Dangote, Port-Harcourt Refineries Will Stop N4trn Subsidy Burden For Nigeria–Fawibe

Duran Fawibe Chairman/CEO, International Energy Services Ltd has expressed optimism that the Dangote Refinery and the Port-Harcourt Refinery will take away the burden of Nigeria’s fuel subsidy when fully operational.

The CEO said this on Tuesday while speaking on the ‘increasing oil theft amid Nigeria’s high cost of fuel subsidy’ on TVC.

Crude oil prices climbed on a record high at around $130 per barrel in March, a price fueled by the Russian-Ukraine crisis.

But Nigeria has not benefited from the proceeds of the high prices as it subsidizes imports of petroleum products.

The Nigerian National Petroleum Company Ltd had requested the sum of N4trn as fuel subsidy for 2022.

In January, the Federal Government announced an extension of fuel subsidy removal by 18 months over the concerns of its impact on the poor population.

The Nigerian government was recently criticised by the World Bank President, David Malpass, during the 2022 Spring World Bank/IMF meeting on the issue of fuel subsidy and forex policy which he described as unsustainable.

But the International Energy Services boss is of the opinion that the government is trading cautiously on subsidy removal to avert a nationwide protest which may complicate current economic and insecurity issues.

The NNPC Ltd began a turnaround maintenance of some of Nigeria’s refineries with $1.5bn budgeted for the 210,000 barrels per day capacity refinery in Portharcourt back in 2021. The refinery is expected to be ready before September 2023.

Africa’s richest man, Aliko Dangote is also commissioning his 650,000 barrels per day refinery in 2022, while the Port- Harcourt refinery will come onboard by 2023.

“We can only give NNPC the benefit of the doubt that after spending the sum of $1.5bn to rehabilitate the refinery, what we will get at the end of the day will be worth the money that has been spent,” Fawibe told TVC Business Nigeria.

He added, “We generally know that the current leadership of the NNPC tends to be very serious and also professional and transparent. They will be able to do a good job.

“If we are able to get the refinery working, that is about 210,000 barrels per day we may not expect the refinery to work at 100 per cent capacity if we are able to get between 85 and 90 per cent capacity. So, that will be turning in about 180,000 barrels of fuel and majorly gasoline and diesel, the importation will slow down.

“When we combine this with what Dangote refinery will be producing, I think there will be a lot of reduction. So, the amount of subsidy that we will be paying on imported fuel will be very much reduced.”

Fabiwa also criticized Customs handling of smuggling of petroleum products

He also addressed the issue of oil theft which is eroding the nation’s treasury.

He added, “One tends to wonder what is happening to state governments, local governments and even the communities- the community leaders. This thing is happening in their various domains. Why should this be happening?

“And we know the problem oil theft has caused to our economy in terms of depriving the national treasury of the money that should accrue as a result of the oil being stolen.”