By Uche Mbah
The Nigeria National Petroleum Corporation (NNPC) has confirmed what most Nigerians always suspected. It has confirmed how a country blessed with so much crude oil, wastes billions of hard currency importing petrol. To make maximum gain from the crude oil it was blessed with, Nigeria, also, spent billions of Dollars, building Refineries – Port Hacourt, Warri, Kaduna.
But, here’s the state of the refineries.
They have since turned into a waste, a curse, and a cesspool of corruption.
NNPC’s Group Managing Director and Chief Executive Officer, Mele Kyari, has just disclosed that every drop of fuel, currently being used in Nigeria is imported because there is no single functional refinery in the country.
This is the first time that the government would admit that there is no refining going on, at all, in Nigeria. Before now, local refining hardly suffices for local consumption.
Recent reports indicate that the Kaduna refinery spends billions every month paying workers who are not working.
Kyari, however, said that efforts are on to change the situation.
But this has been a constant refrain of successive governmennts on the issue, which sees more words than action.
“Today, unfortunately, all our four refineries are down. We are importing every petroleum product that we consume in this country”, Kyari said.
For the records, these same refineries are the same ones Nigeria has spent hundreds of millions of dollars on, in turn-around maintenance.
Nigeria has been playing a yoyo game on the deregulation and price readjustments.
The most recent was in March, an action occasioned by the disruption of supply chains by the dreaded COVID Pandemic. There was a reduction in pump price, which usually varies from time to time due to different variables – import tariffs and international crude prices.
The NNPC boss assured that the government is working hard to ensure that they are “able to fix our refineries and also have new initiatives, like having the condensate refinery, which I am also happy to announce that the Seplat group is cooperating with NNPC to create a splitter plant in the short term.”
The government has always had a monopoly on the refining of petroleum products until recently when Aliko Dangote joined the club.
The government mostly operates joint ventures with multinationals. Hopefully, the private driven initiatives will evaporate the strangleholds of the oil majors on the country and probably ease pricing.
“There are other private initiatives. As we know, there are several licenses granted by the Federal Government for people to construct refineries, but they can’t do this because of the clear issue around the market structure.
“But thankfully, we have transited out of the regulated petroleum market into a deregulated market, which means that companies can now predict what will be the refinery price of petroleum and they can now have the basis of investment; banks can see visibility around the recovery of cost and margin and ultimately we will see more activities coming up.
“As we know, Nigeria, is a net importer of petroleum products; that simply means that with all the resources that we have, we still import petroleum products. Beyond that, it is a continent that is projected to have a significant increase in the consumption of petroleum in the coming years, even up till 2040.
“The projections about 2.3mb/d by 2040 are still a very conservative estimate. We have one of the most active population, growth rate, and projections showing that by 2049 we would likely be the most populous continent in the world.
“This means Africa is a continent of opportunity, and Nigeria will contribute about 25 percent of the total population of Africa by 2040; and in terms of growth, it will constitute about 20 percent. We are in a country with vast opportunities where you cannot exclude petroleum and its related resources.
“What we can do to get this to work for us is first, make the operating environment competitive – this is one of the targets so far of the Minister and the government of today, first to bring down the cost of production and then pay attention to gas”, Kyari said.
