When oil was discovered in Oloibiri, a small fishing community in Ogbia Local Government Area of Bayelsa State, in 1956, those living in the community believed that their community and personal life would witness a 360-degree turn around for good. Their joy knew no bounds as the community soon became a tourist attraction site, hosting visitors from every part of the country. Soon enough, commercial activities picked up within the community. Crude oil, the new gold, was in the bowel of their land, and they hoped, it would soon translate into money in their pockets and development of their community.
Between 1956 and 1978, Oloibiri oilfield produced over 20 million barrels of crude oil for Nigeria. Do the math to have a rough estimate of how much Nigeria would have made from selling 20 million barrels of crude oil as of that time.
However, with the closure of the Oloibiri oilfield in 1978 after crude oil dried up, residents of the community were left wondering what went wrong. In spite of the discovery of crude oil in their community and its exploration, many of them were still as poor as church rats (apologies to my Christian readers). One of them is Edwin Ofonih, a retired tax revenue collector, who was a young boy when oil was discovered in the town those years ago.
According to him, there is no remarkable difference between Oloibiri of then and now. A community inhabited by mostly Ijaw ethnic group, they still cannot boast of any development despite its historical significance in the country’s history.
The septuagenarian, who now spends most of his time working at his cassava and sugarcane farm, admitted that the massive barrels of crude oil extracted from the community did not change the fortunes of the residents for better as they continually engage themselves in petty fishing and farming, feeding and sustaining themselves with their little income.
His wrinkled face was clouded with a mournful expression as he pitifully bemoaned the sad fate of the community. His tone was sorrowful, yet effortlessly calm as he narrated how decades of neglect planted poverty and hardship on the residents.
That community is as backward and underdeveloped as any other rural community in the Niger Delta region. Even now, fishing and farming that were the main stay in that community have been negatively impacted, as oil spills and other effects of crude oil exploration has turned a larger part of the community to barren land. The people, the land, and the community have suffered for having crude oil in the bowel of their soil.
Oloibiri is not the only community that is suffering for having crude oil within its soil. Nigeria, as a nation, is gradually becoming a crime scene due to her vast reserves of oil deposits. It now has powerful cabals that have hijacked practically all aspects of the nation’s economy due to this singular resource. This week, our focus would be on the oil and gas sector, an industry that should have positively impacted on the lives of Nigerians but has only gradually and systematically become a curse to the country.
Perhaps, if Nigeria does not have crude oil, the fortunes of the country would have been better…
According to the Organisation of Petroleum Exporting Countries (OPEC), Nigeria currently has the world’s 10th largest crude oil reserves and is also the 13th largest producer of crude oil in the world. Yet, in the last three decades, the country has largely remained underdeveloped, with many of our compatriots, permanent friends with poverty. As a nation, we have been unable to refine a single drop of crude oil to refined petroleum products for the use of our people despite having four refineries. The cabals in the sector have ensured that none of the refineries work. A Nation that has the 10th largest crude oil reserve in the world has to depend on other countries for refined petroleum.
As expected, what is refined in the international markets must be paid for with foreign currency – in this case, the almighty dollar. In the last few months, Petrol has disappeared from most filling stations in the country. Why? Because the Nigerian National Petroleum Company (NNPC) Limited that is the sole importer of the commodity is in debt to the tune of $6.8 million. So, with suppliers no longer willing to take the risk of importing crude oil into the country, most filling stations are out of stock of the product. Some marketers have increased the pump price of fuel to as high as N1,500 in some parts of the country. Desperate motorists have no alternative than to buy at that rate, or higher in the black market. Expectedly, commercial bus drivers increase their fares, passing the buck to an already traumatized citizenry.
Just last week, the NNPC Ltd. adjusted the pump price of fuel from N615 to N897. Independent marketers also increase the price of their products to between N1,200 and N1,500. In spite of the increase, the product is still unavailable in most filling stations.
As if working in tandem, the day NNPC announced the price adjustment was the same day Dangote Refinery announced that it would start selling the commodity to Nigerians. But at what price? We were told by Aliko Dangote that the price would be determined by the Federal Government. When a business man tells you that, you should think deeply and know that there is something amiss.
