Victor EzejaNIGERIA’S expenditure on importation of petroleum products exceeded revenue generated through export of the products by $43.56bn in 2020.
This was revealed in a 2021 report released by Organisation of Petroleum Exporting Countries (OPEC) about the latest values of petroleum exports and imports of member nations.
The report stated that total value of petroleum products imported into Nigeria in 2020 was $71.285bn, while that of exports was $27.73bn in the same year.
This indicated that the country spent higher on imports than it got from exports by $43.56bn in the period under review.
Analysis of the OPEC’s data on petroleum imports and exports also revealed that Nigeria’s expenditure on petroleum products’ importation has repeatedly exceeded revenue the country generated through exports for five years.
The OPEC data stated that Nigeria’s petroleum imports were $46.55bn (2016), $49.51bn (2017), $73.85bn (2018) and $93.97bn (2019).
The country’s exports however, were $27.29bn, (2016) $37.98bn (2017), $54.51bn (2018) and $45.11bn (2019).
This cumulatively showed that the country had spent $98.99 billion more on imports of petroleum products between 2016 and 2019 (five years).
Nigeria is one of the major producers of crude oil and gas but lacks domestic refining capacity, which makes the country heavily dependent on the importation of petroleum products that are refined abroad to meet local consumption demands.
There are five refineries in the country of which four plants are owned by the Nigerian Government through Nigeria National Petroleum Corporation (NNPC) which include two in Port Harcourt, one in Kaduna, and one in Warri. But all have not been functioning optimally.
This equally led to the fuel subsidy regime which has made government spend a huge amount on subsidizing the cost for Nigerians, a scheme that has impacted negatively on the economy.
Due to the poor state of the refineries, a report by NNPC for April 2021 had indicated that foreign refineries processed crude oil valued at N2.39tn to ensure domestic supply of refined petroleum products in Nigeria.
The corporation said in the report that the volume of crude processed abroad between March 2020 and March 2021 was 145,86 million barrels.
The OPEC data summarily indicated that Nigeria had been spending more billions of dollars to import petroleum products than the amount of foreign exchange being earned through crude oil exports.
In an effort to revive the refineries, and boost local production, the federal government had during a Federal Executive Council meeting in August, approved the sum of $1.484 billion contracts for the rehabilitation of Warri and Kaduna refineries.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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