According to the Nigeria Extractive Industries Transparency Initiative (NEITI), the restart of operations at the 150,000 barrel-per-day Warri refinery and the 210,000 barrel-per-day Port Harcourt refinery is a significant step towards establishing economic sustainability and attaining energy self-sufficiency.
These achievements mark important steps in tackling Nigeria’s long-standing reliance on imported petroleum products, the agency said in a statement signed on Sunday by Obiageli Onuorah, acting Director of Communication and Stakeholders Management.
It said that the milestone would lower the soaring expenses related to gasoline imports and have an impact on important economic sectors.
Additionally, it complimented the Nigerian National Petroleum Company Limited (NNPCL) on the gradual restart of operations at the Warri refinery and the successful completion of the first phase of the restoration project at the Port Harcourt refinery.
Recall that the NNPCL was able to operationalise the two refineries that had lain idle for decades in just one month.
Even if it wasn’t running at its maximum potential, this accomplishment was a major turning point because it brought back essential infrastructure that had been underutilised and neglected for a long time.
However, the transparency agency for the extractive industries, which acknowledged the milestone, stated that it will have a favourable effect on Nigeria’s foreign exchange reserves and lower the exorbitant expenses related to gasoline imports.
The statement partially stated, “NEITI recognises that the revitalisation of the Port Harcourt and Warri refineries has the potential to improve energy security, generate employment, boost local industries, and free up vital funds that can be redirected towards national priorities like infrastructure, health, and education.”
According to NEITI’s Industry Reports for the Oil and Gas 2023, under-recovery through pricing differentials (subsidies) has cost N15.87 trillion over 18 years, with 2022 seeing the largest amount at N4.714 trillion.
“In addition, 2022 saw the largest importation of PMS, totalling 23.54 billion litres, whereas 2017 saw the lowest import volumes, totalling 16.88 billion litres.”Importation volumes decreased by 3.25 billion litres (14 per cent) between 2022 and 2023, from 23.54 billion litres in 2022 to 20.28 billion litres in 2023. The announcement that the fuel subsidy would be eliminated is to blame for this.
“NEITI is thrilled that the substantial sums spent on subsidies will now be available to support national development, ongoing national infrastructure rebuilding, and poverty reduction, especially with the current efforts to put the refineries back into operation,” the statement continued.
Additionally, the acting director asked the NNPCL to move quickly on the current rehabilitation of the Kaduna refinery and the second phase of the Port Harcourt refinery.
“This should be closely followed by the Port Harcourt refinery’s phase 1 restoration to optimal capacity in the ongoing rehabilitation efforts,” NEITI said.
“We applaud the NNPCL team’s leadership for carrying out this difficult and demanding task with tenacity, commitment, and unwavering resolve.”
As parties involved in Nigeria’s energy sector, NEITI stated that it is still dedicated to helping NNPCL in its endeavours to guarantee the projects’ long-term viability and to disseminate the accomplishments to partners both domestically and internationally, including the Extractive Industries Transparency Initiative community.
In the interest of the country and Nigeria’s energy security, “NEITI stands ready to collaborate with NNPCL to sustain and expand these gains,” the statement said.