The Federal Government has also replied that it does not fix the price of fuel but that it is determined by the law of demand and supply as well as the availability of forex. Dangote complained that the NNPC Ltd. has not lifted a single litre of petrol from its depot in spite of its availability. The NNPC Ltd. and its subsidiaries are worried that Dangote is trying to monopolize the sale of petrol in Nigeria, adding that the Port Harcourt and Warri refineries would soon come back to life, believing that it would spur healthy competition and possibly, a reduction in the price of fuel.
In the last forty years since he became a household name in the country, Dangote has never fought any serious battle in the business world as he did in getting his refinery on stream.
He stated recently that he would not have dabbled into the business if he knew that the cabal in the oil and gas industry are as powerful and entrenched as he later discovered after investing close to $20 billion into setting up of the biggest private refinery in Africa.
From getting crude oil for his refinery to insinuation that the quality of his products are below standards, Dangote has fought and is still fighting the cabal in the downstream sector of the oil and gas industry in the country. Do I pity him? The answer is No, as what is presently happening is a cabal fighting to gain the upper hand from another set of cabals for the soul of Nigeria.
The oil sector is the soul of the country, as whatever happens in that sector determines the health and well-being of Nigeria.
Since the announcement of the current price adjustment, transport fares have doubled in most city centres and most Nigerias now think twice before stepping out of their homes. Many workers are lamenting the hard realities of what they are passing through now. The new price of fuel has eroded what was gained few weeks back when the federal government negotiated a new minimum wage with the Nigeria Labour Congress (NLC). Even before the N70,000 agreed minimum wage is implemented, it has been turned into a worthless paper in the pockets of workers by the current hard realities of life in Nigeria. Labour is angry, insisting that the Tinubu administration betrayed workers. Many Nigerians can no longer afford to buy foodstuff to feed their families while crime rate has gone up in the country.
A video trended of a young man who was caught stealing a loaf of bread in the market last week. He was allowed to go after confessing to the crime and the bread retrieved from him. The situation in the country is so bad but those in government carry on as if nothing is amiss.
Between 2011 and 2020, The Nigeria Extractive Industry Transparency Initiative (NEITI) estimated that Nigeria earns $394.02 billion from the oil and gas sector. With the fact that crude oil was discovered in Oloibiri in commercial quantity as far back as 1956, you could imagine the humongous amount of revenue that would have been generated over the years from crude oil sales, even with fluctuating market values.
Now sit back and ask yourself what our dear Nation has done with such huge revenues from the sector. Infrastructure-wise, we are still far behind some African countries that doesn’t have oil. Most of our roads have become death traps. Social services such as Education and Health are in shambles.
The question begging for answers is where has all the crude oil dollars gone to? Inside the pockets of corrupt and inept leaders. We have been told on several occasions that because we have cheaper fuel in Nigeria due to subsidy payment, huge chunk on our oil found its way to neigbouring countries. Sadly, the Customs and other security agencies saddled with the protection of our land borders are complicit in smuggling of our fuel, so I’m guessing the best way government sees fit to tackle the problem is to increase the price of fuel in the country and compound the hardship on the masses. How sad!
With the billions of dollars spent on Turn Around Maintenance (TAM) on the Port Harcourt and Warri refineries in the hope that we could refine our fuel locally and get cheaper fuel for Nigerians, the Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, Mr. Taiwo Oyedele, believes that even with the resuscitation of the country’s ailing refineries, it may not deliver petrol at cheaper costs to Nigerians or alleviate the current economic hardship resulting from the recent removal of fuel subsidy.
He is of the view that even if crude oil is refined in the country, the operational inefficiencies often associated with the management of the refineries will make Nigeria’s petrol the most expensive in the world.
While our own NNPC Limited is in debt to the tune of $6.8 billion, Saudi Arabia’s state-owned oil company, Aramco, has just paid out dividends of nearly $100bn (£77bn), for the year 2023. The group, in which the Saudi government owns 82% stake, said in its annual accounts that dividends to shareholders increased by 30% to $97.8bn in 2023.
God in His Wisdom blessed us with crude oil in Nigeria, but we have, by our ineptitude, corruption, insatiable greed and mismanagement of the resource systematically turned it into a curse. It has not benefited the masses from time immemorial. Since Independence, Nigerians have never had a memorable reprieve from the blessing of crude oil and have never had it so tough and rough like the present moment. Like Oloibiri and its residents, most Nigerians have not felt the impact of being one of the biggest producers of crude oil as they continue to increasingly wallow in abject poverty.
To borrow from the local parlance, ‘It is well!’
See you next week.
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