Nigeria spends about $15bn on fuel import yearly when new refinery costs less
More ironies in the way and manner on which the nation runs its oil industry have emerged.
Whereas the country is spending about $15billion yearly on fuel importation, industry experts have argued that a brand new refinery with higher output can be installed with less than the total amount used in importing fuel for domestic use.
According to Engineer Bala Sakah, an Energy Consultant, setting up of refineries with latest technologies at a cheaper amount to the cost of importing fuel yearly will pay Nigeria better if corruption can allow that to work.
He said with less than the said amount, the country can effectively set up refineries that can track back the yearly fuel expenditure of $15bn to the economy.
It would be recalled that issues of corruption have been the key problem frustrating the effective turnaround maintenance of all currently near moribund refineries.
Recent move by the Nigerian National Petroleum Corporation (INNPC) to seek for additional $1.8bn for repairs of the facilities failed at the National Assembly as not so convincing answers to questions asked by lawmakers’ forced national Assembly to put on hold any form of allocation for repairs of the facilities in 2018 budget.
The scenario therefore left the Corporation with no other option than to be scouting for deep pocket investors to partner in the revival of the refineries.
For now, no credible investor has been found and NNPC did not make public terms and condition attached to the planned private sector collaboration in the repairs of the existing refineries.
Details on the cost of importing fuel on a yearly basis were recently given by the Group Managing Director of the Corporation, Dr Maikanti Baru, who disclosed that Nigeria spends between $12billion and $15billion yearly to reduce the deficit in daily domestic fuel consumption in the country.
He said the Nigeria’s resort to fuel importation became imperative in order to improve supply and avert scarcity, stressing that “The development poses serious threats to the government’s dwindling revenue, if left unchecked”.
Baru averred that the country’s dwindling fortune was caused by the fall in the international prices of crude oil , adding that the Federal Government is investing in additional refinery capacity alongside private investors, who have demonstrated their readiness to hold some equities in the project.
Continuing, he added that “To reduce the huge cost expended in importing fuel into the country, especially the money that is being spent in reducing deficit in the supply of the product, the government is investing in refinery capacity, alongside companies that are holding some equities in the refinery project”.
He argued that through this means, the government would be able to meet the country’s gasoline consumption of 36million litres per day and 10 million litres of kerosene per day.
