BY FESTUS OKOROMADU
Nigeria’s local refineries output has dropped by 92 per cent in 10 years, according to data from the Statistical Review of the World Energy 2023.
The report showed that output from the nation’s four refineries fell from 92,000 barrels per day in 2012 to just 6 000 barrels per day in 2022.
This represents a 92 per cent drop in production capacity.
The data was culled from the report, which was published in the 72ndn edition of Energy Institute.
This came as the latest report from the Organisation of the Petroleum Exporting Countries’ Annual Statistical Bulletin 2023, also revealed that the country’s crude oil refining capacity fell from 33,000 bpd in 2018 to 6,000 bpd in 2022, representing about 81 per cent drop in production output.
There have been growing concerns over the country’s continued importation of refined petroleum products despite boasting four government-owned refineries.
The refineries—two in Port Harcourt and one each in Warri and Kaduna—have a combined capacity to process around 4.45 million barrels per day of crude oil.
The Minister of State for Petroleum, Heineken Lokpobiri, had in August said the Port Harcourt plant would eventually begin operations by the end of this year after several delays.
He also said the Warri and Kaduna refineries were slated to commence crude oil processing sometime within the first quarter of 2024.
The refinery at Port Harcourt is undergoing a $1.5bn upgrade, as the minister emphasized that the aim of the revamping was to reduce and eventually stop the country’s dependency on fuel imports.
The Nigerian National Petroleum Company Limited had stopped payment on petrol subsidy in June due to the high cost spent on petrol importation.
Consequently, petrol prices jumped from N189 per litre to as high as N620 per litre in Lagos and its environs, and N700 and above in the North.
The Premium Motor Spirit Price Watch Report for October 2023 by the National Bureau of Statistics said the average price of petrol was N631, indicating about 223 per cent increase when compared to the value recorded in October 2022 (N195).
During a recent interview with an online publication, former President Olusegun Obasanjo while quoting a former Shell Managing Director said one of the reasons the country’s four refineries would not work was due to “too much corruption in refineries.”
In May, the Senate said Nigeria had spent more than N11.35trn on fixing the country’s three moribund refineries in the past 10 years.
Despite the massive investment in the refineries, the Federal Government currently also relies on the Dangote Refinery in which it owns a 20 per cent stake.
A former NNPCL’s spokesperson, Garba-Deen Muhammad, had said in June that the company would cut down on its fuel imports programme in August once the Dangote Refinery began to push out refined petroleum products from late July or early August.
“The report showed that output from the nation’s four refineries fell from 92,000 barrels per day in 2012 to just 6, 000 barrels per day in 2022.”
However, after failing to commence operations in August, management of Dangote Refinery said refining would commence in December 2023.
Emadeb Energy’s Chief Executive Officer, Adebowale Olujimi, said resuscitating local refining was “the way to go”.
“Petrol importation is not a sustainable way for a country to run. PMS price rising to over N600 per litre is an indication that the dynamics of the business is a tough one. It requires huge US dollars to bring products. The way forward is for local refineries to be revived,” he said.
On his part, the National Controller Operations of the Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, opined that although the association was in support of local refining of petrol, however, an alternative such as Compressed Natural Gas could also be explored.
Last week, the President/Chief Executive Officer, Dangote Group, Aliko Dangote, said that the $20bn Dangote refinery in Lekki, Lagos would start with the refining of 350,000 barrels per day of crude oil.
Dangote, who disclosed this during an interview with the Financial Times, also stated that the refinery would receive about six million barrels of crude in December 2023.
“We’re starting with 350,000 barrels a day, “Dangote told the Financial Times, adding that a deal had already been clinched for the “first cargo of about 6mn barrels” for delivery in December.
Dangote said he believed the refinery could reach its capacity of 650,000 barrels a day by the end of 2024, although the IMF has said it doubts it will reach more than a third of that by 2025.
At full tilt, the refinery, the world’s largest “single train” facility with just one distillation unit, could save Nigeria billions in foreign exchange currently spent on imported fuel.
It was “shameful”, Dangote said, that Nigeria, a major oil producer for more than 50 years, could not refine its own crude in anything like sufficient quantity.
Dangote conceded there were times when he thought the massive project — long delayed and about $8bn over budget — might jeopardise his business empire.
“The challenges that we faced, I don’t know whether other people can face these challenges and even survive. It’s either we sink or we sail through. And we thank the Almighty that at least we’ve arrived at the destination,” he said.
