Govt promises end to petrol import in 2017

by Editor

September 26, 2013 | 1:00 am
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The Federal Government will in 2017 stop the importation of petroleum products into the country. President Goodluck Jonathan, who was represented by Olusegun Aganga, minister of trade and investment, disclosed this at the African Business Roundtable in New York, United States, on Tuesday, saying crude oil would be processed and turned into finished goods through an integrated industrial complex that would be set up and driven by the private sector.

The event afforded Jonathan the chance to speak to international investors about the various investment opportunities that are available in the country. He said the focus of the government was to industrialise the country and assured the investors that their investment would be secured.

Nigeria, according to him, has one of the best incentives in the world because foreign investors can repatriate their dividends after paying the necessary tax to the relevant authorities.

The president stated further that everything possible would be done to ensure macro stability and enhance infrastructural development and political stability in the country.

Although the president did not disclose how the integrated industrial complex would work, sources close to the presidency say the government is going to leverage private sector investors, like Dangote, who are planning to build refinery, fertiliser and petrochemical companies in the country. The public-private partnership would ensure that the planned integrated industrial complex would process the country’s resources into finished products, which will create more jobs and revenue for the country.

For him, countries that depend on export of raw materials only to buy them back as finished goods are never developed. To this end, he expressed his commitment to seeing Nigeria optimally utilise its crude oil and get the necessary derivatives.

“I repeat, Nigeria would no longer import petroleum products by 2017,” he said.

According to the president, the true potential of the Nigerian market was yet to be realised, but there were plans to address issues that had been militating against the development of the market.

Nigeria, Africa’s top oil producer, has four refineries with a combined capacity of around 445,000 barrels per day (bpd) or 70.75 million litres per day, but they operate well below full capacity owing to decades of mismanagement and corruption. The country imports much of its refined fuel demand at world prices, which is then sold to the domestic market at a discount. Nigeria currently spends about $30 billion annually on importation of petroleum products.

In 2009 and part of 2010 particularly, low refinery runs forced the country to import about 85 percent of its fuel needs. In 2011, the operational capacity at refineries averaged 24 percent, slightly higher than the 22 percent in the previous year, according to Energy Information Administration, the statistics arm of US Energy Department.

Other steps the president said would be taken are to continue to ensure fiscal discipline which has brought the economy to relative stability, promote linear and easier economic policies, and review all business laws in the country.

Aliko Dangote, president of the Dangote Group, in his contribution, said that about 8,000 engineers would be needed for the smooth take-off of the $9 billion refinery/fertiliser/petrochemicals complex in Ondo State, adding that the group had secured a $3.3 billion credit facility from a consortium of banks for the project.

According to him, importation of petroleum products would end by 2016 as the 400,000-bpd capacity refinery would commence production in the next three years, adding that their plan was to make the country self-reliant in petrochemical and petroleum products, as well as an industrial giant.

“Now, Nigeria is going to be taken out of the list of countries that import petroleum products. We will produce 20 million metric tonnes which is equivalent to what Nigeria consumes currently,” Dangote said.

The proposed complex, according to him, would make Nigeria a net exporter of petroleum products, including diesel and aviation fuel, as well as polypropylene and fertiliser.


by Editor

September 26, 2013 | 1:00 am
  |     |     |   Start Conversation

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