Double jeopardy: From PMS import to Crude Oil import
...$3bn loan gone as Naira continues depreciate
The problems of Nigeria are humongous in extent and chaotic in detail.
In our efforts to end PMS imports, we graduated to crude oil import.
Nigeria is Africa’s largest crude oil producer, in close competition with Angola, but we will now rely on partial crude oil import to service Dangote Refinery.
Why? NNPCL sold or mortgaged Nigeria’s crude oil for the next 15 years to obtain a $3 billion dollar loan.
The reason for the loan was to boost our foreign reserves and defend the Naira.
Guess what! Nigeria has received the $3 billion loan and the Naira further depreciation significantly, thereby defeating the purpose of the loan.
And Deadi body geti accident, because Nigeria saw no benefit for the $3 billion loan and now, NNPCL with 20 per cent stake in Dangote Refinery cannot supply enough crude oil for Dangote refinery.
We simply created another problem while trying to solve a problem. We ended up with two problems, continued Naira depreciation and crude oil import for Dangote Refinery.
This is my next question?
Where will Nigeria get crude oil supply to Port Harcourt Refinery when it comes onboard?
What about the modular refineries we are busy commissioning. Where will they get crude oil supply from? They may all have to depend on importation ofcourse.
Nigeria is not divided into BATISTS and non BATISTS but many Batists and the Batified have defended crude oil import by Dangote Refinery.
My answer to them is that
- Crude oil imports by Dangote refinery will increase the unit cost of pms produced by Dangote.
- Pressure on the Naira since we will pay for crude imports in USD.
It now seems obvious to me that crude oil import was part of the plan of Dangote refinery from the onset.
My submission is based on the fact that Dangote refinery with a processing capacity of 650,000 barrels per day will require a daily inventory of 1,000,000 barrels of crude oil.
But the total daily crude oil production by Nigeria is 1,300,000 barrels per day.
Welcome to transformation in Nigeria.
From PMS import to Crude Oil import.
Our problems are indeed, Chaotic in detail!
Many thanks to Mele Kyari!p