‘Downstream petroleum sector reforms to address energy export, value added import’

Ongoing reforms in the downstream petroleum sector will among other things address the Nigeria energy export and create value added energy import, the Ministry of Petroleum Resources says.

Nigeria, a leading oil producing country, has over the decade grappled with challenges in its energy space, as growth of the downstream industry has not matched product demand growth by an equally increasing population.

It is the expectation of the petroleum ministry that these major reforms in Nigeria’s downstream petroleum sector will not only eliminate petroleum products subsidies, liberalise the market, but will also further transit Nigeria from massive importation to net exportation of petroleum products and value added petrochemicals.

Dennis Ajulu, senior technical adviser on downstream and infrastructure to Ibe Kachikwu, minister of state for petroleum, while responding to questions on the ministry’s social media conversation platforms on twitter and Facebook monitored by BusinessDay, says this reforms will enhance capacity utilisation of our local refineries to guarantee effective product supply and distribution.

Ajulu, who recently retired from NNPC group as the group executive director on refining and technology, observes that the new landscape will boast of improved transparency, efficiency, stable investment climate and a well-protected environment for investors to operate.

 Anchoring the talk on Refineries and Local Production Capacity, which is the fourth in a 7-part series showcasing the Petroleum Industry Roadmap, Ajulu opines that energy is the hub of every economy, saying that meeting fuel demands by local production is key, as Nigeria aspiration is geared toward targeting net energy exports that can yield revenue to drive other sectors of the economy.

On how the forthcoming oil and gas policy reforms will revive the refining sector of the Nigerian oil and gas industry, he says the reforms will incentivise investments that will in turn drive productivity.

According to Ajulu, “the product price modulation encouraged competition and as framework deals with production, processing and marketing. Sales were encouraged, which in turn increased interest for players to go into production and processing, intermediate industry activity streams will deal with regulation, storage and distribution.”

In responding to a question on the N145 price for premium motor spirit (PMS) litre of petrol in Nigeria, he says market forces should be driven by equilibrium of the price that helps you sell and also the price that marketers purchase. “Market forces should be driven by price equilibrium that helps in sales and purchasing ability,” he says.

On whether illegal refineries reportedly destroyed by security agencies could be converted to modula ones, Ajulu emphatically answers in the negative, stressing that product quality is very key. “Regulatory requirement for product quality demands lessened carbon footprint,” he says.

He further assures that credible investors with proven capability and financial muscle are encouraged to play in the sector, saying that refineries are at functional levels as the next step the Federal Government through the ministry of petroleum is taking to ramp to optimal levels and add capacity.