OPEC Warns FG as Refining Capacity Crashes to 6,000b/d
The Petroleum Exporting Countries recent report has revealed that Nigeria’s crude oil refining capacity has further reduced to just 6,000 barrels per day.
In its latest Annual Statistical Bulletin 2023, OPEC said the country’s capacity to refine its crude oil went from 33,000 bpd in 2018 to 6,000 bpd in 2022.
The country’s crude oil refining capacity was down by 33 per cent last year from 5,000 bpd in 2021.
According to the oil cartel, Nigeria has an average refining capacity of 10,600 bpd in five years, making it the OPEC member with the lowest refining capacity.
There have been growing concerns over the country’s continued importation of petroleum products despite having government-owned refineries.
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Saudi Arabia currently has the highest refining capacity among OPEC members with an average equivalent of 2.6 million barrels per day, according to OPEC.
Algeria, Angola, Congo, Gabon, Iran, Iraq, Kuwait, Libya, United Arab Emirates and Venezuela out-performed Nigeria’s refining capacity between 2018 and 2022, OPEC data indicated.
Meanwhile, the Nigerian National Petroleum Company Ltd stopped the petrol subsidy regime in June due to the cost the government was spending importing petrol.
Consequently, petrol prices jumped from N189 per litre to as high as N617 per litre.
The latest Premium Motor Spirit Price Watch Report for July 2023 by the National Bureau of Statistics said the price of petrol rose about 215 per cent in the last one year.
In May, the Senate said Nigeria spent more than N11.35tn on fixing the country’s three moribund refineries in the past 10 years.
Despite the massive investment in the refineries, the Federal Government currently relies on the Dangote Refinery, in which it owns 20 per cent stake.
In June, the NNPCL’s spokesperson, Garba-Deen Muhammad said that the company would cut down its fuel imports programme in August once the Dangote Refinery began to push out refined petroleum products from late July or early August.
He said, “NNPC Limited is bringing in products from outside Nigeria as a matter of necessity, not as a matter of choice. We would have preferred that we produce here; refine here and sell and provide the energy security that the country needs.
“Because of the circumstances that surround our refineries, we cannot allow the country to be grounded. So, we have to buy wherever we can get and sell. So, if Dangote products are available, why should we not buy from Dangote?
“There is absolutely no reason. And that is the reason we are interested in the Dangote Refinery. We are co-owners, shouldn’t we do business with our partners rather than do it with other people?”
However, recent report revealed that the management of Dangote Refinery was unsure when the facility would commence operations.
Emadeb Energy’s Chief Executive Officer, Adebowale Olujimi, said resuscitating local refining was “the way to go”.
“Petrol importation is not a sustainable way for a country to run. PMS price rising to over N600 per litre is an indication that the dynamics of the business is a tough one. It requires huge US dollars to bring products. The way forward is for local refineries to be revived,” he said.
On his part, the National Controller Operations of the Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi opined that although the association was in support of local refining of petrol, however, an alternative such as Compressed Natural Gas could also be explored.
