Renowned economist and Chief Executive Officer (CEO), Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, has disclosed that Nigeria spent a whopping $25 billion on Turn Around Maintenance (TAM) of the country’s refineries in the last 10 years (2013-2023). Rewane disclosed this at the Lagos Business School (LBS) breakfast session for May.

He spoke on a paper titled: ‘12 Months After Reforms: Breaking Out or Breaking Down,’ where he lamented that fuel scarcity and queues had become a recurring issue in the country due to non-functional refineries. He explained that fuel issues in Nigeria had been a recurring challenge since 1970s and that frequent fuel scarcity and supply disruptions continued to plague the country. According to him, the $25 billion spending on TAM for the country’s key refineries would have gone a long way if channeled into other key sectors of the economy.

Rewane pointed out that the $25 billion could have built 25 universities, 2,000 kilometers of roads, 250 healthcare centres, invested in sovereign wealth fund, and that a 10 per cent return would equal $2.5 billion. Speaking further, the renowned economist admitted that fuel prices increased 124 per cent in subsequent years and this caused transportation disruptions, increased production costs, transportation costs, increase, thereby affecting supply chains and productivity.

Similarly, Rewane stated that fuel scarcity imposed opportunity costs on individuals, businesses and governments. In addition, this also causes slower economic growth, decreased business investment, reduced consumer spending, higher prices for goods and services in the country. He said: “Fuel scarcity rearing its ugly again. Fuel scarcity and queues have been a recurring challenge since the 1970s where frequent fuel shortage and supply disruptions continued to plaque the country.”

While assessing scarcity as real or contrived, Rewane stressed that removing subsidy allowed for more efficient resource allocation, hence, there should be an efficient flow of PMS in the country. In addition, the renowned economist noted that scarcity shouldn’t have happened in the first place, adding that if there are distortions, it implies there are policy issues, structural problems that are not resolved.

However, if at all happens, it shouldn’t be for a longer period. Speaking on the future even with the presence of Dangote Refinery, Rewane said, may be, noting that PMS scarcity was a recurring problem in Nigeria’s oil and gas sector.

“The country has a history of fuel shortages and supply disruptions. Petrol scarcity may likely happen again in Nigeria in the future given the structural challenges in the country’s oil and gas industry, including inadequate refineries capacity, continuous pipeline vandalism, corruption and mismanagement,” he said.

He said a combination of factors had contributed to the prolonged scarcity problem of PMS. He also emphasised that oil and gas played a significant role in Nigeria’s economy.

“It’s a crucial sector for the country’s economic growth and stability, contribute nine per cent to Nigeria’s Gross Domestic Product, 90 per cent of Nigeria’s export value comes from oil and gas, the oil and gas industry is the backbone of Nigeria’s economy and has a dominant influence across all sectors. “However, the country has struggled to translate this resource wealth into broad-based economic development and prosperity for its citizens

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With absolutely nothing to show for it. Who did the citizens offend to deserve this type of news

yet no single drop of oil!! smh