Nigeria to continue importation products for the next 20 years- Petroleum Minister.

Minister of Petroleum Resources, Mrs.
Diezani Alison-Madueke
Nigeria and other African countries will
continue to be net importers of petroleum
products despite the availability of functional
and quasi-functional refineries, and plans to
build more refineries on the continent, the
Minister of Petroleum Resources, Mr. Diezani
Alison-Madueke, has said.
According to her, plans to build more
refineries in Angola, Uganda, Mozambique
and Nigeria cannot change the situation.
Alison-Madueke spoke at the eight edition of
the Oil, Trading and Logistics (African
Downstream) Expo held in Lagos on
Tuesday.
“Notwithstanding the possibility of building
new refineries in Africa, including new
projects in Angola (Sonaref refinery); Uganda
(Uganda oil refinery); Mozambique (Nacala
refinery); and Nigeria, among others, Africa
will remain a net importer of petroleum
products for at least 20 years to come,” she
said.
The minister, however, pointed out that
Nigeria was already on the path to adding
more capacity by 2020 through the proposed
private refineries by the Dangote Group and
Orient, and Bayelsa, Kogi, and Lagos states,
among others.
Alison-Madueke, who was represented by the
Deputy Director, Gas, Department of
Petroleum Resources, Mr. Oliver
Okparaojiakor, said sub-Saharan Africa was
the least sophisticated refining centre in the
world.
She said, “In fact, there are only 24fuels
refineries within the region, with a total
refining capacity of 1.6 million barrels per day
for a population that is close to a billion.
Population growth means more energy
consumption.
“However, the uncompetitive and inefficient
nature of many of these refineries, combined
with the difficulty in funding major upgrades,
or new capacity, seem likely to keep the
average utilisation at a low level in the short
term.
“The implication of population growth for
Africa is that demand for petroleum products
will continue to be on the rise without
commensurate refining capacity addition.
There is an urgent need to encourage
investors to partner with national oil
companies or privately to build more
refineries, and for us to be less dependent on
imports.”
On petroleum products subsidies, the
minister said the stunted growth of the
downstream sector was attributable to the
distortion introduced to the market as a direct
result of the regulated regime in some sub-
Saharan African countries, adding, “There is
a need to eliminate this convoluted price
subsidy and stimulate competition across the
value chain.”
The issue of subsidy, she explained, could
not be over flogged, as according to the
World Bank, subsidy on petroleum products
in Nigeria and other oil-producing African
countries would be unsustainable in the
medium term.
Alison-Madueke said heavy subsidy was an
unsustainable expenditure even on the long
term, as it generally promoted energy
inefficiency and imprudent consumption.
Over the last 10 years, she said Nigeria had
taken important steps towards a more
deregulated downstream, adding that to
provide a competitive market environment
and sustain supply, the downstream sector
should be fully deregulated.
Similarly, the Executive Secretary, Petroleum
Products Pricing Regulatory Agency, Mr.
Farouk Ahmed, said activities in the
downstream sector had facilitated a net inflow
of investment in excess of N60bn.