Disadvantages of Crude Oil in Nigeria


Crude oil is a naturally occurring liquid found beneath the earth’s surface which can be refined to make other products for use as fuels in cars and equipment. Once this fluid is extracted, refiners can use it to produce other essential fuels such as diesel oil, kerosene, and gasoline. Crude oil (popularly referred to as oil) is one of the primary catalysts for economic growth in the world at large. Crude oil has been a great source of energy over the ages and especially in Nigeria, so much so that many have thought it indispensable. However, just like other energy sources, crude oil has its disadvantages.

Disadvantages of Crude Oil in Nigeria

Disadvantages of Crude Oil in Nigeria

Crude oil has been widely used in Nigeria and has offered the nation much advantages. First of which is that it has led to significant economic growth in Nigeria. The discovery of crude oil has created thousands of new jobs and employment opportunities and has also served as a viable source of income for the country.

Oil was first discovered in commercial quantity in Nigeria in 1956. It has been more than sixty years now and the petroleum sector still remains one of the primary sources of the country`s wealth. Nigeria derives about 90% of its foreign exchange earnings from the oil and gas sector. The oil sector is one of the most crucial in Nigeria. You might begin to wonder how such a blessing as crude oil can have its downside but whatever has its benefits would have its disadvantages too. This article writes on the disadvantages of crude oil in Nigeria. Read on below:

Unequal distribution of revenue

Oil is a source of great wealth to any nation. In most oil-rich countries, of which Nigeria is not exempted, the concentrated revenue gotten from crude oil goes to a selected few, such as the government of the country. When those in government have unchecked control over this wealth, it allows for corruption. This is what is evident in Nigeria today. Much revenue gotten from crude oil and used for the benefit of the masses keeps being looted by those in government.

The infrastructure of the oil sector requires continuous maintenance

The equipment used in the oil sector requires continuous maintenance. In Nigeria, whenever there is an oil spillage, the aftermath is usually more than we can handle because the government has been careless about improving the start of facilities in the sector.

Limited in supply and unsustainability

Crude oil is limited in supply and experts now question its sustainability. Currently, the global oil reserves are becoming more depleted because of increasing demand by several countries. What is worse is that countries like Nigeria are not preparing themselves for a shift in energy source considering that the world will sooner or later run out of supply.

Sole attention on Crude oil as the primary source of revenue

It has been very difficult to shift the attention of the Nigerian governments especially in past years from Petroleum. Nigeria is blessed with other mineral resources such as coal, iron ore, lead, limestone, tin and zinc. Nigeria also has arable land fit for agriculture. But the country has focused on oil and left these other sectors much to its detriment thus ignoring opportunities for growth.

Environmental pollution

This is perhaps one of the most disadvantages of crude oil, not only in Nigeria but in the world at large. Extraction and burning of crude oil generate greenhouse gases that causes pollution to the environment and results in global warming. Let us come down to Nigeria, the Ogoni community, for example, is one of those that has suffered from the disadvantages of crude oil in Nigeria. The oil spills that have taken place in Ogoni have been such a disaster for the community and Nigeria at large. It is reported that Nigeria will need billions of dollars to clean up Ogoni land. There is also the social and economic impact on this area. For example, violation of human rights, poor nutrition, problem of clean water sources, and pollution of the environment. It is sad that those who live in the area where Nigeria gets the bulk of her wealth from, have to suffer this way. The main problems arise from oil leakages, gas flaring, and the escape of other chemicals during the process of oil production. Although, the Nigerian government has established laws for protection of communities such as Ogoni, much has not been done in terms of implementation and enforcement of these laws.

Social unrest

Another disadvantage of crude oil is the social unrest it has brought about in many parts of the country. An example is the case of Niger Delta. The Niger Delta crisis has resulted in death, kidnappings, destruction of pipelines, unemployment, and general state of unrest for the Niger Delta region. The militants began by fighting for their rights because of the unfairness meted out to them in their land. It has however grown worse with time.

Oil spillage

Oil spills have adverse effects on marine life such as water pollution. Oil spillage has caused the death of thousands of animals and fishes annually.

Crude oil sustains growth of terrorism and violence.

Oil money has been used in time past to finance terrorism and terrorist organization. This is because of the abundance of wealth gotten from oil. The billions gotten from oil most sometimes goes directly into wrong hands. This gives rise to violence and growth in terrorism. Many have argued that crude oil in Nigeria has further fostered terrorism in the land.

Fluctuation in Oil price.

The economic problems that Nigeria is currently experiencing are due to a lack of foresight and planning. Nigeria spent a lot and recklessly too when oil prices were high without having a plan on how to cope and sustain the economy when oil prices became lower.

As seen above, the common downsides to crude oil in Nigeria are environmental pollution, corruption, social unrest, terrorism and violence, lack of maintenance and non-diversification of the economy.



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