The recent report that Nigeria is importing Premium Motor Spirit (PMS), popularly known as petrol, from neighbouring Niger Republic, is ironical. Besides, two African countries – Egypt and Algeria with far less crude oil deposits – have become leading African operators with 13 refineries and a combined capacity of 1.4 million barrels per day. Data from the African Refiners and Distributors Association revealed that Niger Republic, which started commercial oil production in 2011, has recorded strong refinery performance and surpassed local demand and is now exporting fuel to countries like Nigeria, Mali and Burkina Faso. As Nigeria struggles to get the existing refineries working and attract foreign investment to the downstream sector of the economy, Niger Republic has reportedly built a single 20,000 bpd refinery with configuration for its local market. In contrast, the previous attempts in 2007, 2010, 2012 and 2016 to revamp Nigeria’s four aging refineries and wean the country off imported fuel did not succeed. Moreover, the refineries have not been properly maintained. Unfortunately, so much money had been invested in their Turn Around Maintenance (TAM) without much to show for it. Therefore, the latest report that Nigeria currently imports about 90 per cent of petroleum products from other countries is reprehensible. It has become expedient now to halt the importation of fuel and revamp the four refineries and also build new ones. We hope that doing so will help meet the rising local demand as well as have enough for export. It will equally enhance government’s revenue. For instance, while the total budgeted oil revenue for 2019 was N3.37 trillion, statistics from the Petroleum Products Pricing Regulatory Agency (PPPRA) showed that N3trillion was spent on 18 billion litre imports of fuel. The Federal Government reportedly paid as much as N1trillion every year to subsidise local consumption of fuel.
Besides, Nigeria is still battling to stop the importation of dirty fuel into the country as the 2021 deadline approaches. Recent statistics from international research agencies have shown that millions of Nigerians risk health and economic consequences if the government fails to meet the deadline on importation of high sulphur fuels. Current standard in the country allows the importation of 150ppm for petrol. This is 15 times higher than the European Union (EU) standard. Undisputedly, fuels with high sulphur content are harmful to human health. Such fuels can trigger respiratory problems such as asthma, chronic bronchitis and lung disease. Fixing the existing refineries and building new ones will save the nation from the dangers of importing dirty fuels. At this time of ravaging Coronavirus pandemic, the warning is timely. In addition, sulphur dioxide from such fuels has been proven to be a major contributor to environmental hazards such as acid rain, among other health risks.
On assumption of office in July 2019, the Group Managing Director (GMD) of Nigeria National Petroleum Corporation (NNPC), Malam Mele Kyari, promised that the four refineries with a combined capacity of 445,000 bpd will be fixed. In the same vein, the Minister of State for Petroleum Resources, Timipre Sylva, vowed to do the same. Sadly, not much has changed in the refineries. In the last two years, the four refineries processed less than 40,000 metric tons of crude oil. As at 2013, the refineries produced 113,524 tonnes of petrol, 217,222 tonnes of diesel and a little more than 20,000 tonnes of Liquified Natural Gas for domestic use. In 2018, the refineries made a total loss of N132.5billion, a 39 per cent increase from the N95.09billion loss in 2017.
We, therefore, decry our continuous dependence on imported petroleum products despite being an oil-producing nation. Our refineries should be made to work while private investors given the nod to build modular refineries must begin work in earnest. It is commendable that the Dangote’s 650,000 bpd modular refinery is at advanced stage of completion. When completed, it is going to change the narrative and stop the dependence on imported fuel.
Four years ago, the government sought external financing for the refineries following a plunge in crude oil prices in the international market, thefts and spate of attacks on pipelines by militants. Recent statistics from PPPRA revealed that pipelines were damaged 9,420 times in five years while N10.4trillion was spent on fuel subsidy in 10 years. However, the efforts to obtain loans to revive the refineries crumbled after the government failed to convince investors of the viability of the venture. Currently, the NNPC is talking with Africa Export-Import Bank and other financial institutions to revamp the refineries.
We urge the NNPC to hasten the process because delay is no longer an option. At the same time, we should be thinking of how to depend less on fossil fuels as other countries are presently doing.