The Economist: Nigeria Missing Out On Rare Global Oil Boom Opportunity

Says the bad economy is a factor in the rise in violence

Explains N4bn weird Tompolo contract

•Senate directs military and security officials to prosecute alleged oil thieves

•Falana: I have proof the government is aware of people responsible for crude oil theft and smuggling

•Obi calculates that N1.3 trillion worth of crude oil was taken

Sunday Aborisade, Emameh Gabriel, and Emmanuel Addeh in Abuja

According to the London-based The Economist, Nigeria has continued to squander the potential to build its economy like other oil-producing nations that has been provided by the unusual spike in global oil prices.

While a spike in oil prices might result in amazing developments, such as the anticipated construction of a futuristic metropolis in Saudi Arabia or the unexpected strength of Angola’s currency against the dollar, it was noticed that in Nigeria, the situation was the opposite.

The report was released shortly after yesterday’s request by the Senate’s leadership that the nation’s military and security services begin pursuing anyone who are thought to be engaged in oil theft.

The National Assembly’s upper house also gave the judiciary the job of expediting hearings in cases involving oil theft and other types of economic sabotage.

Just yesterday, Nigerian lawyer and human rights advocate Mr. Femi Falana said that he had proof that members of the administration were responsible for crude oil theft and the importation of petroleum products illegally.

The Labour Party presidential candidate, Mr. Peter Obi, also commented on the issue that is largely to blame for the nation’s economic problems. Yesterday, he said that if elected president the following year, he would not point the finger at the previous administration for the country’s failure but would instead concentrate on fixing the economy. Mr. Obi claimed that the country had lost trillions of naira’s worth of crude oil.

The Economist emphasized that exporters in the Middle East and Central Asia might earn $320 billion more in oil profits this year than anticipated, but noted that Nigeria has been noticeably missing from the joyous petro-party.

“With a 220 million population, Africa’s most populous nation urgently needs the money an oil boom may provide. About 40% of its population survives on less than $1.90 per day.

“The government is having difficulty paying its obligations. The social services are terrible. The country’s widespread violence is a result of the dire economic situation. Nearly 6,000 people were slain by terrorists, kidnappers, bandits, or the army in the first half of this year, according to the newspaper.

The news source said that whereas drivers everywhere pay more at the pump when the price of petroleum increases, this is not the case in Nigeria, and that price restrictions remain the key factor destroying the public purse as a result of the boom.

President Muhammadu Buhari broke his most recent vow to overhaul the system in January, leaving the government to cover the significant difference between Nigeria’s low fixed price and the international standard.

The government-owned Nigerian National Petroleum Company is responsible for the subsidies, according to the report, which said that “the outlook is dismal.”

The news outlet noted that the World Bank predicted in June that the government would spend N5.4 trillion ($12.6 billion) or more on fuel subsidies this year, more than three times what it did the previous year. This is more than the increase in revenue the government will receive from higher crude oil prices, the news outlet claimed.

“As a consequence, despite the high worldwide price, Nigeria’s net oil revenues are anticipated to be around 40% lower than last year. Everything else is confined by it. The government gave more money to the gasoline subsidy in this year’s modified budget than it did to welfare, health care, and education combined.

“Price-fixing causes further harm. Nigerians consume more gasoline because it is intentionally priced low. According to data from NNPC, daily fuel use increased from 58 million liters in 2021 to around 70 million this year.

It said that the fact that output itself had fallen to 1.13 million barrels per day, the lowest in more than 50 years, and that the oil business had also been a drag on overall economic development, was another reason Nigeria’s public finances benefited so little from high oil prices.

“One factor contributing to the decline in output is that the NNPC struggles to meet production expenses for producing crude oil since it is so strapped for cash after paying for gasoline subsidies. Another is that a significant amount of oil is never included in Nigeria’s production since it has been stolen, it was emphasized.

Although figures vary, it cited the regulator of the oil sector as saying that criminals are stealing 108,000 barrels per day, or around 7% of output. It claimed that this cost the government $1 billion only in the first three months of this year.

The flow of the Trans Niger pipeline, which can move 180,000 barrels per day (about 16% of the nation’s current output), has been stopped since June due to theft.

“Another significant pipeline, which transports 150,000 barrels per day, has also been assaulted often. The large oil company Shell has been unable to fulfill its contractual responsibilities since declaring force majeure on all of its shipments of high-quality crude Bonny light in March, according to The Economist.

The study claims that one method of stealing the product included packing genuine shipments with more oil than is disclosed. Another method, according to the paper, was to breach into pipes and siphon oil out, then refine it in remote locations before selling.

It was reported that tiny boats cruise through the delta’s canals, filling up from illegally tapped pipelines, and that plenty of stolen petroleum flows directly into the world market.

