer from Oil Price Decline

Fri, Mar 4, 2016
By publisher
2 MIN READ

Energy Briefs

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THE Department of Petroleum Resources, DPR, has said that the dire consequences of the effects of oil price downturn on Nigeria were due to the country’s wholesale reliance on trading unprocessed crude oil. Mordecai Ladan, director, DPR, said revising strategies to optimise the hydrocarbon value chain and getting out of the raw material dilemma is key to getting the country out of perennial slough of price slides.

At the Third Roundtable on Nigerian Economy organised by the NewsDirect Newspapers in Lagos, 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.

According to him, Saudi Arabia with only 29.2 million populations has 3.3 million barrels per day refining capacity. Iran and Singapore with populations of 54.16 million and 5.4 million also have 1.618 million and 1.395 million barrels per day local refining capacities, respectively.

Similarly, India with a 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 petrochemicals, chemical solvents, fertilisers, and plastics sectors generate economic cum industrial multiplier effects. He 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 percent, which is about 3 million barrels per day. Ladan noted that West Africa has less than 25 percent 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 billion consumes 7.5 million barrels of oil daily, while Malaysia with 24.3 million people consumes 501,000 barrels daily. He also stated that Singapore with its small population consumes 834,600 barrels daily, while Nigeria with its huge population consumes only 312,000 barrels daily.

— Mar 14, 2016 @ 01:00 GMT

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