The Chairman, Integrated Oil and Gas Limited, Capt. Emmanuel Iheanacho, said the reason many planned refineries have not come on stream many years after their initiation was because of issues bordering on bad business modelling.
Iheanacho advocated an ideal market situation for would-be refiners in the country, saying that was needed to make their businesses profitable and sustainable, as against regulating the market, especially in terms of pricing.
He called on the government to consider a free market economy for the downstream petroleum industry, saying the current situation remained a huge deterrent to operators that are looking to investing in the refining of crude.
Speaking on the current state of refining in Nigeria, the Chief Operating Officer, Refineries, Nigerian National Petroleum Corporation (NNPC), Kragha Anibor, said the country’s refineries are not too old for effective refining operations.
Anibor, at the Nigerian International Petroleum summit (NIPS), during a panel discussion dubbed: ‘Refining, Transportation and petrochemical’, said the major problem of the NNPC to bring the refineries to work was funding adding that government had continued to ensure the best way to manage the refineries.
He said that government would continue to ensure adequate and best agreement with investors for the refineries to ensure the best for the industry.
In the same vein, the Chief Executive Officer, OVH Energy Marketing, Huub Stillman, said that Nigeria was one of the few members of the Organisation of Petroleum Exporting Countries (OPEC) without efficient refineries.
According to him, Nigeria with its location, population and endowment should have efficiently working refineries.
He added: “There have been attempts to regulate the industry in a bid to ensure sustainability and innovative growth. However, there is an urgent need to develop Nigeria’s capacity to refine crude oil locally. This will bring about great financial and socio-economic impact not just on the petroleum industry but also on other sectors of the economy.
“This is even more critical now taking into consideration the costs of crude prices in the global marketplace, which means increase in the amount spent on importation of petroleum products.
“There is no viable refining if we do not talk about deregulation and removing fuel subsidy. As one of the biggest economies in Africa, we can justify the reason to have a viable refining industry. There is need to invest in refinery infrastructure in order to have the capacity to produce clean fuels.”
The Director General, Infrastructure Concession Regulatory Commission (ICRC), Chidi Izuwah, noted that the role of government is to create the enabling environment to attract investors into the sector, by discontinuing its dominance of the downstream segment.