by Olusola Bello The Nigerian National Petroleum Corporations (NNPC) spent about $42 billion (N15.21trn) on fuel importation betwe...
by Olusola Bello
The Nigerian National Petroleum Corporations (NNPC) spent
about $42 billion (N15.21trn) on fuel importation between 2013 and 2018. This
amount could be put into various uses to increase local refining capacity and
ensure a sustainable supply of refined products in Nigeria.
For instance, this amount is capable of building about 14
refineries with average capacities of 100,000 barrels of crude oil per day at
an estimated cost of $3 billion if well managed, or three of the type of
Dangote Refinery, which is 650,000 barrels per day and is estimated to cost
between $12 and $14 billion.
Industry operators say about $6 billion of the amount could
have been used to upgrade the existing refineries, pipeline and depots
infrastructure and they would have been up and running.
According to Bureau of Public Enterprises (BPE), $36.4
billion was spent on importation of petroleum products between 2013 and 2017.
While the National Office of Statistics (NBS) says $6 billion (N2.289trn) was
spent in 2018. The figures from the two agencies when put together come to $42
billion.
Alex Okoh, director-general, BPE, stated last week that the
NNPC had not provided sufficient refining in the country as products were
imported on a continuous basis.
Babajide Soyode, former general manager of Warri Refinery
and Petrochemical Company, however, said about $6 billion of the above amount
would have been enough for the rehabilitation or upgrade of the four
refineries, pipelines and depots and the country would have been
self-sufficient in terms of refined products, and possibly even export to the
West African sub-region.
With this level of foreign exchange, Soyode said the naira
would have stabilised if it was not spent on importations and subsidy, and
urged the government to remove subsidy and allow the private sector to run the
refineries so that they could be more profitable.
Ibe Kachikwu, former minister of state for petroleum
resources, had said Nigeria allocated an average of $28 billion of her foreign
exchange earnings yearly to import about 92 percent of petrol consumed locally.
On average, the country consumes 66 million litres of petrol
daily, Kachikwu stated, and also noting that 40 percent of the $28 billion
import spend is used to finance its logistics.
Over the past four years, Nigeria had spent billions of
money on subsidy for petrol and kerosene, and all that the country has spent
could have financed a lot of investments in the downstream infrastructure.
The Federal Government in March 2019, kick started the
rehabilitation of Port Harcourt Refineries with the aim of achieving 90 percent
local refining capacity.
The first refinery in Port Harcourt was commissioned in 1965
to process 60,000 barrels of oil per stream day (bpsd) as well as the new plant
commissioned in 1989, which has a capacity of 150,000bpsd.
Both refineries possess a combined capacity of 210,000
barrels per stream day, making it the biggest oil refining company in Nigeria.
The rehabilitation would be in two phases with both the ENI and the original
builders participating in the process.
Source
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