“They transport it to floating oil rigs or offshore tankers. Sometimes legitimate petroleum is blended with stolen crude before being sold to unaware customers. But a lot of it is purchased by merchants who deny knowing it’s stolen or don’t give a damn, it said.

“Buhari pledged to clamp down. The NNPC’s first action was to engage private security companies to guard the pipelines, which is a damning indictment of the army. However, the issue is not likely to be resolved.

Government Ekpemupolo, also known as Tompolo, a former warlord, is a partial owner of two of the companies. Before agreeing to a deal where he would cease blowing up the pipelines in return for an amnesty—and for lucrative security contracts—he led a guerilla campaign in the 2000s to give the people ownership of the oil in the delta.

“That has collapsed under Buhari’s administration, which issued an arrest order for him in 2016. Tompolo is now an odd combination of a government contractor and a wanted man, according to Nigeria’s anti-corruption agency, who claims he has made $105 million via corruption. He claims innocence,” the newspaper said.

Senate Orders Military, Security Chiefs to Charge Suspected Oil Thieves

In the meanwhile, the Senate’s top officials yesterday demanded that the nation’s military and security authorities begin prosecuting anybody who are thought to be engaged in oil theft.

The National Assembly’s upper house also gave the judiciary the job of expediting hearings in cases involving oil theft and other types of economic sabotage.

This was said by the Senate’s president, Ahmad Lawan, during statements he delivered before a secret session of the red chamber’s top officials, as well as the military and security authorities, to examine the nation’s progress in the battle against instability.

According to a new report released on Monday by Mr. Bismarck Rewane, the Chief Executive Officer of Financial Derivatives Company Limited (FDC) and a member of President Muhammadu Buhari’s Economic Advisory Council, estimates for the entire year would exceed the total expenditure by all the states of the federation in 2021, which was $9.8 billion.

The Nigerian National Petroleum Company Limited (NNPCL) also disclosed that crude oil theft was adversely affecting its performance at the time the report was released. At addition to security issues that impede oil output in certain ports, NNPCL revealed that it lost 470,000 barrels of crude oil per day, or nearly $700 million per month.

Bala Wunti, Group General Manager at National Petroleum Investment Management Services (NAPMS), revealed this information to press in Abuja.

The meeting with the Senate was a continuation of a related one that Lawan presided over earlier in August.

Ovie Omo-Agege, the Deputy Senate President, as well as other top senatorial officials and the chairs of the Senate’s committees on security attended.

The three Service Chiefs, the Inspector General of Police, the Directors-General of the National Intelligence Agency (NIA), and the State Security Service were also present (SSS).

Others included the Commandant General of the National Security and Civic Defense Corps, while the Immigration Service was represented by the Acting Comptroller General.

Lawan bemoaned the widespread theft of the country’s crude oil and stressed that the phenomenon must be stopped while the offenders must be swiftly apprehended and brought to justice.

“I’m sure some of them may not be so fortunate to escape,” he continued, referring to those who had made every attempt to steal our oil on a large scale.

“We want to see the trials of those who are found guilty because then the public will understand that no one, no matter how inebriated, can get away with engaging in these kind of illegal activity.

“Of course, I’ll make an appeal to our courts; the judiciary; when we have situations like this, we need to act quickly because these are the problems that, as of right now, are working against our stability and even against our democracy.

We waste a lot of our oil. According to the latest estimate, we exported slightly more than 900,000 barrels. And because there should be 1.8 million barrels per day, it represents a reduction of our income and resources for development by nearly half.

So I’m asking the courts to give a suspect in an oil theft additional attention when they bring him or her before the court. We have to charge them. Taking away what they have taken and telling them to stop sinning is insufficient.

The purpose of the conference, according to Lawan, was to discuss the previous one that was convened at the beginning of August to examine the nation’s security condition.

He expressed happiness at the dramatic improvement in the nation’s security after the meeting with the security and military officials in August.

“Distinguished Senators and indeed, members of the National Assembly expressed so much concern about the security situation that prevails, and we felt we must engage our security agencies so that together, we will continue to fight these challenges in our country,” he said. “Before we closed for our annual summer recess, Distinguished Senators and indeed, members of the National Assembly.

“I am pleased, and I’m certain that I speak for my colleagues, when I say that since that meeting, our Armed Forces and other security agencies have made a notable impact in the battle against instability in our nation, and we are extremely proud of that.

We hope this will continue since we have observed the initiative and it is up to us to complete the task. I’m confident that when the President said making sure that everything are back to normal by December 2022, he had what you have lately been doing in mind.

“Even if we still need to provide some additional help, I think you, our Armed Forces, and other security services have what you need in terms of morality and tenacity. The purpose of this meeting is to assess what has occurred thus far.

We sometimes arrest outlaws alive while battling the nation’s security issues.

Lawan also requested that the parliamentarians be given privacy during the closed-door meeting with the security chiefs.

