By Sonny Atumah

Economics tells us that wealth is an accumulation of goods that have economic value. It further explains that economic value has the characteristics of utility, transferability scarcity, and measurability. In a hospitalair artificially conditioned as oxygen possesses economic value because it can be scarce. When conditionedoxygen is paid for in monetary terms by patients it has a feature ofwealth.

We realised the various uses of petroleum in the 19th century. Theincreased utility of the commodity enhanced the wealth of nations that have the opportunity of possession. It is on record that petroleum can be processed into products and derivatives as many as 6000. Petroleum in Nigeriahas been handled likeunconditioned air that is freely available and without the condition of wealth attached.

Nigeria’s approach tothe uses of petroleum appears lethargicbecause the importance we attach to it has no semblance of what is wealth.A renowned British economist, John Maynard Keynes (1883 – 1946)quote on wealth is that: If Enterprise is afoot, Wealth accumulates whatever may be happening to Thrift; and if Enterprise is asleep, Wealth decays, whatever Thrift may be doing.It was like he pictured Nigeria sleep on enterprise to use petroleum for wealth.

Our concern is sharing from the till we hardly labored for. Since 1956 when Shell d’Arcy struck oil in commercial quantityin the swampy communities of Otuabagi/Otuogidi in the Oloibiri District in present day Ogbia Local Government Area of BayelsaState we have been in Joint Venture partnerships with International oil Companies, IOC that placed us in disadvantaged position which we hope the policy had a review recently. We have less than 10 percent contributions by the NNPC subsidiary, the Nigerian Petroleum Development Company, NPDC to national crude oil exploration and production.

We encourageIOCs in what they would not do for a dare in their countries; with impunity that heavens would never fall. We connive with them here and they become utterly evil. Metering facilities are made not to function to commit ritual stealing in the various crude oil exports terminals-owned by IOCs.President MuhammaduBuhari has been crisscrossing nations to recover an estimated US$150 billion of stolen oil funds by Nigerians.

The Chatham House of United Kingdom Think Tank report on Nigeria’s criminal crude in September 2013, said that Nigeria’s oil was being stolen on an industrial scale with ready buyers in West Africa, the United States, Europe and several Asian countries. It reported that Nigeria loses about US$8billion a year to theft by politicians, security forces, militants, oil industry staff, oil traders, and members of local communities, most of who have no interest in stopping it.

NEITI’s audit report submitted to the Nigerian Senate in June 2016 revealed the loss of US$9 billion in the lifting of crude oil. The loss includes under assessment, theft, inefficient practices, and US$1.7 billion still owed to the federation from the Oil Mining Leases, OMLs.Last month, the Nigerian Extractive Industry Transparency Initiative, NEITI accused the NPDC and NNPC of not remitting US$4.7 billion and N380 billion to the Federation account.

We have cultivated the easy life way to issues of refining to generate funds. It is embarrassingly unimaginable that today we sell crude oil for an average of US$350 a ton and buy back refined imported products and derivatives from that quantity for as much as US$3000.  With low price for crude, Nigeria sold crude, refused to refine, devalued her currency, import refined products at exorbitant prices and impoverished her citizens.

Indeed our thinking has made it that importation of petroleum products from non-producing consumer nations is the best. It was victory shoutsfrom the people that the 2016 Yuletide travels were stress free. They got the elusive gasoline or PMScalled for celebration even as the stagflation bites harder. To our petroleum managers it was eureka! People travelled without difficulty in getting fuel at suffocating rates. Our local airlines and other international airlines were going to Ghana to refuel. That is the unfortunate story we hear from our land.

Our petroleum has been like a stream flowing for income and not like a lake that accumulates wealth. Crude oil had indeed been viewed as a working capital which we sell to generate dollars to import products. With the little generated foreign exchange liquidity from crude exports we fund imported petroleum products. From the Central Bank of Nigeria’s second quarter, Q2, 2016 report, the Federal Government spent US$6.09 billion on petroleum imports in the first six months thus putting pressures on Nigeria’s foreign reserves.  By estimating the value that falls outside that range or extrapolation the national oil company would have spent over US$12 billion importing petroleum products in 2016.

The monthly NNPC Group Financial Report for October 2016 showed that the national oil company posted zero revenue in the review month, incurred an expense of N14.84billion and recorded a total deficit of N14.84billion. The deficit for the 10-month period beginning from January 2016 was put at N161.76billion. From this Report and with the production cut from OPEC and non-OPEC members to shore up crude prices, the signs are already there that imported petroleum products would go up in 2017.

We have the petroleum market in Nigeria and West Africa but without the product. Nigeria in dire straits needed a flag waver in perennial products scarcity in this land of plenty crude. We supply countries crude oil and buy petroleum products from them exorbitantly. A great paradox! Let us benefit from refining locally and stop being foreign refiners’ representatives.

The same old story one preached to successive administrations to invest in refineries and petrochemicals is what one is reminding President MuhammaduBuhari again.One hopes the President we believed had the ability is also not lacking in the will. Developed and emerging nations never looked for the easy way out. They sought for lasting solutions to complex problems. Ours is to contemplate selling refineries to generate income for recurrent expenditures.

The Minister of State for Petroleum Dr. IbeKachikwuin October 2016 sought the assistance of India to lend Nigeria US$15 billion for long term crude oil contract.As net petroleum importer India has two national oil companies with 19 out of its 23 refineries owned and run by Government. India maintains its share in global oil business and is a member of the BRICS (Brasil, Russia, India, China and South Africa).  They have state owned enterprises, SOE created by government to undertake commercial activities including refineries and petrochemicals.

We have had over 20 years ofthe gullible must accept the gospel from the fallible that petroleum products importation was the ultimate.The mentality that we must import petroleum products from Spain or other north western European countries that buy crude oil from Nigeriais retrogressive and has no place in wealth accumulation.