Experts urge FG to partner with local refineries amid fuel scarcity in Nigeria

Oil and gas experts have called on the Federal Government to partner with local refineries to process the daily allocation of 445,000 barrels of crude oil for domestic use under a tolling arrangement. This advice comes amid ongoing fuel scarcity in Nigeria, as observed on Monday in Lagos.

Rabiu Bello, Senior Independent Non-Executive Director at Seplat Energy Plc., suggested that such collaboration would secure the petroleum products needed for domestic consumption while allowing the export of surplus.

Bello noted that this approach would enable the Dangote Petroleum Refinery and other local refineries to operate profitably, achieving over 65% capacity utilization without significant additional investment in crude oil supplies.

He also recommended that the Federal Government conduct a forensic audit of the Nigerian National Petroleum Corporation (NNPC)/NNPCL’s financial records to determine the true cost of importing and delivering petroleum products from 2012 to 2024.

Tunji Oyebanji, a member of the Major Oil Marketers Association of Nigeria, emphasized the need for full implementation of the Petroleum Industry Act (PIA). He argued that allowing market forces to determine petrol prices would reduce the financial burden on importers and local refineries.

“Selling below cost is not sustainable,” Oyebanji stated, adding that economic pricing could attract more suppliers to the market, improving supply and reducing financial strain.

Oil and gas consultant Henry Adigun echoed the call for full PIA implementation to streamline operations in the downstream sector of Nigeria’s petroleum industry. He suggested that the current fuel scarcity could be alleviated if the government paid outstanding debts to importers and allowed fuel prices to reflect market conditions.

Olufemi Soneye, Chief Corporate Communications Officer at NNPC Ltd., acknowledged on September 1 that the company is facing financial strain due to the high cost of Premium Motor Spirit (PMS). He assured that NNPC Ltd. is working with government agencies and stakeholders to maintain a consistent supply of petroleum products.

NAN correspondents monitoring the fuel situation in Lagos reported worsening scarcity, with fuel prices surging. Many filling stations across the city were closed due to shortages, while those that remained open saw long queues. In some areas, petrol was sold for as high as N940 per litre.

Motorists expressed frustration over the persistent fuel scarcity, long queues, and the rise in black market sales. A manager at a Mobil station in Abule Egba reported selling petrol at N700 per litre due to limited supply, while a Conoil station manager attributed the price increase to the scarcity of the product.