Local Refining Will Reduce Petrol Price By N70/ltr – Marketers

Oil marketers have emphasized that the full operationalization of local refining could lead to a significant reduction of at least N70 per liter in petrol prices.

Mike Osatuyi, the National Controller of Operations of the Independent Petroleum Marketers Association of Nigeria (IPMAN), discussed the advantages of the Federal Government’s investment in functional refineries. In an interview with The PUNCH on Wednesday, he stressed the importance of promptly completing the refinery revamping contracts that have already been awarded. This action is crucial to alleviate the burden and substantial financial strain caused by fuel importation on the country.

Osatuyi stated, “The contract has been awarded already before the new government came into office. IPMAN doesn’t know the context of the contract, but if the refineries are working, it would cut freight and ship-to-ship transfer costs. Not less than N60/N70 per litre will be off if the refineries start working.”

He outlined further advantages of operational local refining, including a decrease in insurance costs, shorter product delivery times, and an increase in employment opportunities.

Osatuyi explained, “Cost of insurance would reduce, and then if we keep importing, it takes about 30 days for ships to arrive in Nigeria and we would have to pay for hiring the vessel. But if we refine in the country, products would arrive within one day. There will also be more jobs for the masses. It’s a lot of benefits.”

Tunji Oyebanji, a former Chairman of the Major Oil Marketers Association of Nigeria and Chairman/Chief Executive of 11 Plc expressed that marketers do not prefer product importation over local production. He affirmed, “We want local refineries to work because we don’t enjoy importing.”

Due to the lack of functional local refineries, Nigeria heavily relies on petrol imports. Since the removal of subsidies on May 29, petrol prices have surged significantly, skyrocketing from around N198/N200 per liter to N617 per liter.

In the wake of the subsidy removal, daily local consumption has dropped by 30 percent from the previous 66 million liters per day.

Chinedu Oknokwo, the National President of IPMAN, highlighted the importance of adopting alternative clean energy solutions, particularly Compressed Natural Gas (CNG). He addressed this during the House of Representatives Public Hearing held on Tuesday. Oknokwo emphasized that CNG could effectively power homes, public facilities, and private establishments with minimal costs compared to other energy sources.