More pain for Nigeria’s economy as FG admits loss of biggest crude buyers

The accelerating pace of the global energy transition and the impact of Russia/Ukraine is biting harder, posing a further threat to Nigeria’s oil revenue as the federal government has cried out over losing its biggest crude oil clients.

According to Farouk Ahmed, the CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the number of crude oil buyers from Nigeria had been declining, saying that Nigeria must build its oil and gas sector together to survive the changing landscape.

“As we speak, some big IOCs fund gigantic research in alternative fuels; As sweet as Nigeria’s crude is renowned for being global, we have recently lost our most valued customers, and our gas buyers are competing with us in the same marketplace as suppliers,” Ahmed said in a statement seen BusinessDay.

This development is significant for Africa’s biggest economy because India represents the largest importer of Nigeria’s crude oil, earning the sub-Saharan country about N13.9 trillion since 2015, according to data gathered by BusinessDay.

Apart from India, other biggest consumers of Nigeria’s crude oil such as Spain, Netherlands, and France are no longer considering petrol as a priority, thanks to an ambitious European Union plan to speed up the switch to zero-emission electric vehicles (EVs) as part of a broad package of measures to combat global warming.

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“All of these point to one fact; if Nigeria is to continue to benefit from its vast petroleum resources, now more than ever is the time to build sustainably into our oil and gas value chain, as well as management of its waste. And this rests on the shoulders of not only the regulators, but on all stakeholders,” Ahmed said.

While other countries are investing in life after crude oil, Africa’s largest economy is tottering on the brinks, and the situation appears not to be getting any better as lack of jobs, failing healthcare, bad roads, insecurity in various parts of the country and an epileptic power supply continues to worsen.

Last week, BusinessDay reported Angola, Libya and Algeria produced more crude oil than Nigeria in September as Africa’s largest economy saw its output dip below 1 million barrels for two months straight.

An unprepared life beyond crude oil could be catastrophic for Nigeria where more than 80 million people already live on less than $1 a day.

“Nigeria is so calm and confident when its oil wealth is facing an existential risk,” Wummi Iledare, Ghana National Petroleum Corporation’s chair of Petroleum Economics at Institute of Oil and Gas Studies, IOGS, in the University of Cape Coast, said in a phone interview.