Fuel price hike: 4 modular refineries will soon take off — Govt

*Modular oil refinery.

*Modular oil refinery.

…Dangote refinery to add 750,000bpd to downstream sector

Oscarline Onwuemenyi

18 May 2016, Sweetcrude, Abuja – The Federal Government has said it will soon release the names of the four companies which successfully bid to operate modular refineries to enable the commencement of operations.

The Minister of Information and Culture, Alhaji Lai Mohammed, who disclosed this while briefing journalists in Abuja as part of ongoing sensitization campaign on the deregulation of the downstream sector of the nation’s petroleum industry, assured that when fully operational, the country will be able to refine 650,000 per day of petrol from the refineries.

He added that Dangote Refinery which is expected to come on stream next year will also add 750,000 barrels per day, to make Nigeria net exporter of refined petroleum products.

The Minister noted that the government has meticulously followed the process for approving the bid winners, adding that the ventures will help create over 200,000 jobs as well as stimulate the economy.

Mohammed, who briefed in company of the Permanent Secretary of the Ministry and General Manager, Group Public Affairs of the Nigerian National Petroleum Corporation NNPC, Mr. Garba Deen Muhammad, told newsmen that the NNPC was heading for bankruptcy because it became the sole importer of over 90 percent of petroleum products consumed by Nigerians shortly before the recent deregulation.

He disclosed that NNPC was spending about $550 million and needed about $600m to continue fuel importation, before the current government intervention in the sector to save the firm from bankruptcy.

He disclosed further that the nation could not afford to open letters of credit for the fuel importers because of the dwindling income from crude oil

According to him, “We did not have enough foreign exchange to open letters of credit for people to import fuel. We must never be pushed to a situation in which we are forced to subsidize fuel prices again in this country, because even if prices of crude oil improves, there are a lot of things we can do with the money to ameliorate the sufferings of our people.”

Mohammed further assured that the new price regime will discourage petroleum products hoarding, product diversion and other unwholesome practices in the petroleum industry, also added that “We have no choice but to deregulate the price of petrol at the rate we were going.”

He debunked insinuations that what government did was to remove subsidy from petroleum products adding that, “there was no subsidy in the first place. One Trillion Naira was paid out as subsidy last year, therefore, in the 2016 budget, the government refused to make provision for oil subsidy.”

On the gain expected from the current deregulation, he announced that government will create jobs for 370,000 technicians and artisans while 1.76 million unemployed small business operators were being targeted for loans and grants.

“They will access this loans through Cooperatives and loans will be accessed without collaterals. We are also going to commence the feeding 5m pupils in our public schools daily. This will create more opportunities in the agricultural sector.”

He disclosed that there was no basis for comparisons with similar action embarked upon in 2012, adding that, “income from oil has fallen and there is a drastic reduction in the foreign exchange available.”

He noted that “From October last year, NNPC has been responsible for over 90% of fuel consumed, while 445,000 barrels was being exchanged for fuel by NNPC.

“Activities of militants have further reduced government earnings and production volumes reduced to 1.65mbpd as against the projected 2.2mbpd.”

He also blamed the current travails on the activities of marketers who he said were buying petrol at N77 per litre and sell higher to Nigerian neighbours.

He, however, assured that the regulatory agencies including the Department of Petroleum Resources,(DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA) will be empowered to provide a level playing ground for operators of the sector.

While appealing to the organized Labour to sheath their sword, the Minister declared that there can be salary increase at the moment as Nigeria was losing over 60% of its earnings, daily

The Minister who also spoke on the effect of the activities of the Niger Delta Avengers, NDA, appealed to the group to lay down their arms and embrace dialogue as the country is losing 1000 megawatts of electricity as well as over 500,000 barrels of crude oil daily.

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