Subsidy: Senate seeks status of modular refineries

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The Senate yesterday resolved to invite the Minister of Petroleum Resources and Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Mele Kolo Kyari, over the status of refineries in the country.

The upper chamber mandated its Petroleum Committee (Downstream and Upstream) when constituted, to invite the minister and NNPC GMD to brief it on the status of existing refineries, including the status of newly licensed modular refineries in the country.

The resolution followed the adoption of a motion on “Existing Petroleum Subsidy: Ensuring Self -Sufficiency in Domestic Refining of Petroleum Products,” sponsored by Senator Rose Oko and 42 others.

In her lead debate Oko noted that although Nigeria produces 1.7 million barrels of crude oil per day, its moribund refineries had very little refining capacity.

She said the country imports roughly 90 per cent of its fuel which negates much of the benefits accruing to oil producing countries from high crude prices.

She lamented that despite the resources spent on turn around maintenance, none of the NNPC’s four refineries functions up to 50 per cent of their combined capacity of 445,000 barrels per day (bpd).

Oko noted that the objective of modular refineries was to overcome the huge capital requirement that impedes establishment and maintenance of large scale refineries.

According to her, this would ensure self sufficiency in the production and supply of petroleum products.

Oko said data from the Department of Petroleum Resources (DPR) website indicated that a total of 633,000 bpd refining capacity had already been lost due to the expiration of licenses of both conventional and modular refinery projects.

The country, she said, introduced petroleum subsidy in the 80s as a measure to strengthen local refining industry and improve product affordability and domestic consumption.

She noted that successive administrations had failed to make the country self-sufficient in domestic production.

Oko said despite the dire need for the country to exit petroleum importation and subsidy, there was neither a comprehensive plan to ensue its actualisation in the nearest future.

According to her, there was no form of technical and financial aid for refinery license holders to ensure that the refineries become optimally operational.

Senate President, Ahmad Lawan, in his remarks, said the motion was designed to ensure that the 43 licensed modular refineries become operational.

Lawan noted that there was the need to support the refineries to become active and functional.

He assured that the Senate would make it a point of duty to ensure the establishment of the modular refineries.

Lawan said the Petroleum Industry Bill (PIB) was also key to the optimal utilisation of the refineries and the emergence of the modular refineries.

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