The Federal Government has said the removal of fuel subsidy, which led to the recent hike in the pump price of fuel, is a good development for private refineries, as the subsidy-driven environment was not conducive for the investors.
The Minister of State, Petroleum Resources, Mr. Timipre Sylva, said this on Tuesday morning on a Channels TV programme, while responding to questions concerning the private refineries’ place in the removal of fuel subsidy.
He said: “If you ask yourself why that sector didn’t grow, you will realise that it is a subsidised sector and nobody will invest in such: buy at normal price, refine and sell at a subsidised rate.”
He said it was why investors were not utilising the about 20 valid refinery licences because the numbers were not adding up.
“With deregulation,” he added, “there is renewed interest in private refineries development. Private capital will easily come in and what happened in the communication sector and is currently ongoing in the banking sector will soon be manifest in the oil and gas sector.”
Timeline on refineries’ readiness, capacities
However, Sylva said the two weeks suspension of strike the Federal Government agreed on with labour was not enough to fix the refineries, “but we gave them a clear timeline.”
He said: “Fixing the refineries has been a major problem in the country and this is partly because the refineries could not function optimally and commercially due to subsidy.
“However, with the deregulation, they can now function optimally and commercially to a profitable level.
“We have a timeline for fixing the refineries. We have signed the EPC for Port Harcourt refinery and by next year, it will be 50 percent ready. By ending of 2022, it will be 100 percent read, then we move on to the Warri refinery.
“We have got the funding for the refineries.
“Modular refineries will not be a complete solution to the problem, but we have Dangote Refinery coming; it will produce more that 50,000 barrels a day.
“The Port Harcourt refineries, 250,000 barrels a day; another refinery being planned for same Port Harcourt will produce 100,000 barrels per day, bringing the total capacity to 350,000 barrels per day.
“We also have Warri and Kaduna refineries. By the time we have all these refineries running, we will have enough and can become exporters of the product.”
VANGUARD