Oil prices may go up because of Nigeria’s protective new policy
The Nigerian government hinted last week that it is putting necessary measures in place to stop large international oil firms from shipping out all the crude oil they produce in the country. It also stated that it would compel giants such as Royal Dutch Shell, Exxon Mobil, Chevron and other international firms operating in Nigeria’s oil sector to build refineries covering the local needs.
The reasoning behind is the fact that although Nigeria’s oil industry is the largest in Africa and comprises almost a tenth of the country’s GDP, the country imports most of its gasoline. In addition to that, a large part of oil profits is taken out of the country resulting in financial losses. It is reported that the country lost $10.9 billion in potential oil revenues just between 2009 and 2011.
The minister of state for Petroleum Resources, Ibe Kachikwu, disclosed this at a breakout session of the maiden Nigeria International Petroleum Summit. “We would get to a point where Nigeria, definitely, would be a major supplier of refined petroleum products. It just has to happen. Nothing else makes sense. We will like to see integrated refining and integrated processing here. It gives us more jobs and creates more investments,” said the minister, as quoted by the Leadership magazine.
According to the minister, Nigeria has an average in-country refining capacity of 14 per cent, adding however that this would be upgraded to between 90-95 per cent in 10 months to meet rising demands. Kachikwu said henceforth oil has to provide the resources to power the country, provide jobs for Nigerians and provide the operational environment transparent enough for others to “take Nigeria seriously”.