How To Curb Rising Crude Oil Theft, By Ita Enang
By TAYO ELEGBEDE
The presidential aide on Niger Delta Affairs, Senator Ita Enang has suggested that the integration of illegal artisan refiners into the mainstream oil value chain will curb crude oil theft, which has robbed the nation about $49.1 billion between 2009 and 2018.
Nigeria Extractive Industries Transparency Initiative (NEITI) in its report titled “Stemming the increasing cost of oil theft in Nigeria’ noted that crude oil and refined products worth $41.9 billion have been stolen in the past 10 years.
Against this backdrop, was the Federal Government’s resolution to draw a policy that would legalise artisanal refineries in the country.
According to Enang at a News Agency of Nigeria (NAN) Forum in Abuja, his office has over a period of time engaged some artisanal (illegal) oil refiners in the Niger Delta region and had seen the need to legalise their operations.
Enang, at the forum, noted how some of the artisanal refiners can produce chains of petroleum products to supply for consumption in the country, even if not for export.
The government, he said wants to initiate programs that will encourage local refining of the product in order to make it available in the country, adding that when successful, petrol might sell between N80 and N90 per liter in the country.
He expatiated that apart from saving cost and the recent removal of fuel subsidy, the nation cannot continue to rely solely on the importation of petroleum products.
The move to legalise artisan refiners was partly due to the revelations and recommendations made by bodies like NEITI, and the New Nigeria Foundation on crude oil theft in the country
The NEITI report states that about $38.5 billion was lost to crude theft alone for which it blamed the government for the loss owing to its failure to adhere to recommendations like oil fingerprinting technology, absence of comprehensive metering infrastructure of all oil facilities, exploring other means of crude oil transportation, among others.
Advising on arresting oil theft, an Oil and Energy Consultant, Charles Majomi, opined that is was a welcomed idea only if the implementation of such policy would be complete and holistic.
According to him, the idea of integrating the host communities where most of these theft happens into the crude oil value chain has become more important at this point of dwindling oil reserves.
Majomi, who told InsideBusiness that the move would also serve as a deterrent since the product used by the illegal refineries were derived without payment, so the feedstock which is the crude was for free and obviously the profit margin is large.
This he said might stop the illegal act as he urges a strategic roadmap that integrates all the key players and stakeholders in the industry or else the theft activities would rather increase.
He remarked that for these refiners to be transitioned into the mainstream space, they have to be brought out of the shadows with a holistic approach like incentivising the process and also engaging local community leaders.
“The reality is you have to incentivise people to transit from illegal activity into a legal space and that would be achieved by all the stakeholders coming together to do it correctly because the profit margin temptation in the illegal refining space would always be superior and pose a serious challenge to the viability of the process.
The incentives are easing security pressure in addition to sufficient economic benefits.
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