Under Buhari, failed refineries cost Nigeria N159bn in 2yrs- Report

Under Buhari, failed refineries cost Nigeria N159bn in 2yrs- Report

- in News, Politics

Civic organization, BudgIT has said Nigeria’s economy suffered a total loss of N159 billion due to failed refineries between 2017 and 2018 during the first term of President Muhammadu Buhari.

BudgIT, in a statement made available to Ripples Nigeria on Friday, said Nigeria’s government-owned refineries in Kaduna, Port Harcourt and Warri incurred a cumulative loss of N32.8 billion in 2017 and N126.2 billion in 2018, making a total loss of N159 billion in the two most recent years alone.

In the statement signed on Thursday by the organisation’s Communications Associate, Shakir Akorede, BudgIT lamented that only one private refinery, Niger Delta Petroleum Resources (NDPR), had commenced operation in Nigeria despite the country issuing over 44 refinery licenses to investors so far – some of them issued since 2007.

It added that one of the 15 licenses, as issued by DPR, had already expired while noting that the only Modular Refinery that had commenced operation was the NDPR which produces AGO (diesel), one of the refined petroleum products that were fully deregulated.

The organisation, however, demanded that the Federal Government under President Buhari should privatise Government-owned Refineries as well as Deregulating the Petroleum Downstream Sector.

It stated, “Moreso, with an average combined refining capacity utilization of merely 8.27% in 2018, the government-owned refineries are consistently unable to meet local demand, putting Nigeria in a precarious situation of importing nearly 91% of locally consumed petrol and significant portions of other refined products used locally.

“On the heels of the foregoing, BudgIT is asking the Nigerian government to deregulate the downstream sector. This will make many stagnating private-sector refinery projects more attractive to investors, we maintain.

“If the remaining 29 refinery projects with active licenses come onstream, Nigeria will successfully unlock refining capacity of nearly 32.7billion litres of PMS per year, 19.6billion litres of Diesel per year and 6.5billion litres of Aviation fuel per year. This is sufficient to meet the country’s refined products needs and also supply the West African market.

“A refinery industry as vibrant as this could generate product sales of nearly N13.1trillion per annum for investors and create additional 439,062 well-paying jobs for Nigerians across the entire value chain, the policy brief says.

It added that the Nigerian government needed to allocate at least 5% of its annual budget to the ministry of petroleum for research and development, especially concerning optimizing the local refining technology in Nigeria.

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