The Federal Government has been cautioned against over dependence on petroleum as a major source of foreign exchange due to the risks posed by the massive shale oil production in the United States; discovery of crude in many nations; rapid development of alternatives to petroleum; removal of legislative restriction to crude oil production in some nations, recession leading to low consumption and depleting nature of the product.
The warning was given by many experts, including the Lagos State Governor, Mr. Raji Fashola, the Chief Executive Officer of the Lagos State Internal Revenue Service, Mr. Tunde Fowler and renowned economist, Dr. Ayo Teriba at the second anniversary of January 9 Collective, J9C in Lagos yesterday.
Fashola, who was represented by his Special Adviser, Revd, Tunji Adebiyi, said it was very dangerous for the nation to over depend on oil revenue as a major means of revenue generation at the detriment of other undeveloped sources. He said, “It is not proper for the nation with many undeveloped and untapped resources to continue to depend on oil despite all the forces that threaten it at the global level.
The Chief Executive Officer of the Lagos State Internal Revenue Service, Mr. Tunde Fowler said, “Shale oil (light tight oil) is fast emerging as a significant and relatively low cost new unconventional resource in the US.
There is potential for shale oil production to spread globally over the next couple of decades. If it does, it would revolutionise global energy markets, providing greater long-term energy security at lower cost for many countries.
He said the discovery of oil in most countries leading to increase in supply of the product to the international market thereby depressing the prices of crude oil. Ghana is now an oil producing country. Fowler also pointed out that there was rapid development of alternative to oil, which include biofuel, alcohol, ammonia, carbon-neutral, hydrogen, liquid Hydrogen, natural gas to mention but a few.
Fowler said, “This drastic drop in revenue had a negative impact on the balance in the federation account and by extension the amount accruing to the three tiers of government during the year 2009.
He quoted the Nigerian Bureau of Statistics, Foreign Trade Report for Second Quarter 2013 as stating, “The Crude oil component of the total trade stood at N2.7 billion, a decrease of N3.2 billion or 10.6 per cent when compared with the previous quarter.
Year-on-year, the crude oil component recorded a 23.6per cent decline. Fowler said the Value of total trade for the First half of the year 2013 was N10.4 billion decrease of N3.2 or 23.8 per cent compared to N13. 7 billion recorded in the same period of the preceding year.
[Udeme Akpan, National Mirror]