The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, says the four public refineries in Nigeria stand the risk of becoming scraps when the Dangote Group of Companies finally commences crude oil processing in the country.
The minister disclosed this last Thursday at a stakeholders’ consultative forum on the Draft National Gas Policy and National Oil Policy held in Abuja.
According to the minister, there is the urgent need to fix and ensure these refineries in Port Harcourt, Warri and Kaduna work within the shortest possible time.
“And not only should they work, they have to work very quickly. The reality is that if we do not privatize and we do not concede them, which is not what we are doing now, then we have a responsibility to find private capital to get them to where they should be.
“This is because if we do not get them to work, in 2019, I can assure you that if the Dangote system works well, we will have scrap, we won’t have refineries, because then, it will be too late to do anything”, he said.
He stressed the need for stakeholders to work in unity towards reducing the cost of production in the industry to manageable level, lamenting that crude oil was still being produced at $27 per barrel in Nigeria.
He said the production cost was too high as no decent country will produce at that amount at a period when the oil price is unpredictable and stressed the urgent need to bring the production cost below $18 per barrel.
Commenting on the total deregulation of the downstream oil sector, Kachikwu said at every given time in the history of every country, there were partial deregulation remarking that, “you have to catch up each time and make an amendment and even if it is just one day, you may have some level of subsidy for that one or two days before it is removed.
“Where we are headed is to try and free the industry so that it can do its own rules and set its own prices”, he said.