IMPORTING PETROL IS CHEAPER THAN REFINING LOCALLY
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has revealed that at the moment, importing Premium Motor Spirit, PMS, also known as petrol, is cheaper than producing the product locally.
Kachikwu said that until the upgrade and repairs of the nation’s refineries are completed, it would be very expensive to refine PMS locally.
He, however, maintained that local refining of PMS would make more economic sense if all the refineries were fully repaired with new construction of more refinery locally.
In his words: “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.”
He 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.”