Subsidy hobbling investors’ in refining as daily fuel usage jumps to 56m litres
Happenstances in the nation’s downstream petroleum sector seem to be disproving every known economic and investment principles. This was the submission of leading industry analyst, Dr Bala Zaka in an interview.
He said with the huge market for refined products where the nation’s refineries are moribund, what is holding back investors remains fears of policy inconsistency on the side of the government who again, is calling for investors.
He said investors whether indigenous or foreign are business minded people and are very careful in putting their monies on the line over fear of back and forth attention given to Petroleum Industry Bill (PIB) which ordinarily would have provided the needed leeway and leverage for every investor.
Like Zaka, other industry pundits had continued to blame the government for inability to work with the National Assembly to deliver on record time, the PIB which would serve as the ground norm for investments in the sector.
Analysts say it will be very hard for investors in modular refineries to put their money until they have seen the clear direction of the government in the endless legislation for PIB.
Observers say what is delaying massive investments in refining is the fear of controlling fuel price rather than allowing market forces to determine as was done in the telecoms sector following the liberalization in 2001.
Recall that the Petroleum Product Pricing Regulatory Agency (PPPRA) has put the country’s daily supply of Premium Motor Spirit, otherwise known as petrol, at 56 million litres.
PPPRA statement issued weekend in Abuja by the Executive Secretary, Abdulkadir Saidu, disclosed that daily supply of petrol in the country grew from 46 million litres per day in 2017 to 54 million litres in 2018 before peaking at 56 million litres in 2019.
Saidu said “Thus, PMS average daily supply for the year 2017, 2018 and 2019 are about 46 million, 54 million and 56 million litres respectively. These indicate an improved level of supply in 2019.”
