The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said that at the moment, importing Premium Motor Spirit, PMS, also known as petrol, is cheaper than producing the product in the country’s refineries.
Addressing newsmen in Abuja, Kachikwu disclosed that until the upgrade and total refurbishment of the refineries are concluded, as well as ensuring that the pipelines are fixed, it would be uneconomic and very expensive to refine PMS locally. He maintained that local refining of PMS would make much more economic sense if all the refineries undergo full set of repairs and Turn-Around Maintenance, TAM, and when new refineries are set up in the country through co-locative initiative.
He said: “Most modern refineries are configured in such a way that your stock of PMS outage is a lot higher, 70 to 80 per cent. So when we do import the product, we actually save money; we get it less expensive than when we do it here. “But having said that, the reality is that until we have alternatives in terms of co-locative refineries which we are looking at; until we finish the total refurbishment to improve and upgrade the refineries, it does not make sense to use it with some of the deficiencies.
“This is because distribution is key. If you have product in Kaduna for example, pumping into the north becomes easy as opposed to moving, as we do whenever we have a crisis – trucks all the way from Lagos and Oghara, out to the north.” Kachikwu further noted that even if the current set of refineries were working on a 100 per cent basis, they would only be able to account for 20 million litres of PMS per day, about 50 per cent of the country’s total consumption.
This means that the country would still resort to importation to meet up with the shortfall. He said: “The way the refineries are configured right now, and until a full set of repairs and TAM are done, they are configured on the basis of 50 per cent of PMS and 50 per cent other products. So even if they were producing on a 100 per cent basis, which they are nowhere near producing right now, PMS output would be less than 20 million litres. Our consumption is closer to 40 million. So we will still have, literarily, 50 per cent gap.” Click to signup for FREE news updates, latest information and hottest gists everyday
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This man is another APC joke. importing will be cheaper than refining. What a daft joke? I see the need for him to revisit basic economics and primary strategic thinking. I wonder if Nigeria is the only country using PMS or what would have been the case if they don't produce oil!
ReplyDeleteO D E A P C
ReplyDeletekachukwu has forgotten when this product are refine here in Nigeria the citizen are the beneficiary of this process. You prefer to render people jobless.
ReplyDeleteClueless and blind APC bigots. How can a minister proffers such a nonsensical solution to the our nation. I see how the APC led administration is bent on drivng our economy into a journey of no return. This is a show of incompetence and foolishness.
ReplyDeleteFrom the spate of happenings in this country since APC assumption of office, I fear if the common man has hope of any means of livelihood. It's heartbreaking to know that the change Nigerians voted for is a change of good to worst. MAY GOD SAVE US FROM THE HAND OF APC TYRANY.
he is saying the refineries are not sufficient enough to supply the whole nigeria, hence the shortfall in PMS. the question we should ask is how long it will take to get refineries in nigeria to supply upto 40 million litres. and while we are building, how do we cope with the insufficient PMS. this is where importation comes in. everybody needs the product....let us ask the right question and question the wrong motives and ofcourse improve on solutions.
ReplyDeleteThe refined pms brought into this country came from Nigerian refineries in overseas. So Kachukwu is calling and encouraging the thieves to build more refineries outside as their product are cheaper. Until we liberate ourselves from the inner circle of fraternity of thieves in this country we shall only be going in an endless circle.
ReplyDeleteGuys, I should be first to castigate anything APC but in this case, some understanding is necessary. Our refineries as they now are old in structure and technology and they cost far more to run. An added cost is that of incessant pipeline vandalization which ensures that a very low percentage of oil supplied form.the rigs gets to the refineries.
ReplyDeleteWe need these old refineries to be brought to refurbished and we need new ones to ensure excess production,hence export
Enlighten them, bro.
DeleteIts simple, all the money these bastard thieves are stealing is more than enough to demolish and construct 4 or more new refineries.
ReplyDeleteThey are not serious people, they are fooling themselves, definitely, it will not last.
If this government is serious, they will know what to do. The fact that pipelines are being vandalised does not mean our refineries should not work. Presently the pipelines are really not being used, tankers convey the PMS around the country. We can simply continue with that, get our refineries working and let tankers continue to lift the products until issues with pipeline is sorted. The minister and his people have not thought this through properly.
ReplyDelete