The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has announced that not less than 25 licences, given to private operators between 2002 and 2014 to build refinery complexes in Nigeria that have remained inactive will be revoked.
Kachikwu, who said this while hosting a group of online news outlets in Abuja, said that this decision is part of its ongoing efforts to sanitise Nigeria’s downstream petroleum sector.
He however noted that those who had crossed certain acceptable operational thresholds would be allowed to go on with their works.
He said: “The next stage of this is that we are going to look at all the licences that have been given out; some of them were given a window within which to build their refineries and we are going to revoke the ones that were not used.
“The reason they did not use the licences is that unless the price is right on the outer point, your economics cannot balance. So, no refinery investment in the world comes to a country where there is no liberalisation and it is not just Nigeria because if you don’t liberalise, nobody is going to invest in your refineries.
“So, that is why they did not, a lot of them thought it was nice to have licences but as soon as you move into the capital market and you do your analysis, you realise this.
“The more the government gets out of some of this private sector businesses, the less you have discretionary allocations of this or that to people.
“We have advertised for three already; the co-located ones, but this time we are going to be very rigorous in giving out licenses.
“You are going to show us the kind of financial model already in place and guarantees that you have the funding to do it, but we will also be helping them by doing what we can, by making sure that they get products at the right prices,” Kachikwu stated.