NNPC Delays Modular Refinery Approvals, Affecting Crude Supply.
Operators of modular refineries in Nigeria are struggling to secure alternative crude oil supplies due to resistance from the Nigerian National Petroleum Company (NNPC). Despite being Africa’s largest oil producer, Nigeria’s local refiners face significant challenges accessing crude, which should be abundant. Leaked documents and interviews reveal that the state-owned NNPC is slow to approve modular refineries’ efforts to obtain crude oil.
Modular refineries, which require less capital investment than full-scale refineries, are particularly affected. A notable example is AIPCC Energy Limited, which operates the Edo Refinery and Petrochemicals Company Limited (ERPCL). Despite having agreements with Seplat and ND Western since 2022, ERPCL struggles to access crude due to bureaucratic delays. The company has repeatedly communicated with NNPC, highlighting their challenges and requesting assistance, but without success.
ERPCL and other operators report similar challenges, with some alleging interference by powerful figures in the oil sector who oppose in-country refining. The Crude Oil Refinery Owners Association of Nigeria (CORAN) has called on the federal government to support indigenous refiners, as foreign investment in the sector has dried up. Many modular refineries, including those completed, face funding issues due to the uncertainty of securing crude oil supplies.
The lack of adequate local refining capacity has severe economic repercussions. Industries such as agriculture and manufacturing, reliant on diesel and other refined products, face high operational costs due to elevated fuel prices. The National Bureau of Statistics reported a 20% increase in food prices over the past year, largely attributed to high diesel costs, which peaked at N1,800 per litre earlier this year.
In a recent development, the Federal Executive Council approved a directive for the NNPC to sell crude oil to the Dangote Petroleum Refinery and other modular refineries in naira. While this move is expected to enhance domestic refining capacity and lower fuel prices, industry experts emphasize the need for tangible measures to implement this policy effectively.
Share News with us via WhatsApp: 08163658925 or Email: naijaeyes1@gmail.com
Join Our Social Media Channels:
WhatsApp: NaijaEyes
Facebook: NaijaEyes
Twitter: NaijaEyes
Instagram: NaijaEyes
TikTok: NaijaEyes
