Sunday, 6 December 2015

Fuel imports increase by 78 million litres

The amount of fuel imported into Nigeria increased to 645.64 million litres in October this year as the total crude oil processed by the country’s refineries in the same month was zero, data from the latest financial and operations report of the Nigerian National Petroleum Corporation have shown.

An analysis of the petroleum products supply and distribution as contained in the report showed that the importation of Premium Motor Spirit or petrol into Nigeria for October increased by 78.04 million litres when compared to the 567.6 million litres imported into the country in September.
Although the increase in volume of imported PMS in the month under review did not address fuel scarcity across the country, the NNPC, however, noted that the products were brought to the country through its Offshore Processing Agreements.
It also stated that the country’s refineries were dormant with respect to the processing of crude oil in October. This was despite the December performance target that was given the refineries by the Group Managing Director, NNPC, Dr. Ibe Kachikwu.
The NNPC noted that the supply of white products, which include petrol and dual purpose kerosene into Nigeria in October 2015 increased to 852.1 million, as against 763 million litres that were supplied in the preceding month.
The report said, “In October 2015, 852.1 million litres of white products were supplied into the country through the OPA arrangements compared with a volume of 763.90 million litres achieved in the prior month of September 2015.
“DPK receipt in October 2015 was 206.46 million litres compared with 196.3 million litres imported in the prior month of September. Similarly, the PMS supply in October 2015 was 645.64 million litres compared to September 2015 supply of 567.6 million litres.”
On refineries’ operations, the NNPC said, “Total crude processed by the three refineries in the month of October 2015 was zero. However, 92,332 metric tonnes of unfinished product was processed which translates to a combined yield efficiency of 78.93 per cent.”
The three refineries include Kaduna Refining and Petrochemical Company, Port Harcourt Refining Company and Warri Refining and Petrochemical Company.
Outlining measures to be taken to ensure that petroleum products were refined in Nigeria, an industry expert, Mr. Dibu Aderibigbe, stated that the government should support the idea of modular refineries.
He noted that individuals and private organisations should be given approvals to refine specific amount of crude oil in order to complement the volume of refined products that were produced by the country’s refineries.
Aderibigbe, who is the National Treasurer, Independent Petroleum Marketers Association of Nigeria, said, “For local refineries to be developed, countries, organisations or individuals can begin to set up modular refineries where about 5,000 barrels of crude or less (or better still, more than that amount) could be refined.
“This will create jobs, have a lot of positive impact on the economy and will save our foreign exchange. Instead of going to import refined products, we will start producing these products locally and may export some to West African countries. But we cannot do that as long as there is subsidy policy that is not working.”
Aderibigbe also stated that the introduction of modular refineries would provide room for competition, adding that this would ensure price stability and create an opportunity for the Federal Government to stop subsidising petroleum products.
He said, “The business would then be run by the forces of demand and supply. When you have a lot of producers in the market, you cannot just jerk up your price. There are fundamental factors that determine price. One is the price of crude oil, the cost of transportation, the refinery cost, marketing cost and other issues.”
The President, Nigeria Association of Energy Economics, Prof. Adeola Adenikinju, told our correspondent that it was in the country’s best interest for the government to revamp the refineries.
He said, “Our refineries have been performing poorly for too long and I think this is the time to get them up and running, because it is in the interest of Nigeria to have the facilities functional now that there is paucity of funds, instead of paying billions as subsidy claims.”
The experts earlier called for the removal and complete halt in the payment of petrol subsidy to oil marketers by the Federal Government.
Adenikinju noted that since the price of crude oil had fallen to as low as $40 per barrel, it was the best time for government to remove subsidy.
The fall in price has provided government the best opportunity to remove the subsidy, he said.

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