Nigeria's Petroleum Sector and GDP - The Missing Oil Refining Link

Uyiosa Omoregie

No 5raqk, SocArXiv from Center for Open Science

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’s GDP contribution is usually more than 30 percent. A fundamental reappraisal of the 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’.

Date: 2018-08-06
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:5raqk

DOI: 10.31219/osf.io/5raqk

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