BY: ONOME AMUGE
Modular refineries, described by oil experts as simplified petroleum refineries with capabilities of about 30,000 barrels per day, requiring less capital investment compared to traditional full-scale refinery facilities, have been considered essential alternatives towards tackling the challenges impacted by Nigeria’s refined oil importation.
In light of this, the Central Bank of Nigeria (CBN) has been encouraged to establish a N300 billion fund to finance investments in modular refineries to scale down the foreign exchange expended on petroleum products importation.
Ken Ife, lead consultant, industry and private sector development, Economic Community of West African States (ECOWAS) Commission, made the recommendation during the recent 32nd seminar for finance correspondents and business editors held in Akure,Ondo State capital.
Speaking at the seminar themed: “Exchange Rate Management and Economic Diversification in Nigeria: The PAVE (Produce, Add Value and Export) Option”, Ife suggested that rather than use trillions of naira in refurbishing the currently comatose refineries, about N300 billion should be set aside as interventions fund to rev up investments in modular refineries which will lead to disruptions in high import bills for refined petroleum products.
The economist also noted that the lack of local capacity in refining petroleum products has led to huge revenue losses as the crude bye products are lost to foreign refineries.
Sharing the same sentiment, Michael Obadan, a member of the CBN monetary policy committee, remarked that vested interests are preventing modular refineries from seeing the light of the day so the fuel will continue to be imported and the corruption ridden subsidy regime sustained.
Obadan said the government has tried to encourage modular refineries and has given about 75 licences to investors, adding that a good number of them have commenced building, while a few others have commenced production.
Commenting on the challenges affecting operation of modular refineries in the country, he noted that a few in the eastern region are producing diesel but still unable to access crude oil.
Obadan stated that the president has so far encouraged operations of modular refineries but alleged that lower-level officials are sabotaging production efforts.