The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, has said that importing petrol, at the moment, is cheaper than producing the product in refineries in Nigeria. Petrol, also known as Premium Motor Spirit, PMS, is very useful in powering internal combustion engines mostly in vehicles and generators. The product is generated from crude distillation and consists of organic compounds and additives that enhance engine performance. Currently, petrol is one of Nigeria’s most sort after product, as it is low in supply and sold at a ridiculously high price.
Mr. Kachikwu in his address speech to newsmen in Abuja, said that until the refineries have been upgraded and totally refurbished, and pipelines are fixed, it will not be cost effective to refine PMS locally. He maintained that although local refining of PMS would make more economic sense if all the old refineries undergo full set of repairs and Turn-Around Maintenance, and new ones are set up in the country through co-locative initiative.
“Most modern refineries are configured in such a way that your stock of PMS outage is a lot higher, 70 to 80 per cent. So when we do import the product, we actually save money; we get it less expensive than when we do it here. But having said that, the reality is that until we have alternatives in terms of co-locative refineries which we are looking at; until we finish the total refurbishment to improve and upgrade the refineries, it does not make sense to use it with some of the deficiencies.
“This is because distribution is key. If you have product in Kaduna for example, pumping into the north becomes easy as opposed to moving, as we do whenever we have a crisis – trucks all the way from Lagos and Oghara, out to the north.”
Kachikwu further noted that even if the current set of refineries were working on a 100 per cent basis, they would only be able to account for 20 million liters of PMS per day, about 50 per cent of the country’s total consumption. This means that the country would still resort to importation to meet up with the shortfall.
“The way the refineries are configured right now, and until a full set of repairs and TAM are done, they are configured on the basis of 50 per cent of PMS and 50 per cent other products. So even if they were producing on a 100 per cent basis, which they are nowhere near producing right now, PMS output would be less than 20 million litres. Our consumption is closer to 40 million. So we will still have, literarily, 50 per cent gap.”