Refinery Owners Demand End to Fuel Importation in Nigeria
The ongoing fuel importation in Nigeria is a drain on the nation’s resources and an impediment to economic growth, according to the Crude Oil Refineries-owners Association of Nigeria (CORAN). The group is advocating for a shift in focus from fuel importation to exportation.
Eche Idoko, the Publicity Secretary of CORAN, has called for a complete overhaul of Nigeria’s fuel importation policy, asserting that the country possesses the capacity to produce enough fuel to meet local demand and even surplus for export.
Depot Owners Hinder Local Refining, Says CORAN
Idoko has accused depot owners of hindering the growth of the local refining industry. He argues that while depot owners are investors, their primary contribution to the value chain is to exert pressure on the naira through foreign exchange demands.
“Depot owners push the price of petrol up by about N150 due to their operational costs and middleman role,” Idoko said. He further contended that independent marketers purchase petrol from depot owners at exorbitant prices, reaching almost N800 per litre.
The CORAN spokesperson proposed that depot owners could play a more constructive role by partnering with refineries to enhance storage capacity and facilitate exports. This, he believes, would transform the depot industry from an import-centric model to an export-oriented one.
Call for Debate and Partnership
Idoko has extended an open invitation to depot owners for a public debate on the matter. He believes a transparent discussion would reveal the detrimental impact of fuel importation on the Nigerian economy.
“We are calling them to come and debate this openly with us. Let’s put the figures before Nigeria and we will see,” Idoko declared.
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Furthermore, CORAN is encouraging depot owners to invest in the local refining industry through partnerships with existing refineries. This, according to Idoko, would create more jobs and contribute significantly to the nation’s economic growth.
“We should see them entering into strategic partnerships with refineries so that those depots will graduate from an import hub to an export hub,” Idoko proposed. He pointed out that the Dangote refinery, for instance, could utilize existing tank farms for export purposes.
Earlier in a discussion with CEM, Marcel Okeke, a seasoned oil and gas industry expert, pointed that the abrupt removal of fuel subsidy without recognizance to the lasting implications crashed the nation’s economy. He outlined that the recent naira for crude policy will reduce the pressure on the naira and bolster the economy in the long term.
If You Ask Me: Economic Implications
The continued reliance on fuel importation has severe economic consequences for Nigeria. It puts immense pressure on the naira, leading to currency depreciation and inflation. Additionally, it limits the potential for job creation in the refining sector and hinders the development of the country’s oil and gas industry.
By transitioning to a fuel export-oriented economy, Nigeria can generate substantial foreign exchange earnings, create employment opportunities, and reduce its vulnerability to global oil price fluctuations.
The standoff between refinery owners and depot owners highlights the complexities of Nigeria’s fuel sector. As the country strives to achieve energy independence and economic growth, the government will need to carefully consider the implications of these competing interests.
CORAN’s stance underscores the urgent need for a comprehensive review of Nigeria’s fuel importation policy. The government must create an enabling environment for local refineries to thrive and discourage practices that hinder the development of the domestic refining industry.
A shift towards fuel exportation can be a game-changer for Nigeria’s economy, but it requires bold decisions and strategic planning. The nation must seize this opportunity to diversify its revenue streams and reduce its dependence on imported petroleum products.