The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said that as it stands, importing Premium Motor Spirit, PMS, also known as petrol, is cheaper than producing the product in the country’s refineries.
Addressing newsmen in Abuja, Kachikwu disclosed that until the upgrade and total refurbishment of the refineries are concluded, as well as ensuring that the pipelines are fixed, it would be uneconomic and very expensive to refine PMS locally.
He stated that refining petrol locally would be fiscally sensible if and only all the refineries undergo full set of repairs and Turn-Around Maintenance (TAM). He also postured that new refineries would have to be set up in the country through co-locative initiative.
He said: “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 Minister of State Kachikwu said even in a scenario where the current set of refineries were working on a 100 per cent basis, they would be able to satisfy but 20 million litres (50%) of the nation’s demand for PMS.
What this translates to is that the nation would have to continue to import in the meantime.
Kachikwu said: “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.”