An Appraisal of Illegal Crude Oil Refinery Impact on Nigerian Economy

Abstract

Illegal crude oil refining is closely linked with, and is often an off-shoot of crude oil theft, albeit on a more domestic scale. Illegal crude oil refineries have always existed in the Niger Delta creeks, and have been a thriving business for decades. They have also been used to fund the Niger Delta insurgency, and to feed the greed of many. But it has had a negative impact on Nigeria’s economy. It has also caused environmental hazards. Curbing the incidence of illegal oil refining will greatly reduce domestic oil theft or oil bunkering, and pipeline vandalization, and lead to an upsurge in revenue for the Federal Government. It will reduce environmental pollution, open more investment opportunities and encourage more private investors to invest on modular oil refineries in Nigeria. This paper will suggest that the best answer to illegal oil refining would be to license modular refineries, and bring the erstwhile illegal refineries on stream, to buy the crude oil legitimately, and also pay tax, and as well become subject to regulation.