Nigeria has been secretly exchanging its crude oil for refined petroleum products to the detriment of revenue accruing from sale of crude oil, Signal.ng is reporting.
According to the report, rather than generate revenue through the sale of its crude oil, the Nigerian government is now importing and paying for imported fuel with Nigeria’s crude oil.
While the practice of crude oil swaps for refined petrol is not entirely new, the development, which was reportedly induced by government’s efforts at closing the gaps created by the inability of oil marketers to import fuel, is said to have kept the federation account in an unprecedented deficit.
“We are in a big mess, a really big crisis. Nigeria has no money. The federal government is now officially broke. What is happening now is that our raw crude oil is now being swapped for refined petrol. So we are practically not selling our crude oil right now. We are exchanging our crude oil for refined petrol in a trade by barter arrangement. The implication is that the federation account is in deficit. There’s no money in the federation account because we are not selling our crude,” one of the sources told signal.
Speaking to an oil marketer who blamed the oil market crisis on shortage of dollars.
“It’s not viable for us, business is not working. Most of us have stopped importing fuel because we can’t get dollars to trade, and even if you want to buy dollars at black market rate, it’s not sustainable. Now the government wants to carry the responsibility on their shoulders, but what has been the result? It’s not working. The fuel queues have refused to disappear. We told them to deregulate, but they wouldn’t listen,” the oil marketer said.
But a government official quoted in the report also revealed why the removal of subsidy has not been announced by the FG
“That is why they will have no option but to deregulate. The problem now is that the Minister of State for Petroleum Ibe Kachikwu is reluctant to announce removal of subsidy, because of the fear that it can backfire with the Nigerian public considering the timing. The removal was supposed to have been announced last Friday but Kachikwu is now pushing it to the Vice President, Yemi Osinbajo who is also reluctant to make the announcement.
“President Buhari himself is off to London leaving both Kachikwu and Osinabjo to manage any untidy situation that may arise from the announcement of fuel subsidy removal,” the source was quoted.
It will be recalled that in July 2015, President Buhari dismissed calls for his government to remove fuel subsidy. President Buhari also said that the lack of security, sabotage, vandalism, corruption and mismanagement, not necessarily subsidies, are the most serious problems of Nigeria’s oil sector.
Meanwhile, a group, the Centre for Social Justice, Equity and Transparency (CESJET) has called on the Nigerian government to remove subsidies from all petroleum products.
CESJET in a statement by its executive secretary, Ikpa Isaac on Monday, May 9, said it is obvious that all strategies used to sustain petroleum subsidy is not yielding the desired result.