The Managing Director (Downstream), Aiteo Group, Mr Ewariezi Useh has said that modular refineries sprouting in different parts of the country cannot be relied on to meet fuel demand in the country.
Useh who made disclosure during the just concluded Nigeria Oil and Gas (NOG) said modular refineries lack the capacity, adding that it basically produce diesel and kerosene while Nigerians consume more petrol than diesel. He explained that having the module that produces gasoline would require some significant investments.
According to him, “I do not see modular refineries as a permanent solution. The capacity is often 5,000 or 10,000 bpd and the products you get from it are basically diesel and kerosene.
“However, if you are to get petrol from a modular refinery, you would need to have Fluid Catalytic Cracking (FCC) unit attached to it, which is way expensive and only a few people can put that kind of fund down today.
“The issue today is that for us as a country, we consumed more of petrol, from your small generator ‘I better pass my neighbour’ to your car. So, modular refineries are not the final solution,” he insisted.
Speaking on the way forward, Useh proposed that government should have the right policies in place and the right environment that would attract the much-needed investments in refineries, stressing that the country’s refineries were not enough to meet the country’s fuel demands.
“Painfully, our refineries are not functional. They are old and even if we have all of the refineries working, their total capacity is 410,000 barrels and Dangote is putting on 650,000 barrels. Those refineries were built in the 1960s and the newest of them all is the Port-Harcourt refinery. They are not enough to meet the demand of our 200 million people.
“We need favourable policies that can attract investors to come in and build refineries and see how the old ones can be revamped and put together. We are the only OPEC country still importing petrol and the situation doesn’t look good.
Speaking further, he said the harsh business environment remains a problem that repels investment, leading to a lot of multinationals’ divestment, asking “will you invest in a place where you are not sure of your returns? The answer is no. It is simple because every investor wants a return and guaranteed investment as well. There is no attraction in the downstream business in Nigeria.
“These are things we hope that will eventually be when the PIB is signed into law because it will define clearly the regulation for the industry where there will be a clear cut margin. A refiner looks forward to his refining margins. He needs to know what his refining margins are and he is sure of his returns. If the environment is friendly, then investors will invest.