State of Our Refineries Shameful - Kachikwu

The Minster of State for Petroleum Resources, Dr. Ibe Kachikwu, has stressed the need for the country to immediately address the issues of the refineries and infrastructure deficit.

This call was made at the public hearing recently held by the National Assembly’s Joint Committee on Petroleum Downstream.

Kachikwu decried the poor state of the refineries over the years, saying: “it was shameful that a country after over 35 years cannot produce sufficient fuel for its citizens,….unless we have operational refineries, there will be no permanent solution to the fuel crisis in the country”.

The call by the Minister is consistent with NEITI’s position that the refineries should be privatized for more effective and efficient performance.

For instance, NEITI’s latest independent oil and gas industry audit report covering the year 2015, noted that the refineries’ collective capacity has dropped significantly to 5.6% which is grossly inadequate to meet the national demand.

The report further showed that out of a total 153,918 mbbls Domestic Crude Allocation to PPMC in 2015, a meagre 8,740 mbbls was allocated to the refineries, while Off-shore Processing Allocation (OPA) accounted for 89,067 mbbls, representing 57.87%.

“In 2015, the refineries utilized only 5.68% of the domestic allocation while the rest was either exported or sent for offshore processing”, the report revealed.

The four state-owned refineries located in Port Harcourt, Warri, and Kaduna, have a collective capacity to refine 445,000 barrels of crude oil per day for domestic utilization.

Over the years, these refineries have grossly under-performed owing to failure of government to fix them, leading to all kinds of corruption and inefficient arrangements for refined products importation.

NEITI therefore hopes that with the ongoing efforts on the part of government to fix the refineries and encourage private sector participation, the perennial fuel scarcity and its attendant negative impacts on Nigerians will soon be a thing of the past