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Nigeria Can Earn N13.1trn Annually From 29 Refinery Projects – Group

Nigeria’s investors would earn about N13.1trillion per annum as product sales and create additional 439,062 well-paying jobs for Nigerians across the entire value chain if 29 refinery projects with active licenses come on stream, a report by BudgIT, has said.

Gabriel Okeowo, BudgIT’s Principal Lead, said in the report that Nigeria will successfully unlock refining capacity of nearly 32.7billion litres of PMS per year, 19.6billion litres of diesel per year and 6.5billion litres of aviation fuel per year,adding that this is sufficient to meet the country’s refined products needs and also supply the West African market

He added: “It is instructive that only one private refinery, Niger Delta Petroleum Resources (NDPR), has commenced operation in Nigeria despite the country issuing over 44 refinery licenses to investors so far – some of them issued since 2007. Of these licenses, as issued by DPR, 15 are already expired. It is no coincidence that the only Modular Refinery that has commenced operation is the NDPR which produces AGO (diesel), one of the refined petroleum products that are fully deregulated.”

He said that findings of its new policy brief “Inside Nigeria’s Local Refineries” showed that Kaduna, Port Harcourt and Warri refineries incurred a cumulative loss of N32.8 billion in 2017 and N126.2 billion in 2018, making a total loss of N159 billion in the two most recent years alone.

He added that with an average combined refining capacity utilization of merely 8.27 per cent in 2018, the refineries are consistently unable to meet local demand, putting Nigeria in a precarious situation of importing nearly 91 per cent of locally consumed petrol and significant portions of other refined products used locally.

He advocated the need for full deregulation of the petroleum downstream sector and privatization of all government-owned refineries with a view to making many stagnating private-sector refinery projects more attractive to investors.

He advised government to invest at least 5 per cent of its annual budget for the ministry of petroleum on research and development, especially concerning optimizing the local refining technology in Nigeria.

“As an example of local efforts, Prof. Ibrahim Mohammed-Dabo and his team from Ahmadu Bello University (ABU) have developed an early prototype for local crude oil refining. Unfortunately, this isn’t receiving sufficient attention from the government and the private sector for further research, development and commercialization,” Okeowo, said.