- FG to Reduce Stakes in Refineries, Oil Assets
The Federal Government has said it will reduce its stakes in Joint Venture oil assets, refineries and other downstream subsidiaries such as pipelines and depots.
The Economic Recovery and Growth Plan, a Medium Term Plan for 2017 to 2020, which was released on Tuesday by the Ministry of Budget and National Planning, stated that the government’s stakes in other oil and non-oil assets would be significantly reduced.
In a bid to increase local production capacity, the government said it would increase the refining capacity to meet domestic demand and become a net exporter of petroleum products by 2019.
According to the plan, the key activities include the conclusion of downstream liberalisation; implementation of new business models for the refineries; and the revamp of the refineries to increase capacity utilisation.
The government said it would encourage private-sector participation through co-location and JV arrangements, and work with the National Assembly to ensure passage of the PIB.
According to the economic plan, Nigeria has four refineries with an installed capacity of 445,000 barrels per day, which operate far below installed capacity.
It stated that the nation had to import $7.83bn worth of refined petroleum products in 2015 alone.
Last year, the National Economic Council, which comprises Vice-President Yemi Osinbajo and the 36 state governors, endorsed plans by the Federal Government to sell some national assets as part of efforts to address the current economic recession in the country.
The sale of national assets was said to be one of the recommendations of the Minister of Budget and National Planning, Senator Udo Udoma, during the NEC meeting.
But organised labour, including the Nigeria Labour Congress, Trade Union Congress of Nigeria and the Nigeria Union of Petroleum and Natural Gas Workers, kicked against the move, warning the Federal Government to reject the recommendations to sell the country’s assets.