Refineries Owners Association Suggests How FG Can Bring Down Petrol Price

The Crude Oil Refinery Owners Association of Nigeria (CORAN) has suggested ways the Federal Government (FG) can absorb the plight of Nigerians following the removal of fuel subsidy.

The fuel subsidy which was serviced with the sum of N400 billion monthly was stopped by President Bola Tinubu during his inauguration.

The announcement by the president led to an increase in the prices of petrol across the 36 States and the Federal Capital Territory (FCT).

The chairman of CORAN, Momoh Oyarekhua, said that about 40 modular refineries have been licensed but only five are operational.

A modular refinery is a simplified refinery requiring significantly less capital investment than traditional full-scale refinery facilities

Oyarekhua during a monitored interview on Arise TV said the modular refineries needed to be stimulated through intervention funds.

He said “The government needs to stimulate the modular refineries, through fund intervention, to enable the accessibility of Petroleum Motor Spirit (PMS) in the market.

“Over time we have advocated that crude should be sold to modular refineries in naira because this product when processed will be sold in Naira and into the Nigerian market, so, our income is in naira.

“Through this means field stock should be in sold naira, so we do not overcrowd the foreign exchange market. But if for any reason, any modular refinery exports any of its crude, it should pay for every aspect of the exported crude in US dollars.

“The reason why most modular refineries don’t have PMS is because it is very expensive. So, what we are saying is that there should be some type of intervention funds.”

The CORAN Chairman alleged that it has been difficult to get funds from the Central Bank of Nigeria (CBN), adding that this has affected the actualization of producing 14 million liters of PMS monthly since 2021.

He added that the government should just be a regulatory body, and allow the private sector to take over the PMS sector. This, according to him, will bring more efficiency to the sector.

“Privatization of the refinery is the best way to go. So, the cost of refining one barrel of crude which is equivalent to three dollars, is minimal, the cost of running modular refineries is far less than the cost of running a conventional refinery, in this area we save cost, the less the cost of production, the cheaper the product” Oyarekhua said.