As shown in the table above, between 2006 and 2011, the Federal Government of Nigeria has spent in excess of N3.56 trillion, a huge burden that has weighed heavily on its finances in view of numerous needs.
Apart from being a huge resource drain, the subsidy regime is open to corruption, with the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, admitting that checking marketers’ sharp practices had become intractable.
As the arguments go back and forth on the wisdom of the subsidy removal, many believe that the downstream sector is not fully prepared, infrastructure-wise for deregulation.
For instance, what are the states of the refineries, can the Nigerian National Petroleum Corporation, NNPC, the operators of the four refineries cope with the fuel needs of Nigerians?
host of others?
unduly on account of operators’ recklessness?
Local Refining – the existing four refineries have combined capacity of 445,000 barrels per day, bpd. Over the past five years the refineries only contributed between 4% and 20% to the national PMS/petrol consumption, according to PPPR calculations.
The NNPC enjoys monopoly on refining in Nigeria, as it is the operator of the nation’s existing refineries. However, in view of current realities, the corporation is not deriving maximum benefits from its monopoly status, as it should because of the very poor state of the refineries.
enjoyed for decades.
Downstream regulators in the DPR were weary to comment on the planned deregulation when contacted severally by Sweetcrude, but its PPPRA counterpart had a whole lot of arguments in favour of deregulation.
marketing, supply and distribution of petroleum products.
• The existing pipelines need to be refurbished and adequately maintained.
• There is no pipeline network in the North West region. Could be an opportunity for investment
• Also, developing surveillance system of the pipeline network in view of the incessant pipeline vandalism.