The Crude Oil Refiners Association of Nigeria has urged the Federal Government to sell the Port Harcourt, Warri, and Kaduna refineries to fund the establishment of modular refineries.
CORAN stated that this step is crucial to addressing Nigeria’s persistent fuel crisis.
Currently managed by the Nigerian National Petroleum Company Limited, these refineries have faced significant operational challenges.
In an interview with Sunday PUNCH, CORAN’s Publicity Secretary, Eche Idoko, highlighted that despite over $1 billion invested in rehabilitating the Port Harcourt refinery, it remains non-operational after several delays.
Idoko stressed that the key to resolving fuel shortages is local refining. He proposed that intervention funds be allocated to support modular refineries, which could offer the government stakes in these facilities.
Idoko explained that the lack of refined products, compounded by the high cost of fuel imports and subsidy payments, exacerbates the crisis.
“We are not asking for free money. The government should set up an intervention fund in which people can access credit. So, it’s not free money. There are a lot of intervention funds in the agricultural sector,” Idoko said.
He continued, “The $1.5bn spent on the Port Harcourt refinery could be used to develop 10 modular refineries to be able to produce PMS of a minimum of 10,000 barrels per day. That is about 100,000 barrels a day. And if you have 100,000 barrels per day, at least, with the Dangote refinery, you would have solved that problem. We would actually have enough to begin to export.”
Idoko also pointed out that the fuel queues would persist until local refining becomes a reality.
He suggested that empowering modular refineries, which can be set up in 12 to 18 months, would be a more effective solution than continuing investments in the aging government refineries.
“The low-hanging fruit is simply to empower the modular refineries. A modular refinery takes an average of 12 to a maximum of 18 months to set up. This administration can identify and select from the modular refineries that are already on stream to support them,” Idoko said.
He added, “Right now, we have about 15 of them – five are operating but not producing PMS; the other 10 are at various stages of completion. If the government supported these 15 modular refineries to produce PMS, in about 12 months or less, they would have solved this problem of fuel scarcity, rather than say, you are putting money into the Port Harcourt refinery, Warri refinery, or Kaduna refinery.”
Idoko emphasized that the technology of the current government refineries is outdated and that previous administrations have considered selling them.
He suggested that the private sector, which drives refinery success in other countries, should be the primary force in Nigeria’s oil refining sector.
“Saudi Aramco is a purely private-loaned entity. It has shares, it has boards, it runs as a private entity. In the United States, in all the countries where you are seeing self-sufficiency in their refineries, the private sector takes the lead. All the government does is to create an enabling environment to provide support,” he concluded.
The NNPC reported spending over N9.3 trillion on petrol imports in 2023. Despite initially denying subsidy payments, the company recently confirmed that it imports petrol at a price 50% below the landing cost, with the government covering the deficit.
This situation has led to ongoing challenges in meeting domestic fuel demands.
