Stakeholders in Nigeria have called on the federal government to take immediate action to reactivate the country’s ailing refineries and make them functional. Despite having three refineries with a combined capacity of 445,000 barrels per day in Port Harcourt, Warri, and Kaduna, Nigeria has been heavily reliant on imported refined petroleum products to meet domestic demand. This dependence on imports has put pressure on the Nigerian Naira and the country’s foreign exchange reserves.
The foreign exchange pressure has led to fluctuations in the Naira’s exchange rate, with concerns about further depreciation causing fuel queues at petrol stations and concerns about potential price increases. The Nigeria Extractive Industry Transparency Initiative (NEITI) recently reported that Nigeria spent N13.7 trillion on fuel subsidy from 2005 to 2021.
To address these challenges, stakeholders, including the Petroleum Products Retail Outlets Association of Nigeria (PETROAN) and the Future Nigeria Movement (FNM), are emphasizing the urgent need to revamp the country’s refineries. The president of PETROAN, Mr. Billy Harry, stated that the turnaround of the refineries would provide a sustainable solution to the energy crisis, reduce the need for massive petrol imports, and stimulate the economy.
PETROAN advised against relying solely on private sector-led investments in refineries, noting that some promises of timely petrol delivery have not been fulfilled. They highlighted that the volatile foreign exchange rate has impacted marketers’ ability to restock and import petrol, leading to supply shortages.
The FNM echoed these sentiments, emphasizing that reviving the state-owned refineries should be treated as a national emergency. They called on the government to focus on curative measures, such as revitalizing the refineries, rather than offering palliatives for the impacts of subsidy removal.
The consensus among stakeholders is that by making the refineries operational, Nigeria can reduce its reliance on imported petrol, ease the pressure on the Naira and foreign exchange reserves, and ultimately enhance the nation’s energy security and economic stability.