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Oil refining’s GDP contribution drops by 47.94% in one year—NBS

The oil refining sub-sector’s contribution to the nation’s Gross Domestic Product recorded a decline from N37.07bn in 2020 to N19.3bn in 2021, according to the National Bureau of Statistics.

It declined by N17.77bn or 47.94 per cent within a one-year period.

In the first quarter of 2020, the real GDP contribution was N6.93bn but it dropped to N2.97bn by the first quarter of 2021.

Also, a quarter by quarter analysis showed that the value dropped from N9.16bn in the second quarter of 2020 to N4.88bn in the second quarter of 2021.

The decline continued in the third quarter from N8.04bn in 2020 to N4.2bn in 2021, and in the fourth quarter from N12.93bn in 2020 to N7.25bn in 2021.

The oil refining sector is a subsector under the manufacturing sector, which experts have said continued to face massive setbacks.

A survey by Platts, a provider of energy and commodities information and a source of benchmark price assessments in the physical commodity markets, showed that Nigeria’s oil output continued to be constrained by operational setbacks, with key pipelines facing persistent sabotage.

Earlier this year, the Federal Government said it was working to establish three modular refineries in each of the oil-producing states, particularly in the Niger Delta region.

Going by the plan, the government would have to establish about 18 refineries in the country’s six major oil-producing states in the Niger Delta including Rivers, Bayelsa, Akwa Ibom, Delta, Edo, and Cross River.

It said the objective was to halt the illegal artisanal refining activities going on in oil-producing areas and their impact on residents in the affected locations.

The Minister of State for Environment, Chief Sharon Ikeazor, disclosed this in a statement issued by her ministry in January 2022.

However, it was later reported in the same month that Nigeria’s bid to bolster its local crude refining capacity through the construction of modular refineries ran into a hitch due to a number of factors, including funding challenges and rising cases of sabotage attacks on pipelines and oil theft.

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