Restart Refineries to Ease Rising Fuel Prices—PETROAN

By Adedapo Adesanya

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has called on the federal government to urgently restart the country’s government-owned refineries, saying increased domestic refining is the immediate approach to addressing the recent rise in fuel prices.

PETROAN’s National Public Relations Officer, Mr Joseph Obele, made the call in a statement, stressing the need for the government and the Nigerian National Petroleum Company (NNPC) Limited to maximise available refining capacity.

Mr Obele said reviving the government-owned refineries would help increase domestic petroleum product supply and reduce pressure on prices.

“The immediate approach to the recent rise in petroleum prices is to restart the government-owned refineries,” he said.

The association’s position comes despite concerns over the huge amount of public funds previously committed to rehabilitating the facilities.

Nigeria has reportedly spent about $25 billion on turnaround maintenance of its government-owned refineries over the past 25 years, with the facilities recording prolonged periods of inactivity.

An NNPC audit report published in 2020 showed that three of the country’s four refineries accumulated N1.64 trillion in losses between 2014 and 2018.

The report also showed that the refineries incurred N10.23 billion in expenses in June 2020 despite processing no crude oil during the month, as rehabilitation activities and operational costs continued.

The Port Harcourt and Kaduna refineries recorded combined losses of N208.6 billion in 2014, which increased to N252.8 billion in 2015, N290.6 billion in 2016, N412 billion in 2017 and N475 billion in 2018.

Nigeria’s government-owned refineries include the Port Harcourt Refining Company, which has a combined refining capacity of 210,000 barrels per day; the Warri Refining and Petrochemical Company with a capacity of 125,000 barrels per day; and the Kaduna Refining and Petrochemical Company, with a capacity of 110,000 barrels per day.

PETROAN’s call comes amid renewed concerns over rising petroleum product prices and the impact of higher fuel costs on businesses, transportation and household expenses.

Business Post reports that petrol sells for around N1,380 in some parts of  Lagos and as much as N1,500 in other parts of the country.

The association maintained that restoring the government-owned facilities would provide an additional source of refined products and strengthen domestic supply.

It also urged the government and NNPC to ensure that the refineries, once restored, operate efficiently and sustainably to justify the significant investments made in their rehabilitation.