Experts, on Wednesday, called on the Federal Government to urgently revamp the nation’s refineries and create an enabling environment for private investment in refineries to curb the rising importation of petroleum products.
The experts spoke in Lagos against the backdrop of the report on Petroleum Products Importation Statistics for the second quarter of 2018 recently released by the National Bureau of Statistics (NBS).
Kareem Jubril, Head, Energy Desk, Ecobank Nigeria, said the Federal Government should privatise the refineries since past maintenance and overhauling of the refineries had not had significant effect.
NAN reports that the NBS report said 4.79 billion litres of premium motor spirits (PMS) and 1.11 billion litres of automotive gas oil (AGO) were imported during the quarter under review.
The nation also imported 43.79 million litres of household kerosene (HHK) and 200.39 million litres of aviation turbine kerosene (ATK).
The report said the highest volume PMS put at 1.78 billion litres was imported in April, while the highest volume of AGO and HHK were imported in June.
On the other hand, petroleum products importation statistics in the first quarter of 2018 showed that 5.67 billion litres of PMS, 954.47 million litres of AGO, 66.914 million litres of HHK and 5122.067 million litres of ATK were imported.
According to Jubril, the volume of imported petroleum products and the amount the country spends importing them will continue to increase because as the economy grows, so will its demand for energy.
“And with higher demand for energy, means higher import for a country that does not produce enough refined products,” he said.
The energy expert said the high import volumes of petroleum products had made it imperative for the Federal Government to either revamp the existing refineries or provide the enabling environment for private sector participation.
Jubril, however, said the funds required to overhaul all the refineries could actually be used to build a modern refinery that would serve the needs of the country.
“I know that there is a lot of political hindrance to disposing all those refineries, but I do not see the reason why the government should continue to hold onto them.
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“They are actually cash cows that continue to drain government’s resources, and we have not really seen the output match the expenditure spent on them.
“We could privatise them, concession them, sell them off totally or government could hold a non-controlling share in them.
“They are different methods that we could explore to make sure that the assets do not go to waste as is the case presently,” he said.
According to him, the proposed completion of Dangote refinery in 2020 will render the existing refineries moribund by the time it comes on stream.
“The Dangote refinery is a 650, 000 barrel refinery, which is more than what Nigeria needs as a country. This is a refinery that will produce enough to sell to all our neighbouring countries.
“It then comes to mind that, what is the need for the government to hold a refinery that cannot function at optimum level or match Dangote refinery in efficiency and technology,” he said.
Jubril noted that the projected completion of the Dangote refinery in 2020, would not translate to a reduction in the amount spent on petroleum products.
Rather, the energy analyst said the money would go to a Nigerian company as against going to European or Asian refineries.
Mr. Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI), said the solution to reduce the country’s petroleum import was to have the nation’s refineries functioning.
Yusuf, however, said the government should relinquish the control of the refineries to the private sector to ensure optimum performance and efficiency.
The LCCI boss also called for total liberalisation of the petroleum sector, and that the present price control mechanism had hindered the growth of the sector and shut out private investors.
“The current arrangement is bleeding the economy. FAAC meeting cannot hold for months because of all the controversy of oil revenue,” he said.
Yusuf also said the speedy passage of the Petroleum Industry Bill (PIB) would boost the growth of the sector.