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Nigeria’s effort to boost its refining capacity seems to be paying off, as petroleum product retailers signed a deal with three oil companies to establish a 50,000 barrels per day capacity refinery.
On Wednesday, the Petroleum Products Retail Outlet Owners Association of Nigeria signed an agreement with Claridge Petroleum Company Ltd, Oasis Petrochemical Products Limited, and Afrintech.
The National President of PETROAN, Billy Gillis-Harry, told our correspondent exclusively that the agreement was signed to give Nigerians affordable fuel.
According to him, the refinery would be sited in Akwa-Ibom State.
Gillis-Harry told The PUNCH that PETROAN had earlier signed a deal with the three companies to import “cheaper fuel” into the country.
It could be recalled that the association said in November that it would import and sell PMS below the cost offered by the Dangote refinery and the Nigerian National Petroleum Company Limited.
However, Gillis-Harry said the import agreement had been cancelled for the establishment of a refinery.
This, he said, became necessary following an agreement signed by stakeholders to end fuel importation.
“On Wednesday, we were with Claridge, Oasis, and Afrintech. The meeting went very well because we are using the benchmark of pricing for affordability as a basis.
“The deal is that we have requested for them to not import for us but to set up a refinery in Nigeria and they have agreed to that. So within the period that the process will be, they can be importing only diesel for us and maybe base oil; but PMS, we must have to do that locally.
“And that is giving us a guarantee of what is a very sweet deal for Nigerians. We have requested for the Federal Government to give us N100bn to be set up as an energy bank of Nigeria just like the Bank of Industry or the Bank of Agriculture, so that we can be able to assess money to be in the downstream business for a single-digit interest loan.
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“For that reason, we do not want to discuss imports on PMS. We can discuss import on other products that have been fully deregulated,” he stated
The PETROAN leader disclosed that the companies have agreed to fund the refinery while the retailers have assured of being their off-takers.
He noted that the transactions and final agreements could take up to one or two weeks.
He revealed that PETROAN would be in control of the products that would come out of the refinery.
“We want them to set up a refinery. We have agreed to set up 50,000 barrels for the refinery in Akwa Ibom. We are working on it. We have not completed the transactions. It may take another week or two weeks, but we are continuing the meeting and we’ll see how this goes. We have cancelled importation because we signed the stakeholders’ agreement that says fuel imports should stop.
“So, if the import is stopping, there is nothing that we can do than to follow through with them and they are happy to see an organisation that is well organised like PETROAN and which will guarantee their off-taker. So that’s why they are now coming in to sign this agreement with us and PETROAN will fully be in control of the products that come out of it. So we’ll be working and benchmarking every pricing to make sure that Nigeria gets affordable petroleum products that will meet the needs of the ordinary man in Nigeria and I think that’s what PETROAN should be applauded for,” he stressed.
Asked to speak on the huge resources required to build a refinery, he replied, “They are going to fund it themselves. Ours is to bring our capacity as retail outlet owners to partner with them to give a guarantee to off-take products.
“How do you like that kind of transaction? It teaches you that PETROAN is forever on the front burner to ensure that Nigerians have a better deal. While this refinery comes to stage it may take three years, it may take five years, but when it comes on stream the conditions we are signing today are futuristic and they must be kept to that agreement.“
Reacting to the perceived bottlenecks in getting approvals for a refinery, especially as it has to do with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Gillis-Harry said there are no bottlenecks.
“We have no problem with the NMDPRA. NMDPRA does not give any bottleneck of approval. When you come, you show your qualifications. If you meet the right conditions, NMDPRA will give you a licence. And I want you to quote me in the report that NMDPRA has never stopped anybody from getting licences for refineries. All we need to do with our partners is to make sure that they qualify,” he submitted.
Currently, the Dangote refinery and the Port Harcourt refinery produce petrol, diesel and kerosene. The Warri refinery and other modular refineries are producing diesel and kerosene.