Paradoxes of Nigeria’s crude oil and fuel sector

By Dele Sobowale

“How wonderful that we have met with a paradox. Now we have some hope of making progress” – Niels Bohr, 1885-11962

Bohr, a Danish Nobel Prize Winner in Physics was one of the leaders in unraveling the mysteries of quantum theory. Along the line, he discovered that atoms don’t act in predictable ways. Societies and human beings are also full of contradictions. 

The loudest advocates for equality, freedom and justice in America were – Washington, Jefferson, Madison, Lincoln (1809-1863) — were all slave owners. That was one of the historical proofs that paradoxes and progress can co-exist in any nation.

  When the history of Nigeria’ s experience is written decades after crude oil will no longer define our national life, the most obvious revelations will include the paradoxes which have characterized our country. Incidentally, Nigeria was a Middle Income economy in 1960 and remained so until a very brief period – 1973 to 1983. 

The number of PhD holders at the time could not have been up to 250. Today, they number over 200,000. Why then is the country now a low Income economy and the poverty capital of the world?

    The slide down the slippery slope into multi-dimensional poverty began in 1984; since then, Nigeria has remained the only oil-producing nation which had been ruined, incurably, by crude oil production. It is the only oil-producing nation which is classified as poor and the only one which has created a few billionaires while millions of its citizens sink deeper into poverty daily. 

The new mantra? Among the political leaders is Renewed Hope; among the vast majority of the populace hopelessness is pervasive. The contrast cannot be more striking; upbeat leaders and downbeat followers; two national armies marching to different beats.

“I am beginning to wonder how many fools it takes to make the term ‘My Fellow Citizens.’   Honore De Balzac,1799- 1850, in Lost Illusions.

  The descent into pervasive abject poverty became apparent in 2018; yet, My Fellow Citizens, went to the polls in 2019 and re-elected the government which dumped them in the depths of abject poverty. That was astonishing enough for stupidity. In 2023, after it was clear that the ruling party had accelerated the plunge into poverty, they went and elected the same political party! Some of the leaders of that collective self-destruction met in Kaduna recently to query the government they imposed on Nigeria with their votes. 

Some of the participants are/were professors; who absent-mindedly got Nigeria where we are today. Of what use were all those doctorate degrees; if we are led by highly educated people who cannot think properly? The few academics, with doctorate degrees in the 1960s provided better brain-power to run the government than the legion we parade today. Paradoxically, three Senate Presidents since the Second Republic were PhD holders; names withheld to save the living from embarrassment.

One was there when Buhari raided the Central Bank of Nigeria for N30 trillion unapproved Ways and Means and still is not remorseful. Right now, we have a major existential paradox on our hands – which exemplifies why Nigeria will not move forward any time soon.

Our present predicament

“Nigeria imports N1.2tn crude as local output stumbles.” News Report, July 2025.

The story went further to inform readers that “Overall, Nigeria’s total import stood at N15.43tn in Q1 2025…”

Take a minute to wrap your mind around that message. Nigeria, one of the largest producers of crude oil, has imported crude worth more than half of the 2025 Budget before review. The importer is mostly Dangote Refinery – which we were told for years would source its crude from Nigeria. Dangote is paying for the imported crude in dollars; while the Nigerian government has allowed the refinery to pay for Nigerian crude in naira.

“India buys Nigerian crude as Dangote imports US oil.” News Report, August 11, 2025.

Professional oil traders have described what is unfolding as “oil trade irony”. It is only in Nigeria can such contradictions exist side by side as policy. Unfortunately, we are not finished with the paradoxes which future economic historians would find bewildering – if not totally incomprehensible.  

Our present predicament“Nigeria imports N1.2tn crude as local output stumbles.” News Report, July 2025.The story went further to inform readers that “Overall, Nigeria’s total import stood at N15.43tn in Q1 2025…”Take a minute to wrap your mind around that message. Nigeria, one of the largest producers of crude oil, has imported crude worth more than half of the 2025 Budget before review.

The importer is mostly Dangote Refinery – which we were told for years would source its crude from Nigeria. Dangote is paying for the imported crude in dollars; while the Nigerian government has allowed the refinery to pay for Nigerian crude in naira.“India buys Nigerian crude as Dangote imports US oil.” News Report, August 11, 2025.

