Nigeria’s oil and gas sector continues to play a vital role in the nation’s economy, with crude oil by-products contributing substantially to revenue and industrial development.
The Nigerian National Petroleum Comission Limited (NNPCL) reported that the country produces an average of 1.3 million barrels of crude oil per day, yielding various valuable by-products, including refined petroleum products, liquefied petroleum gas (LPG), fuel oil, petrochemicals, and lubricants.
“Crude oil by-products are critical to Nigeria’s economic growth,” said Mele Kyari, NNPC Managing Director. “We’re committed to optimising production and utilisation.”
Refined petroleum products account for 40% of crude oil production, with gasoline, diesel, kerosene, and aviation fuel being the primary components. LPG, which is used for cooking, industrial applications, transportation, and power generation, constitutes 10% of production.
Fuel oil, utilised for power generation, industrial applications, and marine transportation, makes up 15% of production. Meanwhile, petrochemicals, essential for plastic manufacturing, fertiliser production, and pharmaceuticals, account for 5%. Lubricants, used in the automotive, industrial machinery, and aerospace industries, comprise an additional 5%.
The production and utilisation of crude oil bi-products contribute significantly to Nigeria’s economy, generating approximately 70% of the country’s export earnings and employing over 100,000 Nigerians directly and indirectly. This sector also drives growth in manufacturing, construction, and agriculture.
However, challenges persist, including limited refining capacity, which forces the country to rely on imports, inadequate storage and transportation infrastructure, and over-reliance on crude oil revenue.
Experts advocate for investing in refining capacity which has been boosted by the Dangote Refinery, infrastructure development, and diversification to address these challenges. “Optimising crude oil byproducts is crucial to Nigeria’s economic future,” said Dr. Bala Zakka, Energy Analyst.