On the heels of its low refining capacity, Nigeria in 2016 spent a staggering N4.74 trillion to import petroleum products for local consumption in the country.
Ibe Kachikwu, the minister of state for petroleum resources, who stated this Thursday in Abuja, further explained that, out of the N4.74 trillion in question, N3.4 trillion was used for product importation, while N1.34 trillion went into shipping and clearing purposes.
“First, the importation of petroleum products, even between January and December of this year (referring to 2016) amounted to about 20 million metric tonnes and a total amount of N3.4 trillion. The logistics cost of that importation, shipping, clearing, all that was about N1.34 trillion within the same one year period,” he said.
According to the minister, the consumption of FX from the Central Bank of Nigeria (CBN) for these energy imports was approximately 30 percent of the apex bank’s total FX outlet within the period under review.
Data from the Petroleum Products Pricing and Regulatory Agency (PPPRA) show that Nigeria’s domestic refining capacity as of today is 6 million litres per day out of a total national consumption of 35 million litres daily, averaging only 17.14 percent.
“So, in the midst of this sort of statistics, it was absolutely critical that we move on the issue of trying to end importation of products, improve our refineries and getting them to 100 percent performance template,” Kachikwu explained.
Pursuant to this ministerial policy vision, a steering committee led by the minister was set up, which also has a technical committee, led by Anibor Kragha, the CEO of refining at sate owned Nigerian National Petroleum Corporation (NNPC).
The committee’s mandate as given by the board of NNPC is to ensure that the financing, upgrade and repair of the government owned refineries in Kaduna, Warri and Port Harcourt.
“There isn’t an issue of concession, we are not concessioning national refineries, we are not selling equity, it is simply a financing package,” Kachikwu affirmed.
The plan, he explained, is to identify capable individuals, including making contact with those who built the three refineries.
Quick News Africa learnt that Saipem built the Warri refinery, JJC built the one in Port Harcourt, while Schroder constructed the one in Kaduna State.
The reason the federal government intends to go back to Saipem, JJC and Schroder is that the firms have the designs, the engineering outlay, upgrade capabilities and, in some cases, access to spare parts.
“If you are going to ship these, it is going to take a lot of time, so we are talking to them in that regard considering the aspect of speed,” Kachikwu observed.
