In order to streamline fuel distribution and reduce the cost and logistical challenges associated with moving petrol and other refined products across Nigeria, former General Manager at the Nigerian National Petroleum Corporation (NNPC), Engr. Babajide Soyode, has called on the Federal Government to ensure that marketers acquire the existing 21 petroleum product and distribution depots across the country.
He urged the government to form a company to be called “Petroleum Products Storage and Distribution Company of Nigeria” and ensure that all marketers own the equities, with NNPC Ltd having a minimum equity.
“All marketers must own equities and liaise with NNPC. NNPC should have minimum equity,” the former General Manager of Warri and Kaduna refineries said.
He suggested that Mosimi Depot and other strategically located depots should therefore be viewed as national economic assets capable of supporting Nigeria’s transition from a predominantly import-dependent petroleum market to a more integrated domestic refining and distribution system.
“The oil cabals were the ones that ran down the pipelines and depots. They don’t have refineries, they don’t have pipelines, they don’t have fuel depots,” he said.
It was gathered that large majority of the strategic petrol product depots (spanning over 21 key regional locations) have long been inactive because the multi-product pipeline network connecting them to refineries and coastal jetties has been crippled by chronic sabotage and lack of active pumping capacity.
Also, criminal networks have persistently targeted national pipeline corridors (such as the Warri–Kaduna and Enugu–Makurdi–Yola routes), severely constraining the hydraulic transport of products directly to inland depots.
Due to non-functional pipelines, petroleum product evacuation and distribution heavily depend on expensive bridging and trucking via road networks from private coastal tank farms, contributing to logistical bottlenecks and retail price disparities.
Speaking on the state of Nigeria’s refining and downstream sectors, Soyode said the country already possesses critical distribution infrastructure that could be repositioned to support domestic refineries and ensure efficient movement of petroleum products.
He specifically pointed to the Mosimi Depot and other strategically located facilities as assets that could play a major role in solving Nigeria’s longstanding petroleum distribution challenges if properly integrated into a coordinated national supply network.
According to him, rather than allowing petroleum products to be moved through fragmented and inefficient channels, government should ensure that strategically located depots are available to receive products from refineries and distribute them to different parts of the country.
He said this would be particularly important as domestic refining capacity expands, stressing that producing petroleum products locally without an efficient distribution network could still leave consumers exposed to high transportation costs and supply bottlenecks.
The expert argued that existing depots should not be abandoned merely because their infrastructure has deteriorated or because the pattern of petroleum distribution has changed over the years.
Instead, he said, government should assess the facilities, acquire those considered strategically important and upgrade them for modern distribution requirements.
His argument forms part of a broader proposal for restructuring Nigeria’s downstream petroleum industry, under which government would focus on regulation, strategic infrastructure and energy security while allowing private investors to provide capital and operate commercial assets.
He maintained that the objective should be to create an integrated system linking refineries, pipelines, storage depots and petroleum marketers, rather than allowing each segment of the industry to operate in isolation.
The former petroleum executive also criticised the proliferation of petroleum depots around Lagos, arguing that their concentration around the Apapa axis had contributed to congestion and increased the pressure on roads and other infrastructure.
He suggested that some existing depots could be converted or repositioned for other energy-related uses, including petrochemical production, while strategically important facilities could be incorporated into a national petroleum distribution network.
According to him, the development of domestic refining capacity makes it even more important for Nigeria to have a functional network of storage and distribution facilities.
With the emergence of the Dangote Petroleum Refinery and efforts to revive government-owned refineries, he said, the country must ensure that refined products can move efficiently from production centres to major consumption markets.
He noted that transporting petroleum products over long distances by road increases costs, exposes roads to heavy truck traffic and creates additional risks for motorists and communities.
A functional network of strategically located depots, he said, would allow products to be stored closer to major markets and distributed through shorter and more efficient routes.
He called for a comprehensive audit of Nigeria’s existing petroleum infrastructure to determine which depots, pipelines and storage facilities should be rehabilitated, acquired, converted or integrated into the emerging domestic refining system.
He stressed that the objective should not simply be government ownership of petroleum infrastructure but the creation of an efficient distribution system capable of supporting competition among refiners and ensuring reliable supplies to consumers.
He said government could retain strategic control of critical infrastructure while allowing competent private operators to manage commercial operations under transparent agreements.
The proposal comes amid continuing concerns over the cost of transporting petroleum products and the impact of distribution inefficiencies on pump prices.
The expert maintained that increasing domestic refining capacity alone would not automatically translate into lower prices unless the country also addressed the infrastructure constraints between refineries and consumers.
SOURCE: tribuneonlineng.com