Reduced oil output is major threat to Nigeria’s 2013 budget --- Ibru

Oil theft, others contribute to low domestic oil output.

The President, Lagos Chamber of Commerce and Industry (LCCI), Goodie Ibru, on Saturday said the shortfalls in domestic oil output posed a major threat to the nation’s 2013 budget.

Mr. Ibru said in a statement in Lagos that: “The unfolding global market scenario and the shortfalls in domestic oil output pose a major threat to the 2013 budget.

“There are profound concerns over the dwindling performance of the sector which have been attributed to the structural gaps in regulatory and fiscal practices.”

“Unfortunately, the Petroleum Industry Bill (PIB) which was adjudged the most significant attempt to address these challenges has yet to see the light of day. From 18.89 per cent in the first quarter of 2009, oil contribution to Gross Domestic Product has fallen to 14.7 per cent in the first quarter of 2013.

“It is disheartening that Nigeria currently records an estimated shortfall of $69 million daily due to oil theft, bunkering, illegal refineries and rising insecurity,” he added

He said that the international oil market landscape was changing very fast and eroding the competitive value of Nigeria’s oil and gas.

“The number of countries discovering oil and gas reserves within their national boundaries is increasing, thus expanding the supply base of oil and gas in the international market. While we note that the passage and implementation of the PIB may not entirely eliminate the problem, it will, however, expand investment in the sector.

“It is, therefore, important to improve on diversification of the economy, curb corruption and other forms of fiscal leakages, in order to further stabilise the economy,” he added.