Nigeria’s energy conundrum, implications and solutions

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Quite unfortunately, the creation of separate ministries, as well as privatisation and commercialisation of petroleum products and electricity, have not been able to resolve the conundrum in the energy sector in Nigeria.

Many compatriots who believed that the passage of Petroleum Industry Bill by the National Assembly is the silver bullet needed to unbundle the latent potentials in the petroleum sector have been very disappointed because after the signing of that bill into law by the President, Major General Muhammadu Buhari , on Monday, August 16, 2021, there has not been the political will to follow through with faithful implementation.

It is very disheartening that despite the purported N4 trillion earmarked for petrol subsidy in the 2022 Federal Government budget, fuel shortage has been the new normal in Abuja and many states in the country since January 2022. On the flip side, proponents of subsidy, such as the various workers’ unions will claim that the prices of unsubsidised petroleum products such as diesel, aviation fuel, kerosene and cooking gas, have become very astronomic and unaffordable.

Truth be told, despite the argument that prices of petroleum products skyrocketed due to the lingering war between Russia and Ukraine, I am of the considered view that Nigeria is worst affected due to our inability to locally refine our crude oil. It is disheartening and heartrending that despite billions of dollars spent on turnaround maintenance of the country’s refineries in Port Harcourt, Warri and Kaduna, none of them is working at present. Additional $1.

The other prospect Nigerians are eagerly awaiting is for the 650,000 barrels per day Dangote refinery to come on stream latest by the first quarter of 2023. Interesting news broke recently that the Nigeria National Petroleum Company on behalf of the Federal Government of Nigeria is planning to pay $2.76bn to acquire 20 per cent equity in Dangote Oil. $1bn out of the agreed sum was paid by NNPC last week.

There’s no shortcut to the top of the palm tree, it’s the way you climb up that you’ll come down so says a Yoruba proverb. Without full deregulation of Nigeria’s energy sector, by that I mean the petroleum and electricity , the Nigerian economy will continue to be badly and negatively impacted. Yes, prices of these commodities are astronomic now largely because of the war in Ukraine and the fact that we have to import these essential products.

 

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