Major industry analysts and petroleum marketers are optimistic of Nigeria now becoming West Africa’s petroleum refining hub and also predicts a drop in the pump price of Premium Motor Spirit (PMS) also called petrol.
Their predictions follows the Nigerian National Petroleum Company (NNPC) Ltd. fulfillment of its pledge of re-streaming the Port Harcourt Refining Company (PHRC).
The re-streaming signals the commencement of crude oil processing from the plant and delivery of petroleum products into the market.
On Tuesday, trucks began loading petroleum products which include Premium Motor Spirit (PMS) or petrol, Automotive Gas Oil (AGO) or diesel and Household Kerosene (HHK) or Kerosene, while other product slates will be dispatched as well.
Analysts commended the company for ensuring that the refinery begins operations to further compliment supply from the 650,000 mega Dangote refinery.
Henry Adigun, an oil policy expert who has worked supporting oil reforms in Nigeria since 2011, said this is a good starting point and Nigeria’s vast market requires multiple suppliers to ensure price stability and supply sustainability.
Adigun, said with Port Harcourt refinery now in operations distribution challenges would be eased as the volume from the facility would take care of demand from the eastern market.
He also added that this development would engender competitiveness in pricing and that soon it would reflect on pump price stability.
Also speaking, Ibrahim Yahaya, general secretary of the Petroleum Dealers Association of Nigeria (PEDAN), said though the volume output from the refinery may be about 40,000 barrels it would definitely go a long way to provide market stability.
Yahaya, said already domestic consumption of petrol has reduced by about 60 per cent going by sales record of marketers, a combination of supply from both Dangote and Port Harcourt would create effective demand and supply balance.
He also urged the NNPCL to double efforts to bring Warri and Kaduna refineries on stream.
According to Yahaya, if the company can commission both plants by Q2, 2025 the three government owned refineries could increase production by about 100,000 barrels a day which will motivate investment in the downstream industry.
He also presumed that price of petrol would likely reduce given that the Port Harcourt refinery would be refining Nigerian crude and a guaranteed feedstock from the NNPCL would support price adjustments.
In his reaction, Eche Idoko, Spokesman of Crude Oil Refinery-owners Association of Nigeria (CORAN), said the refinery now with capacity to refine 60,000 barrels of crude a day will make further impact in supply sustainability.
Idoko, said what the Association has clamored for is affordability of products which will be in the interest of the public.
Meanwhile at a brief ceremony to mark the commencement of products loading at the Refinery on Tuesday in Port Harcourt, the Group CEO, Mr. Mele Kyari described the commencement of the loadout activities as a monumental achievement for Nigeria which signifies a new era of energy independence and economic growth for the country.
The GCEO particularly thanked President Bola Ahmed Tinubu for his unwavering support and understanding towards the rehabilitation project and for his persistence to ensure energy security for the country.
Kyari also expressed deep appreciation to the NNPC Ltd Board of Directors and the entire staff for their support and commitment, which crystallized into the streaming of the refinery.
He also commended the contractors for doing a great job in ensuring that the refinery is delivered despite all challenges.
The GCEO further thanked Nigerians for their patience and for the legitimate expectations on the Company to deliver on the other refineries.
In his remarks, the Chief Executive of the Nigerian Midstream & Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Farouk Ahmed congratulated the NNPC Ltd for the milestone and assured of his agency’s continued support towards the completion of rehabilitation work at the other refineries.
The PHRC rehabilitation project, is an Engineering, Procurement, Construction, Installation & Commissioning (EPCIC) project that is aimed at restoring the refinery to full functionality and renewal.
It has achieved over 16 million manhours with zero Loss Time Injury (LTI).
Meanwhile, Nigerian Government claims that an impressive $7.5 billion is being saved annually from funds previously allocated to fuel subsidy following its removal.
The Special Adviser on Media and Public Communications to President Tinubu, Sunday Dare, detailed some of the president’s achievements in the oil sector.
Dare highlighted key milestones, including five new executive orders signed by the president expected to unlock $2.5 billion in oil and gas investments.
Another point on the list was the introduction of two pricing tiers for petroleum products one by trucks and the other by sea.
“Positive notes from President Bola Tinubu’s oil and gas sector reforms.
“Saved Nigeria $7.5 billion previously spent on oil subsidy.
“Five new Presidential Executive Orders to immediately unlock $2.5 billion immediately in new oil and gas investments.
“New two pricing tires for those transporting via the shop and those transporting via trucks,” the report shows in part.
Following his assumption of office on May 29, 2023, President Bola Tinubu announced the removal of the popular but costly fuel subsidy.
In his inaugural speech, the president declared that the subsidy was “gone.”
This announcement led to a significant increase in the price of PMS, rising from N180 to about N620 per liter, and soaring again a year later to approximately N1,200 at retail filling stations.
The removal of the subsidy has indeed helped the country save scarce resources that could have been allocated to critical sectors such as education, health, or infrastructure.
However, while there is no concrete data on how much the government has saved from full deregulation of the downstream sector, various figures have been speculated.
In a recent interview, the Minister of Finance, Wale Edun, claimed that the country has saved no less than N20 trillion since the subsidy removal.
His statement sparked widespread reactions online, with many questioning why, if such savings have been realized, the Government still seeks to borrow $2.2 billion to address some of the 2024 budget shortfalls.
Several factors drove the complete phasing out of the fuel subsidy by the federal government.
Following President Tinubu’s declaration that the subsidy was “gone,” the federal government excluded provisions for it in the supplementary budget.
However, petrol was initially pegged at N620 per liter despite significant naira devaluation and rising crude oil prices, leaving NNPC to absorb the cost of the implicit subsidy.
The NNPC later announced that it could no longer subsidize imported petrol, citing debts of approximately $6 billion owed oil traders.
These developments culminated in the full deregulation of the downstream sector, with petrol now selling for between N1,200 and N1,400 per liter, depending on the location