On Wednesday, the Nigerian National Petroleum Company (NNPC) Ltd. stated that complete deregulation of the downstream sector would increase the country’s domestic refining capacity.
Mr Mustapha Yakubu, Group Executive Director, Refining, NNPC, stated this during a panel discussion at the Nigeria International Energy Summit (NIES) currently taking place in Abuja.
According to reports, the summit’s theme is “Revitalising the Industry: Future Fuels and Energy Transition.”
Yakubu stated that full deregulation of the downstream sector would encourage the construction of more modular and condensates refineries in the country.
He stated that the NNPC was mandated to protect Nigeria’s energy security and would continue to support efforts aimed at increasing the value of the country’s crude oil production.
“We believe there is a need to increase our domestic refining capacity.” That is why the NNPC is undertaking total rehabilitation of our four refineries rather than just Turn Around Maintenance.
“After the rehabilitation is completed, we will have locally refined products.”
“We also have the Dangote Refinery in Lagos coming up, and the Waltersmith Refinery in Imo is already operational.”
Other modular and condensates refineries are under construction, and NNPC is assisting private investors in their development,” Yakubu said.
He urged Nigerians to be patient with the NNPC due to a nationwide shortage of PMS, adding that efforts were being made to resolve the issue.
Furthermore, Mr Tunji Oyebanji, Managing Director of 11 Plc, stated that the postponement of full deregulation of the downstream sector was a significant setback for the industry.
According to Oyebanji, sector liberalization would allow investors across the value chain to earn adequate returns on their investments, which was the goal of the Petroleum Industry Act.
Mr Huub Stokman, CEO of OVH Energy Marketing Ltd., stated that increasing Nigeria’s domestic refining capacity would alter the country’s economic landscape.
He noted that the current problem with petrol scarcity was a clear indication that Nigeria needed a good emergency plan in the future.
According to Mr. Emmanuel Omuojine, Executive Director of Rainoil Ltd., removing petrol subsidies would add significant value to Nigeria’s foreign exchange reserves on a macroeconomic level.
He claimed that deregulation of the sector would increase competition, operational efficiency, mergers and acquisitions, investment incentives, and capital investment inflows.