Isaac Scientific Publishing

Journal of Advances in Economics and Finance

Nigeria’s Petroleum Sector and GDP: The Missing Oil Refining Link

Download PDF (358.4 KB) PP. 1 - 8 Pub. Date: February 1, 2019

DOI: 10.22606/jaef.2019.41001

Author(s)

  • Uyiosa Omoregie*
    Corporate Planning Department, Brass LNG, Lagos, Nigeria

Abstract

Nigeria is generally referred to as an ‘oil economy’ because of the country’s large amount of oil reserves. Yet, the petroleum sector in Nigeria currently contributes less than 10 percent of the country’s gross domestic product (GDP). In comparison, some Gulf States’ petroleum sector GDP contribution is usually more than 30 percent. A fundamental reappraisal of Nigeria’s petroleum sector’s relationship with the economy is required. This paper posits that the missing link between the petroleum sector and Nigeria’s GDP growth is the country’s petroleum refining capacity. Capacity utilization of Nigeria’s refineries dropped to 14 percent in 2014 against a global average refining capacity utilization of 90 percent. The constraints of crude oil supply to Nigeria’s refineries are revealed as well as policy interventions by the Federal Government of Nigeria aimed to increase in-country oil refining capacity. Refining capacity is suggested as an antidote to Nigeria’s so-called ‘resource curse’.

Keywords

Nigeria, petroleum, refining, GDP, economy, resource curse, Niger Delta

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