Nigeria Expends N4.69 Trillion On Petrol Import, Demurrage
The Federal Government is expected to save N4.69 trillion yearly from massive importation of petroleum products, as it plans to become a net exporter by end of 2019, according to statistics released by the Federal Ministry of Petroleum Resources.
Besides, the Ministry, which said that no financiers have been selected for the rehabilitation of refineries in the country, disclosed that government plans to formally engage a pool of financiers after cost estimates have been firmed up this June.
The ministry said that 20 million metric tonnes of Premium Motor Spirit (PMS) also know as petrol valued at N3.35 trillion was imported into Nigeria from January to December 2016.
It added that the country spent N1.34 trillion yearly due to shipping and demurrage caused by inadequate port receipt facilities, as indicated in a document detailing Federal Government’s plans to rehabilitate the refineries on Wednesday, made available by the Ministry.
It said the refineries initiative (Big Win 4) seeks to change the current landscape of domestic refining in Nigeria, by setting a target to exit product importation by year-end 2019, adding that this will be achieved through a new strategy that addresses operational and developmental challenges.
The document also indicated that the ministry has concluded arrangement to refurbish the refineries to name plate capacity through the injection of private sector partner financing.
The ministry added that the enabling environment would be created for the establishment of private sector-led Greenfield and modular refineries.
Clarifying on the rehabilitation of Nigeria’s refineries, the ministry said the tender process was truncated in May 2016, following concerns raised by the National Assembly and Bureau of Public Enterprises (BPE).
It disclosed that the Nigerian National Petroleum Corporation (NNPC) engaged BPE and secured alignment to ensure that rehabilitation process would not adversely impact any future Federal Government privatization initiative.
It stated: “Public tender for co-location of refineries was announced in local and international newspapers specifically in Daily Trust Newspaper issue of Friday 15th April, 2016, and The Guardian Newspaper issue of Monday, April 18, 2016. Received bids were analysed and winners for Port Harcourt Refinery Company (PHRC), and Warri Refinery Company (WRPC) were identified. Discussions are ongoing to finalise the process with approval to be given by both the NNPC Board and the Federal Executive Council respectively.