Report: oil bunkering in nigeria records a new high. under president jonathan's leadership

Report: Oil bunkering in Nigeria records a new high under President Jonathan’s leadership

by Chi Ibe

Photo credit: Business news

Every month, Nigeria loses $1bn or more to oil theft by criminal networks whose activities have expanded rapidly under the presidency of Goodluck Jonathan, Businessday reports.
Bunkering expanded rapidly when local gangs in the Niger Delta took up arms in the late 1990s to try to force the federal government to give more oil revenue to the region. But since President Jonathan came into power, Ngozi Okonjo-Iweala, Finance Minister has revealed that the theft of oil — known in Nigeria as “bunkering” — along with fraud in the allocation of a ­controversial fuel subsidy, might together have cost the state $14bn last year.
BusinessDay revealed that oil theft has increased since 2009, when the government launched an amnesty for militants engaged in a campaign of sabotage in the oil-producing Niger Delta region. The amnesty led to a recovery in oil production but a policy of appeasing the delta militants coincided with collusion by senior political and military figures in the illicit oil trade.
This resulted in a surge in theft. The trade in stolen oil now involves a sophisticated criminal network and international traders who provide oil at discounted prices to refineries in west Africa, China and India.
According to Okonjo-Iweala, the trade in stolen oil led to a 17% fall in official oil sales in April, or about 400000 barrels per day. “We have to get very serious about the bunkering issue. If we can stop the amount that is stolen, we can beef up the excess crude account faster,” Okonjo-Iweala told the Financial Times.
At average April prices of $121 per barrel, this implied a loss of $1,2bn. This is a higher estimate than that given by SPDC, Royal Dutch Shell’s Nigerian subsidiary, which put theft at between 150000 barrels per day and 180000 barrels per day.
This leaves Africa’s leading oil producer with a limited cushion if oil prices continue to fall. Africa’s second-largest economy depends on oil for more than 75% of its hard currency earnings and typically more than 90% of state revenue. It relies on imports to meet 70% of its fuel needs because of inadequate refining capacity.
The naira appreciated 0,2% yesterday to 1624000 naira per dollar in Lagos.
We have to get very serious about bunkering.… If we can stop the amount that is stolen, we can beef up the excess oil account faster.