Professional oil traders have described what is unfolding as “oil trade irony”. It is only in Nigeria can such contradictions exist side by side as policy. Unfortunately, we are not finished with the paradoxes which future economic historians would find bewildering – if not totally incomprehensible. “NNPC, Oil Marketers spend over N5.5 Trillion on fuel imports despite… Arise News, February 2025.“Marketers, others slam NNPC over failed refineries’ rehabilitation, neglect” – News Report, August The last two news reports epitomize our lack of seriousness in managing our national life-lines – crude oil, fuel supply and NNPCL. In June 2023, after Tinubu announced the end of fuel subsidy, and the roof caved in on us, the cabal at NNPCL seized the opportunity to cash in on the confusion the measures created. As usual, they trotted out the old blind horse of Turn Around Maintenance, TAM, which they promised would save us from fuel imports by December 2023. By February 2025 the nation was still importing fuel. By April 2025, President Tinubu woke up to the embarrassing truth that the nation had been swindled to the tune of $2.3 billion – a hefty amount of money for a poor nation.

He made a change and brought in new Board and Directors of NNPCL – still the nation’s cash cow. The result?

Here is what the Petroleum Products Retail Association of Nigeria, PETROAN, had to say through one of their leaders, Sunny Nkpe: “The current Group Chief Executive Officer of NNPCL, Bayo Ojulari, has not yet visited the Port Harcourt Refinery physically within four months in office; indicating lack of passion for the functionality of the Port Harcourt Refinery.”For Ojulari’ s sake and that of our fatherland, that accusation better not be true. Port Harcourt Refinery has become a major crime scene; along with the Kaduna and Warri refineries. There we were told by the former Chairman, Group Managing Director and the other Directors, Executive and non-Executive, that the lion’ s share of $2.3 billion was being spent to provide fuel, reduce imports and save foreign exchange. Even when critics, like me, warned Tinubu concerning that dubious proposal to revive those scraps called refineries, the newly-elected President, without regard to established precedents, trusted Mr Mele Kyari with $2.3 billion.Nigeria was duped; Kyari had fled; the former Director of Communications who, with a straight face, delivered fake news about tankers loading fuel at PH and Warri – before throwing in the towel or being thrown out.Meanwhile, poor Dangote, who was promised all the crude he needed, has turned to the USA, our former largest customer, to import crude oil. Consequently, his refinery cannot meet our domestic demands. For reasons still unclear to me, he nevertheless opposes importation of fuel by Independent Marketers. Apparently, Africa’ s richest man prefers to penalize the masses by creating scarcities which will again drive prices above N1000.The bottom line question now is: who is in charge? The Minister of Petroleum Resources is certainly not.

“NNPC, Oil Marketers spend over N5.5 Trillion on fuel imports despite… Arise News, February 2025.

“Marketers, others slam NNPC over failed refineries’ rehabilitation, neglect” – News Report, August  

The last two news reports epitomize our lack of seriousness in managing our national life-lines – crude oil, fuel supply and NNPCL. 

In June 2023, after Tinubu announced the end of fuel subsidy, and the roof caved in on us, the cabal at NNPCL seized the opportunity to cash in on the confusion the measures created. As usual, they trotted out the old blind horse of Turn Around Maintenance, TAM, which they promised would save us from fuel imports by December 2023. 

By February 2025 the nation was still importing fuel. By April 2025, President Tinubu woke up to the embarrassing truth that the nation had been swindled to the tune of $2.3 billion – a hefty amount of money for a poor nation. 

He made a change and brought in new Board and Directors of NNPCL – still the nation’s cash cow. The result?  

  Here is what the Petroleum Products Retail Association of Nigeria, PETROAN, had to say through one of their leaders, Sunny Nkpe:  “The current Group Chief Executive Officer of NNPCL, Bayo Ojulari, has not yet visited the Port Harcourt Refinery physically within four months in office; indicating lack of passion for the functionality of the Port Harcourt Refinery.”

For Ojulari’ s sake and that of our fatherland, that accusation better not be true. Port Harcourt Refinery has become a major crime scene; along with the Kaduna and Warri refineries. There we were told   by the former Chairman, Group Managing Director and the other Directors, Executive and non-Executive, that the lion’ s share of $2.3 billion was being spent to provide fuel, reduce imports and save foreign exchange. 

Even when critics, like me, warned Tinubu concerning that dubious proposal to revive those scraps called refineries, the newly-elected President, without regard to established precedents, trusted Mr Mele Kyari with $2.3 billion.

Nigeria was duped; Kyari had fled; the former Director of Communications who, with a straight face, delivered fake news about tankers loading fuel at PH and Warri – before throwing in the towel or being thrown out.

Meanwhile, poor Dangote, who was promised all the crude he needed, has turned to the USA, our former largest customer, to import crude oil. Consequently, his refinery cannot meet our domestic demands. For reasons still unclear to me, he nevertheless opposes importation of fuel by Independent Marketers. Apparently, Africa’ s richest man prefers to penalize the masses by creating scarcities which will again drive prices above N1000.

The bottom line question now is: who is in charge? The Minister of Petroleum Resources is certainly not.

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