Fuel Scarcity To Linger, Minister Says Unavailable $700 Million Needed To Upgrade Refineries


The fuel scarcity being experienced by Nigerians for several months since President Muhammadu Buhari assumed office almost a year ago, may not end anytime soon, the Minister of State for Petroleum, Mr. Ibe Kachikwu, averred on Saturday.

Mr. Kachikwu disclosed that while Nigerian refineries are currently producing 12 million litres of Premium Motor Spirit, also known as petrol, Nigeria consunes about 45 million litres a day.

The remaining 33 million litres have to be imported, but the President Buhari administration had repeatedly said it did not have money for petrol marketers who take crude abroad to refine it and bring back home refined products for Nigerians to fuel their cars and generators in a country where there is virtually no stable electricity.

Petrol marketers have also recently complained that there was not enough dollars available to take the crude abroad, following President Buhari restriction policies on foreign currency, and the crash of the naira.

As a result, millions of Nigerians have been unable to get fuel and when they get it, have been paying five to ten times the official pump price of N86.5 per litre.

However, to upgrade refineries’ capacity, Nigeria needs at least $700 million it does have, the Minister disclosed. He said if the $700 million were available, Nigeria would upgrade its refineries to be able to perform up to 90 per cent capacity.

The country would still need to import at least 4.5 million litre of petrol if that upgrade was done.

Mr. Kachikwu spoke when he visited Eleme Local Government Area of River State on Saturday for the re-commissioning of the crude line from Bonny to the Port Harcourt refinery.

“We are not inviting foreign partners to take over the refineries; we do not have the funds. Even now that they (refineries) are working, they are probably working at about 60 per cent capacity. We need to upgrade these refineries and let them develop to the point where they can perform up to 90 per cent capacity. Total investment for that is up to $700 million and we don’t have that (money). Let us be honest about it.

“So, the best thing to do is to find a very creative way to bring in investors, who will come in, work with our team here, who have the skills, reactivate and upgrade facilities in this place and help us provide technical support and they would be paid through the flow-out of the refined products over time. There is no confusion about what they are coming to do; they are not coming to run the refinery. They are coming to provide funds to take our performance on these refineries to 90 percent and to provide us with technical skills. So, the areas of intervention will be funding and technical support,” Mr. Kachikwu said.

The good news: the Federal Government on Saturday re-commissioned the Escravos-Warri-Kaduna pipeline and announced that both Warri and Kaduna refineries were now receiving crude oil simultaneously for the first time in many years.

According to Mr. Kachikwu, the refinery in Warri has started working while Kaduna’s will start production at the end of the month.

The Group General Manager, Group Public Affairs Division, NNPC, Garba-Deen Muhammad, in a statement issued in Abuja, quoted Kachikwu as saying that for the first time in many years all the three refineries and major crude pipelines in Nigeria will be working at the same time.

The minister described the Escravos terminal as the heartbeat of the downstream sector and critical to local supply of finished petroleum products, adding that both refineries in Warri and Kaduna were majorly fed from Escravos crude stock.

Kachikwu said, “The challenge of this country is the challenge of focus and stewardship. For the first time in many years the three refineries are going to be working and it will help in a great deal with the issue of fuel supply and distribution across the country and will go a long way to manage the fuel crisis.”

He enjoined Nigerians to be more patient as the corporation was working hard to end fuel shortage across the country.

“I appreciate the patience of Nigerians and I am committed and focused to make petrol available to all nooks and crannies of Nigeria,” he said.

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