Economy, local currency policy and petroleum self-sufficiency (2)

There have been, in the recent past, arguments over the actual volume of domestic daily aggregate demand of petrol (or premium motor spirit – PMS) within the economy. The varying figures officials in charge in the downstream have quoted during the periods of these debates, ranged from 38.2 million litres to 66 million litres. Suddenly, at some point, the figure of about 103 million emerged! This is just by the way because, a lot had happened in the past about the petroleum subsidy policy regime on refined products imports (which gulped a very significant chunk of the country’s foreign exchange earnings). The major concern lies in the efforts and economic dynamics to be professionally deployed within the economy (with the tools of backward integration, especially in the nation’s oil industry). Retooling such dynamics through experienced and dedicated experts in the economy will have a very positive economic effect that could lead to strengthening the value of the local currency, the naira.

Even with the current economic world view on the hydrocarbon business, and recent developments around the global energy market with much emphasis on energy transition from fossil fuel sources to renewable energy sources, the oil business in Africa (a continent with more concentration of the world’s poorer nations) still has a chance to keep exploiting its fossil fuel deposits. Africa can still continue to produce/extract crude oil, refine and consume for powering economic activities through its utilisation on all industrial and domestic machinery, including petrol driven vehicles till around 2070.

Following up on the agreed measures to mitigate the impact of global warming through application that encourages green concepts in all aspects of human activities, brings us to a newly developing energy utilisation proposal that supports the United Nations’ Climate Change actions. This is, however, from another technological dimension that favours continued utilisation of fossil fuel sourced energy, through a strategy known as “maximum energy, minimum emissions” proposed by Sheik Al Jaber, the president of Abu Dhabi National Oil Company (ADNOC). It is an innovative concept that  strategically supports the utilisation of fossil fuels in the hydrocarbon business value-chain till around 2070 when every country might have gradually exited all known businesses in fossil fuels. This elegant innovative carbon balancing process favours the poorer nations that are naturally endowed with petroleum (oil and gas) deposits by assuring and retaining crude oil extractive, production and consumption businesses that relate to hydrocarbons, but remain prudently compliant with the global warming mitigation measures.

The maximum energy, minimum emissions strategy for carbon balancing works by constantly taking out the same quantity or equal amount of carbon/greenhouse gases (GHGs) generated through human activities, which are consequently emitted into the atmosphere. One believes very strongly that multilateral associations in the oil and gas industry, like the Organisation of Petroleum Exporting Countries (OPEC), even the known national oil companies (NOCs), like GAZPROM, Saudi Aramco, and Nigeria’s NNPCL, should borrow a leaf on this innovative research approach from ADNOC by a further research and development (R&D) push on this. All in the effort to still make fossil fuels remain sustainably relevant in the schemes of the global energy value-chains.

The Dangote Group, with its refinery complex, remains a trailblazer in the nation’s oil industry, with specific reference to local refining of crude oil, since the nation derailed in that regard many decades ago, and was caught in the web of the notoriously operated petroleum subsidy policy that has sucked the national treasury white (through undisclosed and unaccounted financial activities that went on under such policy). The moribund government owned refineries being presently refurbished and all the officially approved indigenous modular plants within the economy should now wake up! These are the only sure strategic measures that can contribute towards reviving the nation’s ailing economy. In addition to making the economy an export oriented and productive one, solidly backed through diversification of non-oil export portfolio, from all other economic sub-sectors.

This strategic action plan for multiple export portfolios must include professional services, not just tangible products, for the international markets. One strongly believes that by all the above steps, the local currency (the naira) will automatically gain full revival traction in the foreign exchange market and bring the financial status of the nation’s economy back on the expected economic efficiency pedestal.

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