By Kingsley Omose
A transition is taking place in the downstream oil and gas sector that can be regarded as the pre-NNPC era and post-NNPC era on petroleum products production and distribution.
The process of transitioning from pregnancy to the actual birth of a baby for a woman is called BIRTH PANGS, and as much as the baby in the womb has gotten accustomed to that environment for 9 months, being born is actually in that baby’s best interest.
So, these birth pangs that Nigerians are currently going through with acute fuel scarcity across the country and the attendant pains, sufferings, and difficulties associated with this are in the best interest of Nigerians.
Within the confines of the womb, the foetus, it is not even regarded as a baby yet, is dependent on the woman carrying the pregnancy for nourishment and air needed for survival, and for overall protection and well-being.
For the 9 months of the pregnancy, other than the occasional kicks, there is little or nothing that the foetus can do other than patiently wait, endure, and sacrifice, but above all, to grow to a state of viability to survive the birth process.
Some foetuses are unfortunate to be hosted by women who take various steps advertently or inadvertently to terminate the pregnancy so that they can be rid of the burden and constraints of being pregnant and to live life solely for pleasing and satisfying themselves.
The sad reality for Nigerians is that their experiences have been like the foetus carried by a Nigerian state with its governing apparatus (Ministries, Departments, and Agencies) and governing officials deliberately intended in their abortion and doing everything possible to achieve this.
Nowhere is this more visible in Nigeria than in the situation regarding the availability of petroleum products, value-added products that come from the refining of crude oil, a resource that Nigeria has in abundance.
You would expect that a country floating on crude oil and having the capacity to be the 6th largest producer in the world would also be floating in overabundance in the availability of petroleum products needed as a primary energy source to power the activities of Nigeria.
If you speak to anyone with an elementary understanding of economics, they will tell you that a basic theory of economics is that the more energy that is consumed in a country, the more the economic activities of the people and the better their well-being and welfare. This is called the Energy-GDP nexus.
According to Meta AI, “There is a strong positive relationship between energy consumption and economic growth. In other words:
– As energy consumption increases, economic activity and growth also tend to increase.
– Conversely, as economic activity and growth increase, energy consumption also tends to rise.
This means that energy consumption can be seen as an indicator of a country’s economic size and growth. The more energy a country consumes, the larger its economy is likely to be, and the more economic activity is taking place.”
In Nigeria, the Federal Government through its MDAs and governing officials, has stood this basic economic theory of Energy-GDP nexus on its head by deliberately and consistently acting to deny Nigerians access to the energy needed to power their economic activities and the corresponding economic growth.
Through NNPC Ltd, the government has not been able to maintain not to talk of an increase in crude oil production, which has fallen from a possible 2.47 million barrels a day to 1.3 million a day, out of which only 800,000 barrels of crude oil a day come to Nigeria after it’s producing partners take their share.
In the downstream sector, the 4 government-owned refineries in Port Harcourt (2), Warri, and Kaduna, operated by NNPC Ltd, have not produced petroleum products for over 20 years despite having their full complement of staff and undergoing several Turn Around Maintenance costing over 12 billion USD.
This has seen the government through NNPC Ltd resorting to petroleum products importation, which has again exposed Nigerians to abuses from the importation of low-quality petroleum products to the emergence of what is called fuel subsidy or under-recovery.
The fuel subsidy or under-recovery disaster has caused over 12 trillion Naira loss to the Nigerian people seeing it has been an opportunity to declare petroleum products daily consumption that has nothing to do with the economic activities of the people, and which correspondingly has even reveresd the country’s Energy-GDP nexus.
Like the pregnant woman trying vigorously to abort her pregnancy, the Federal Government through NNPC Ltd has vigorously tried to truncate the economic activities of Nigerians and, by extension, their well-being and welfare by stifling their energy consumption.
It has taken Aliko Dangote, putting down 20 billion USD to build the 650,000 barrels a day of crude oil refining capacity to provide a ray of hope that the Energy-GDP nexus of Nigeria can now be set on an upward trajectory through reliable, consistent and adequate provision of petroleum products to power the economic activities of Nigerians.
So, whether it is the ongoing opposition from those in government through its regulatory agencies, the NNPC Ltd, tank farm owners and operators, petroleum products marketers, and those unions in the downstream sector, Nigerians need to endure the birth pangs associated with the transition to the post-NNPC Refinery era.
There is a coming economic boom that is going to be unleashed in Nigeria once the consistency of petroleum products from Dangote Refinery is assured through reliable availability of Nigerian crude oil that will propel the Energy-GDP nexus of Nigeria in the direction of China and India, that will make irrelevant the pump price of petrol and other petroleum products.
Nigerians only have to endure the birth pangs.
Kingsley Omose is a Public Policy Analyst