The Nigerian Midstream and Downstream Petroleum Regulatory Authority and oil marketers have stated that once the Warri Refinery and Petrochemicals Company Limited begins operations, the prices of refined petroleum products will continue to decline.
Downstream oil dealers predicted that competition would increase as domestic refiners would have to lower their prices to attract buyers.
They made this claim on Monday after the Nigerian National Petroleum Company Limited, NNPCL, declared that the 125,000 barrels per day WRPC in Delta State had started up.
Additionally, in exchange for foreign cash, NNPCL stated plans to start exporting locally refined products to other nations.
The development occurred just one month after the Port Harcourt Refinery in Rivers State, which has a capacity of 60,000 barrels per day, began operations.
NNPCL Group Chief Executive Officer Mele Kyari clarified during a facility visit on Monday that the purpose of the inspection was to demonstrate to Nigerians the extent of the work that has been done thus far.
While the facility’s repairs were not yet finished, Kyari told a tour team that included NNPC Board Chairman Pius Akinyelure and NMDPRA Chief Executive Officer Farouk Ahmed that refining operations had started and would concentrate on producing straight-run kerosene, diesel, and naphtha.
In a statement commemorating the milestone, President Bola Tinubu noted that the facility is currently working at 60% capacity or 75,000 barrels per day.
“We are showing you around our plant,” Kyari remarked. This plant is operating. We are still in the process, even if it is not quite finished. Many believe these items to be unreal. They believe that in this country, nothing is possible. Let us show you that this is real.
Since some of these goods would be shipped to foreign markets, he said, the restart of the Warri refinery would help the country become a net exporter of petroleum products.
“Secondly, there were three stages to this facility. We have begun the first, which we refer to as Area One. It can create naphtha, kerosene, AGO (diesel), and a mixture of crude oil. These are high-quality products that the nation needs, and we might have to export them. Thus, this will provide us with cash, this business will generate revenue, and the President’s pledge that our nation must be a net exporter of petroleum products is now being fulfilled. International markets will see the introduction of several of these products.
“The President believes we can get this to work and get them to start, and he gave us the order to start all three refineries. That’s the most essential thing I can say.
“Area One of the Warri refinery is already operational, and we have begun construction on the 60,000 barrels per day refinery. In addition to coming to life, other plants that would cause PMS are being webcast.
“Finally, the refinery in Kaduna is also operational. We won’t tell you a specific date, but Kaduna will begin operations, and we will surprise Nigerians like we did the other day. We express our gratitude to the President for his unwavering support. I have to commend our crew for their tenacity and strong conviction that this nation can restart this plant. Working together with our contractors and our whole crew has produced this outcome.
“It is conceivable to restart a plant that you have purposefully shut down, and for that, I am grateful to them for creating history. He continued, “We have demonstrated that it is possible.”
The competition in the downstream oil business is now likely to get more intense, according to Mustapha Zarma, National Operations Controller of the Independent Petroleum Marketers Association of Nigeria.
“This will drive down the price of refined petroleum products, he claimed. As soon as the plant begins producing goods in huge quantities, prices will undoubtedly continue to decline. This is because there will be fierce rivalry and, ultimately, market forces will drive the market.
“We support the government and NNPC in their efforts to ensure that the Warri refinery is up and running, and we urge them to ensure that all three refineries are up and running. We anticipate that there will be fierce rivalry in the market as a result of this development.
“The Port Harcourt refinery had previously begun operations; Warri has now begun, and Kaduna will follow. And that competition will ultimately benefit the average person due to the continued decline in fuel prices,” he stated.
