The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has blamed the continued decline of the naira against global other currency on the huge demand for foreign exchange (FOREX) necessitated by the importation of petroleum product into the country.
According to the minister, between 30 to 40 per cent of FOREX demand was from the sector.
He noted that the nation’s dependence on importation of petroleum product due to failure of local refineries to function which according to him was caused by the activities vandals.
The minister, who delivered a keynote address and lead paper at the 2016 National Association of Energy Correspondents Forum in Lagos yesterday expressed fears that the country’s budget for the 2016 financial may not be realized.
According to him between January and June 2016 over 1,600 incidents of vandalism was recorded resulting in a loss of 109 million litres of petroleum products and 560,000 barrels of crude oil to refineries.
”An additional 1.1 million barrels of oil per day is required to be produced between now and year end to meet targeted annual production, he stated.
He stated that compared to the 2.2 million barrels per day targeted in the budget the country currently produces 1.56 per day resulting in a shortfall of 700,000 barrels per day translating to 29 per cent fall.”
He disclosed that for the desired diversification the nation’s economic programme to be successful, the government would still have to depend on the petroleum sector to provide the required funds.
Speaking further on the sector’s performance in recent time, the minister stated that the industry was challenged by $6 billion Cash Call indebtedness accumulated over the last 5 years. He noted that because of the dwindling finances at the disposal of government, it has been unable to meet its part of Cash Call requirement leading to inadequate financing in the industry.
He added that no investment has occurred in the sector in the last 5 years.
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