9th April, 2020
Senator Ita Enang has said that the federal government will legalise modular refineries in the country.
The Senior Special Assistant to the President on Niger Delta Affairs said that his office had, over some time, engaged some artisanal (illegal) oil refiners in the Niger Delta region and had seen the need to legalise their operations.
According to him, some of the artisanal refiners can produce chains of petroleum products and supply them for consumption in the country.
He said; “They might not produce much to feed Nigeria and neighbouring countries, but there are refineries in neighbouring countries we take our crude oil to, for refining.
“We pay to export and import, and there are still subsidy elements in it. By the time you engage these persons, they will just be producing for you. You do not pay for import or export, you do not pay any of the port authorities’ charges unless you transport the products by sea.
“By so doing, you will be improving their capacity and you will bring down the cost of refined petroleum products drastically. So, there will be no element of subsidy,’’ he explained.
“Whether you sell your crude oil or not, it is a charter agreement, unless you offload or evacuate your goods from the vessel, you are still paying for hiring the vessel.
“The cost of hiring the vessel will sometimes even be more than the cost of the product on the vessel, so you return a zero or even a negative profit. That is whether you sell or not, the days you hire can even be higher than the cost of the commodity.
“Therefore, Nigeria and Nigerians have to consider this and come to an agreement to boost local refining,’’ he said.
“Nigeria’s refineries have been posting losses of more than N300 billion for some years, according to the reports of the NNPC and NEITI. We believe that if there is no more subsidy payment, these refineries will, on their own, start working.
“This is because they will know that they have no other choice and no other job, and no subsidy will come for the payment of their salaries and earnings when the refineries have not worked and when they have not refined petroleum products.
“Worst of all, the world is moving away from petroleum products, green energy and other things are challenging the Nigerian economy. The cost of production of oil keeps rising.
“The amount at which we now sell crude oil may go lower than the cost of production; that means Nigeria will not earn anything in the course of it, forcing us to go for other alternatives to sustain the economy,” he said.