Dr Ibe Kachikwu who is the minister of state for petroleum resources has revealed that at the moment it was cheaper to import fuel than to produce it in the country.
Vanguard reports that the minister who made this statement in Abuja on March 14 said the country’s refineries needed to be refurbished and upgraded and all pipelines fixed. He said until this is done, it would be economically expensive to refine petrol in the country.
The minister noted that it would make sense if all the refineries undergo full set of repairs and Turn-Around Maintenance but at the moment, importing fuel saved more money.
“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.”
The petroleum minister explained that even if all the refineries were working at 100 per cent capacity, total output would still be 20 million litres of PMS per day which is about 50 per cent of the country’s consumption which means the country will still have to import to make up for the other half.
“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.”
Meanwhile, Kachikwu has revealed that there is dislocation in the economy but expressed optimism in the possibility of improvement.
He said investors are undecided on what to do due to the unstable price of oil in the world market.