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In today’s class, we will be talking about petroleum and the Nigerian economy. Enjoy the class!
Petroleum and the Nigerian Economy
Petroleum was discovered in commercial quantity in 1956 by shell BP at Oloibiri in the present River State. Ever since 1976 till date, petroleum has remained the major source of government revenue in Nigeria.
POSITIVE CONTRIBUTIONS OF PETROLEUM TO NIGERIA ECONOMY
- Petroleum serves as sources of revenue to the country.
- Employment generation e.g. petroleum engineers, geologists, chemical engineers etc.
- Improvement in the infrastructure of the country e.g. flyovers, airports roads development are linked to earning from petroleum.
- The major foreign exchange earnings in the country is crude oil. Therefore petroleum serves as a source of foreign exchange.
- Development of oil-related industries e.g. oil servicing firm, petrochemical industry.
- Improvement of the living standard of the citizens of the country.
- Provision of a wide range of products.
- A major source of fuel e.g. petrol, diesel, kerosene etc.
- Repositioning of the country in global politics.
NEGATIVE EFFECTS OF PETROLEUM IN NIGERIA
- Environment pollution e.g. Niger Delta area with land and air pollution.
- Inflation – since the discovery of oil in Nigeria prices of goods and services have been Skyrocketing.
- Neglect of Agriculture – prices of foodstuff in the market are so dear due to the neglect of the agricultural sector which used to be the major source of revenue for the government.
- Increase in the crime rate – the emergence of advance fee fraud known as 419, Cybercrime, Armed robbery, pen robbery is traceable to the emergence of oil.
- Civil Unrest – Breakdown of law and order in Niger Delta, coupled with the kidnapping of oil workers for ransom had turned the country to a no go area.
Other mineral resources in Nigeria
- Iron Ore
- Tin and Columbite
- Lead and Zinc
NIGERIA NATIONAL PETROLEUM CORPORATION
The Nigerian National Petroleum Corporation (NNPC) was established in 1977 and was saddled with the responsibility of exploration production and refining of petroleum as well as distributing i.e. marketing of crude oil and petroleum products.
ROLES OF THE NIGERIAN NATIONAL PETROLEUM CORPORATION (NNPC)
- Regulating the activities of the oil companies i.e. issuance of a license for oil exploration, prospecting, operation of filling stations.
- Exploration and production of petroleum products.
- Refining and distributing the products for domestic use.
- Manpower development, this led to the establishment of the Petroleum Training Institute in Warri, Delta State.
- Implementing oil policies i.e. determining the prices of petroleum products.
- Employment generation.
- Describe the methods of measuring national income.
- Discuss economic activities.
- State five determinant of the elasticity of demand.
- What is the supply schedule?
- State the reasons for holding money.
In our next class, we will be talking about Manufacturing and Construction Industry. We hope you enjoyed the class.
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