The Federal Government has been urged to sell the Port Harcourt, Warri, and Kaduna refineries, which are managed by the Nigerian National Petroleum Company Limited (NNPCL), to fund the development of modular refineries.
The Crude Oil Refiners Association of Nigeria (CORAN) made this appeal during an interview with Sunday PUNCH, highlighting that this move could be a viable solution to the persistent fuel crisis in the country.
Over the past month, Nigerians have faced long queues at filling stations, with fuel prices soaring to as high as ₦1,000 per liter in some regions. Despite NNPCL’s assurances, the situation remains dire, significantly impacting transportation costs.
The Publicity Secretary of CORAN, Eche Idoko, expressed concern over the government’s expenditure of over $1 billion on the rehabilitation of the Port Harcourt refinery, which has yet to commence production despite multiple delays.
Idoko emphasized that the ongoing fuel shortages will persist unless Nigeria begins refining its crude oil locally.
He proposed that the government establish intervention funds to support modular refineries, which would also grant the government a stake in these operations.
He pointed out that Nigeria’s fuel crisis stems from the insufficient availability of refined products, as the cost of importing fuel, compounded by foreign exchange challenges and subsidy payments, burdens the government.
“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.
Idoko further argued that the $1.5 billion spent on the Port Harcourt refinery could have been better utilized to develop ten modular refineries, each capable of producing a minimum of 10,000 barrels per day, totaling about 100,000 barrels daily.
He added that this, combined with the output from the Dangote refinery, could resolve the country’s fuel shortage and even allow for exports.
Idoko also noted that no other entity can import Premium Motor Spirit (PMS) due to government subsidies and the scarcity of foreign exchange.
As a potential solution to the recurring fuel scarcity, he suggested empowering modular refineries, which typically take between 12 to 18 months to establish.
He urged the government to support the 15 existing modular refineries, five of which are operational but not yet producing PMS, while the remaining ten are at various stages of completion.
Idoko also highlighted that many of the existing NNPC refineries are outdated and should be sold, as technological advancements have rendered them obsolete.
He urged the government to set a clear timeline for phasing out the importation of petroleum products and to collaborate with stakeholders in the modular refinery sector to develop a sustainable plan.
“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.
“That was why there was a particular administration that tried to sell those facilities. Most of them are obsolete. Technology has changed. I would have said that the government should sell them off. We know that the issue of fuel crisis is a serious issue, but do we have a solution to it now? We don’t have a quick-fix solution other than what is being done right now, which is importation.
“But that is simply not sustainable. For how long can you continue like this? And so, what we are saying is that give yourself a target of the time to completely wind down the importation of petroleum products. Bring stakeholders like the modular refineries and the traders together. We will all put our heads together and then work out a scheme.
“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 submitted.
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