The Federal Government may have lost over N3.8 trillion to shortfall in oil production due to militants' attacks and oil theft last year in the Niger Delta.
Specifically, Nigeria is said to have lost about 700,000 barrels daily throughout last year, for which at the oil price of $50 per barrel, the country would have lost $35 million (N10.6 billion) daily, amounting to N3.8 trillion.
Notwithstanding that it has constantly denied any plans to increase the pump price of petroleum products, the government however noted that such increases may become inevitable as the prices of crude rise at the international oil market which is currently above $54/barrel.
Besides, it is feared that Nigeria's 36 billion crude oil reserves could dry up in the next 40 years if there is no reserve addition and its gas in 65 years, if there are no deliberate efforts to increase the current reserves of 187 trillion cubic feet of gas.
The Minister of State for Petroleum Resources, Dr. Ibe Kachnikwu, who made this disclosure at the Rainoil 20th anniversary lecture yesterday, in Lagos, noted that the revenue lost to vandalism last year could fund 30 per cent of Nigeria's 2017 budget.
He added that the present administration has been able to restore peace in the Niger Delta.The minister, who was represented by the Chief Operating Officer, Downstream, Nigerian National Petroleum Corporation, (NNPC), Henry Ikem-Obih, spoke on, "The Nigerian Oil and Gas Industry, Opportunities, Challenges and Prospects of the Downstream Sector."
With regard to refined petroleum products, he noted that due to the rising cost of Premium Motor Spirit (PMS), also known as petrol, a number of oil marketers stopped importing the commodity, leaving the NNPC as the major importer of majority of the products.
He said: "The environment has since changed. When we did all these, pricing for crude was $25 to $30 per barrel; today, it is in excess of $54, which is fantastic because it means that our revenue stream is improving."
He said that products theft and vandalism have continued to destroy value and put NNPC at a disadvantaged competitive position, as a total of 2,620 vandalised points were recorded between January 2016 and January 2017
Former Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPRA), Reginald Stanley, urged the Federal Government to concentrate on making and implementing favourable policies for the downstream sector.
He said there is a need for the Federal Government to ensure its oil and gas policies bring lasting peace in the Niger Delta to enable the country sustain production, while also allowing the private sector to drive the downstream industry.
The Group Managing Director of Rain Oil Limited, Gabriel Ogbechie, said significant changes are needed for the survival of investors in the downstream sector.