A Review of the Nigerian Energy Industry

Licensees lack capacity to operate local refineries – Presidential panel

05 November 2012, Sweetcrude, ABUJA – THE National Refineries Special Task Force set up by the Nigerian government to evaluate the problems of and prospects for local refining of petroleum products says 28 out of the 35 investors given licences by the government to establish refineries in the country lacked the necessary capacity to successfully do so.

The panel headed by former Finance Minister, Dr. Kalu Idika Kalu, said in its report presented to President Goodluck Jonathan that that only seven out of the 35 licensees may be capable of setting up refineries.

“We have examined 35 people who have applied, who were given licences to operate refineries; unfortunately, we examined and we found only seven that may be capable of setting up refineries,” the committee’s deputy chairman, Yusuf Ali, said, as he presented the report to the president on friday.

To ensure self-sufficiency in petroleum products’ production; he said Nigeria needed three more refineries that should be established either by the government or private investors.

According to him, the refineries should be established in Lagos, Bayelsa and Kogi states.

“We have also made a recommendation that there is a need to have three more refineries in the country. We suggested the biggest refinery should be sited in Lagos, the medium size should be sited in Bayelsa; another small size refinery be sited in Kogi State.

“So, we have recommended the setting up of three refineries, either by the government or anybody as soon as possible,” he added.

The committee also suggested the immediate privatisation of existing refineries in the country, which should be done within 18 months.

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  • The question to ask is who licensed the 25 entities in the first place? And, isn’t government tired of going round in circles over ownership and operatorship of refineries? In one breadth the government is committing to the rehabilitation of all existing refineries and in another it is setting up a task force to determine what to do about domestic refining and the challenges therein. Bottomline is that government has no budsiness in business – Government’s business is nobody’s business, that’s why it is poorly run.

  • merry go round

  • The report is a good one,kudos,however i believe that it should go a step further by investigating who approved these refineries and on what grounds,if one one hand the approval comitee were decieved by 25 companies then these companies need to be prosecuted,however on the other hand if there were some shoddy deals under the carpet, then the comitee should be held responsible.It remains an abberation that an oil producing nation like ours cannot boast of functional refineries that can meet our need for refined crude products .Our government needs to learn that they are accountable to us .God bless Nigeria

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