Despite being Africa’s top crude oil producer, Nigeria receives just 5% of the income from its crude oil exports, according to Professor Kayode Soremekun, a political scientist from the University of Lagos. Speaking at a symposium on Nigeria’s petroleum industry held in Abuja, Prof. Soremekun highlighted that several valuable components of Nigerian crude are not accounted for in the national revenue after export.
The event, themed “Nigerian Petroleum Industry: The Way Forward”, was organised by Class Masters Ltd in collaboration with the Nigerian National Petroleum Company Limited (NNPCL).
Nigeria’s Revenue Loss
The NNPCL operates a Direct Sale Direct Purchase (DSDP) programme, which trades Nigeria’s crude oil for refined products like petrol. However, components of crude such as paraffins, aromatics, and sulfur compounds remain with refining countries, contributing to significant revenue loss for Nigeria. Prof. Soremekun noted, “The smallest tanker of crude oil leaving Nigeria, when fully refined, could pay six months of senior staff salaries.”
A Need for Change
Prof. Soremekun urged Nigeria to adopt successful oil management models used in countries like Norway and Malaysia. He stressed the need for Nigeria to explore all three stages of the oil sector upstream, midstream, and downstream rather than focusing only on crude extraction.
Call to Action
Paddy Ezeala, Managing Director of Class Masters Ltd, called for urgent reforms in light of global energy transitions. “The symposium aims to chart a way forward for the oil industry amidst social, economic, and environmental challenges,” he said.
The discussions underscored the importance of addressing environmental degradation, insecurity, and low production levels, which hinder Nigeria from meeting its OPEC quota.
The event shed light on Nigeria’s need to maximise its oil resources, minimise waste, and address systemic inefficiencies to secure a sustainable economic future.