Marketers in the downstream sector of the nation’s petroleum industry have urged the Federal Government to consider building of new low-capacity, cost effective refineries that would augment the existing ones in the country.
The marketers, under the auspice of Odua Petrol Station Owners and Dealers Association of Nigeria (OPSODAN) said the involvement of the Federal Government would prevent monopoly in the downstream sub-sector while encouraging the involvement of private sector in the refining business.
The National President, OPSODAN, Dr. Kolawole Adewoyin, told The Guardian recently that involvement of the government would ensure fair play and adequate regulation of the downstream sub-sector.
According to him: “If it is true that the federal government is planning to sell the four ailing refineries after the passage of the Petroleum Industry Bill (PIB), then the government should ensure it builds new ones which should be low-cost, cost-effective and low capacity in order for them to be in the business.
“Considering the fact that Nigeria is the only member country of Organisation of Petroleum Exporting Countries (OPEC) which relies mainly on importation of refined petroleum products to meet domestic demands, it is imperative for the government to build and perhaps sell some stakes to private investors who in-turn will be charged with the responsibility of managing the refineries.”
Adewoyin however commended President Goodluck Jonathan’s transformation agenda, which includes liberalization of the entire petroleum sector under the strict supervision of the Minister of Petroleum Resources, Dr. Diezani Alison-Madueke.
He noted that the administration of Jonathan has ensure stability in the entire value-chain of distribution channels and urged that everything possible should be employed to ensure that Nigerians enjoy adequate supply as yuletide season.
Nigeria is Africa’s largest oil producer and the continent’s second-biggest economy, but still relies heavily on imported refined petroleum products for the servicing of the economy, creating a lucrative market for European refiners and oil traders at the expense of the Nigerian masses.
The country has four refineries – Port Harcourt Refining Company I and II, Warri Refining and Petrochemical Company Limited, and Kaduna Refining and Petrochemical Company – with a combined capacity of around 445,000 barrels per day (bpd) or 70.75 million litres per day, but they operate well below full capacity owing to decades of mismanagement and corruption.
Aliko Dangote, business mogul and Africa’s richest man, had in April disclosed his intention to build a 400,000-bpd-capacity refinery, which would be Nigeria’s first private and Africa’s largest petroleum refinery. The project is also expected to generate 25,000 jobs during construction with multiplier effects on the economy as a whole.
Information from The Guardian was used in this report.