“We are accountable individuals. We are aware of certain delicate issues, but we can handle others better when we are on the same page, preventing us from passing laws while illiterate or without the proper context.

“I believe we should regard it as a priority as well when there are demands or needs to strengthen the capacity and competency for Armed Forces and other security services,” the Senate President added.

Falana: I Have Proof The Government Is Aware Of Those Responsible For Crude Oil Theft And Smuggling

Falana has said that he has proof that members of the administration were engaged in stealing crude oil and smuggling petroleum products into the nation.

At the same time, he was threatening to reveal the politicians responsible for the cartel that was bunkering and smuggling crude oil.

At a two-day leadership retreat the Labour Party organized in Abuja with organized labor, industry leaders, and other stakeholders from the public and private sectors, Falana made the revelation yesterday.

The government cannot pretend to be unaware of the names of criminals operating in the upstream and downstream sectors of the nation, according to Falana, who spoke at the event titled “Nigeria at Crossroad; Labour Party the Only Option.” He added that until this issue was resolved, common Nigerians would continue to be at the mercy of a small number of criminals.

The government is considering raising the price of petrol to N500, he said. I want to openly state that roughly seven years ago, the government forked out a staggering N50 billion to purchase software developed by the Petroleum Equalization Fund to track and monitor all gasoline trucks that fill the nation’s roadways.

“Today, you are being told that Nigerians should be punished due to the criminal behavior of a select minority. that due to the criminal conduct of a few, the government would punish the whole.

The Comptroller General of Customs has recently stated publicly that it is impossible to smuggle approximately 10 million liters of fuel daily. What place did they pass?

“Nigeria is the only nation whose government will publicly acknowledge that oil theft costs the nation $7 million per day. Nigeria is the only oil-producing country lacking statistics on its daily oil production.

350 tankers loaded with 36,000 liters of gasoline. Yes, this is indeed what is happening, according to the NNPC. Who are the thieves of oil? They are acquainted. Falana said that oil theft and oil cuddling both have official partners.

The federal government has access to an organization called Lloyd, he said, which maintains records of all oil transactions worldwide. “Yet we are claiming we don’t know who is taking our oil or where the oil is being carried to?

“So the government is aware, and if they need information, we can provide it to them. If they are certain they want to know who is taking from us and ruining our nation.

“The government announced that it will spend N453 billion on gasoline subsidies in the 2023 budget. The budget was expanded to N4 trillion by the president’s June presentation of a supplemental budget to the National Assembly. The National Assembly approved it without debating.

“Now, the Minister of Finance claims that amount would rise to N6.5 trillion and that there won’t be any funding for major projects in the budget for the next year.

“I challenge the Nigerian Labour Congress, TUC, and others to permanently address the core causes of this illegality. We’ll make a choice today. A committee will be established. I have all the necessary information to name and shame everyone involved in oil theft and fuel smuggling.

When elected president the following year, Obi said he would put the blame for the failure of the previous administration on himself and concentrate on improving the nation’s economy.

Obi, who was greeted at the event by the founding members of the Labour Party, including its National Chairman, Julius Abure, the leadership of the NLC, led by its President, Ayuba Waba, the Chairman of the Trade Union Congress (TUC), Prof. Pat Utomi, Sam Amadi, and Doyin Okupe, as well as other dignitaries and party leaders from all 36 states of the federation and the FCT, stated that his task was to solve problems

He said that his goal in entering politics was not to exact revenge on former officials but rather to solve the problems plaguing the country’s economy.

My job here is to listen and make notes, Obi stated. If Labour makes the effort to back someone to lead this nation and it fails, it would be disheartening and a serious threat to Nigeria’s survival. Please, no.

“I want to listen for myself. I want to remember this. I value that note since I don’t want to provide justifications. I don’t want to jump in and start criticizing previous authorities.

“They wouldn’t have needed to recruit me if they had performed better. I was hired to solve problems, not to serve as a cultural ambassador for Nigeria.

“ASUU has been on strike for seven months by the time you start to wonder what is wrong with Nigeria. ASUU is requesting a contract that was signed in 2009, while I was the governor of Anambra State. The sum sought by ASUU is N1.3 trillion. Are we claiming that it will take Nigeria 12 years to raise N1.3 trillion to fund education?

“Today, our oil is being stolen. A ship must have permission from the Navy to enter Nigerian seas in order to steal oil. Who authorizes the ship’s approach and who is taking the oil? This questionable business involves N1.3 trillion.

Nigeria is the only member of OPEC that is not meeting its quota, aside from Venezuela, which is subject to sanctions. In fact, other nations demand that we produce more.

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  1. •Falana: I have proof the government is aware of people responsible for crude oil theft and smuggling

    •Obi calculates that N1.3 trillion worth of crude oil was taken.

    Then do something or u have recovered it to your personal account

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