Revamping Local Refineries Could Save N70 per Litre Off Petrol Price, Marketers Urge Government Action

Oil marketers in Nigeria are calling on the government to prioritize the revival of local refineries as operational local refineries could save at least N70 per litre off the petrol price, according to Mike Osatuyi, the National Controller Operations of the Independent Petroleum Marketers Association of Nigeria.

Speaking on Wednesday, Osatuyi stated said the contracts for revamping the refineries had already been awarded, but it was crucial to expedite repairs to alleviate the burden of fuel importation on the country’s finances.

“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,” said Osatuyi.

Apart from cost savings on petrol, the operational local refining could also lead to a reduction in insurance expenses and product delivery time while simultaneously generating employment opportunities.

Tunji Oyebanji, the former Chairman of the Major Oil Marketers Association of Nigeria and Chairman/Chief Executive of 11 Plc, expressed his support for local production over product importation.

“We want local refineries to work because we don’t enjoy importing,” Oyebanji stated.

Nigeria currently relies on petrol importation due to the lack of functional local refineries. However, after the removal of subsidies on May 29, petrol prices skyrocketed from about N198/N200 per litre to N617 per litre, leading to a 30% drop in local consumption.

To address the issue, Chinedu Okonkwo, the National President of IPMAN, proposed the adoption of the global alternative clean energy concept of Compressed Natural Gas (CNG) as a solution to the challenges posed by the increase in petroleum products’ pump price. Okonkwo argued that CNG could power homes, public and private establishments with minimal costs compared to other alternatives.

The call for functional refineries highlights the urgent need for the Nigerian government to invest in its energy infrastructure, which could have significant economic and social benefits for the nation.