- Attention NNPC: What we need are more local refineries, not mega-stations
Obviously, the Nigerian National Petroleum Corporation (NNPC) does not appear to have a full grasp of the issue with fuel supply in the country, given its emphasis on the building of mega-stations. The impression this conveys, especially as the Buhari government has been silent on plans on new refineries, is that the problem with fuel supply in the country is only about inadequate sales outlets. But this is not so.
NNPC’s group executive director, commercial and investment, Dr Babatunde Victor Adeniran, who led the corporation’s delegation on the expansion of the retail outlets to the Kaduna State Governor, Malam Nasir el-Rufai, believed the project would go a long way to guarantee efficient distribution and nation-wide penetration of petroleum products.
“Our mission is to build three mega-stations in states, one each in the three senatorial districts of the state. We need about 5,000 square metres for each of the stations. Each station will have six pumps, including that of Liquefied Petroleum Gas, which is cooking gas”, Dr. Adeniran told the governor. Similar visits had been paid by the NNPC to Kano and Jigawa states, where the governments had assured the corporation of support.
Unless there is something the Federal Government knows that is not made available to Nigerians, building of more mega-stations cannot be the solution to the perennial fuel shortage in the country. The problem would seem more of supply and that cannot be cured merely by having more retail outlets. The corporation should leave retail outlets in the hands of interested private and corporate individuals. Oil corporations of the NNPC’s status in most other oil-producing countries concern themselves more with serious matters in the upstream sector of the industry. If the government had cause to suspect sabotage on the part of these private entities in the distribution chain, it should have raised the alarm and prosecuted them.
Nigeria’s daily consumption of petrol is put at about 40 million litres. In the best of times, the four refineries in the country can only produce 10 million litres per day. This leaves a shortfall of 30 million litres that has to be met by importation. For decades that the refineries were neglected, they were not able to produce anything near the daily requirement. However, they were said to have achieved about six million litres a day a few months ago, the highest in recent times. This, basically, is where the problem lies. And it explains why we believe the expansion of retail outlets is not the issue. In the periods of acute fuel shortages, even the NNPC stations displayed ‘no fuel’ notices at their entrances.
What must be addressed, as a matter of urgency, is the supply side. This is much more so now that the government has technically removed fuel subsidy. Subsidy was a creation of fuel importation, which is an aberration in a major crude oil producing country. Unless the government is praying for a situation where oil prices would be down for long or even forever, it should begin to address the issue of local refining of fuel for Nigerians not to be asked to pay high price for fuel whenever crude prices begin the upward swing again.
The least that is expected of the Federal Government and the NNPC is for them to initiate a programme on local refining of fuel immediately. Unfortunately, it has not even mooted anything along this line, not to talk of begin to work towards its actualisation. If eight months after assuming office the Buhari administration is not saying anything about local refining of petrol, then it is yet to diagnose the problem properly.
With eight months into the government’s tenure, time is fast running out since we cannot build refineries overnight. The government should give Nigerians a programme of action on how to address the supply gaps with local refining of petrol. Otherwise, it would not have done anything to ameliorate the fuel challenge.
