A country selling crude oil is the most stupid form of slavery, because it is just like giving your resources away for almost free. Only a mumu lazy country will think it is making money by selling crude. That’s why most crude oil exporting countries like Nigeria and Angola remain poor while countries like China, France with little or no crude oil are building their economies from buying and refining crude oil.
A barrel of crude oil today is about $60 (₦90,000). Remember Nigeria does not get the whole $60. The exploration companies, transport, freight, international traders, investors all get their cut. At the end, let’s say Nigeria gets about $35 on each barrel. That is about ₦50,000.
Now let’s see what a refiner gets from that barrel of crude oil.
Here’s what one barrel of crude oil can produce:
Liquefied gases to fill 12 units of 12kg cylinders for home use (144kg of gas). About ₦150,000
40 litres of petrol. About ₦30,000
52 litres of diesel. About ₦55,000
One litre of engine oil. About ₦4,000
4 litres of coal tar for patching roofs or streets. About ₦10,000
Nearly 70 kilowatt hours of electricity at a power plant generated by residual fuel. At ₦209.50 per kWh, that will be ₦15,000 (Band A)
About 2.5Kg of charcoal briquettes. About ₦5,000
150 candles. About ₦15,000
There are enough petrochemicals left in that same barrel to provide the base for one of the following:
39 polyester shirts
750 pocket combs
540 toothbrushes
65 plastic packers
65 plastic drinking cups
135 four-inch rubber balls.
But let’s leave these ones out in the calculation.
The lighter materials in a barrel are used mainly for paint thinners and dry-cleaning solvents and they can make nearly a quart of one of these products.
Let’s leave these ones too out in the calculation.
The miscellaneous fraction of what is left still contains enough by-products to be used in medicinal oils, still gas, road oil and plant condensates.
Let’s leave these ones also out in the calculation.
Estimated total turnover from refining one barrel of crude oil is therefore about ₦340,000.
It costs about $7 (₦11,000) to refine one barrel of crude oil. Let’s assume all the other costs is ₦20,000 per barrel. Therefore total cost is ₦90,000 + ₦11,000 + ₦20,000 = ₦121,000.
Therefore, the take-home profit from one barrel of crude oil is ₦340,000 – ₦121,000 = ₦219,000.
If we sell crude oil, we get ₦52,000.
If we refine and sell the by-products, we get ₦219,000.
Isn’t this crazy? Only a f00lish country will hope to be rich from selling its crude.
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