To achieve the President Muhammadu Buhari administration's target of meeting the nation's needs and end the importation of petroleum products by 2019 which cost the country N3.35 trillion last year, the Ministry of Petroleum Resources is executing a three-pronged strategy.
The strategy was articulated by the Minister of State of Petroleum, Dr. Emmanuel Ibe Kachikwu, in his latest monthly podcast to stakeholders in the oil sector.
According to the minister, the expected benefits from the strategy include: foreign exchange conservation, job creation, ensuring stability of the market place in terms of pricing, stability of production as well as earning some credibility in OPEC as an oil producing country which successfully transited from importation to local processing.
"Unless we focus strongly on how to bring long-term sustainability in refining and local supply of products, we are going to continue to face serious challenges."
The strategy has four components. First, is a plan to attract massive finance to fund the repair and upgrade of three key refineries in Port Harcourt, Warri and Kaduna to boost and stabilise supply of petroleum products.
The second component of the strategy is strengthening government support for private sector-led Greenfield refinery projects such as the Dangote Refinery.
The third component is the structuring and mainstreaming of private sector-driven modular refineries to further increase the supply of petroleum products and end importation.
Kachikwu confirmed that the ministry's drive to seek financing for the revamp of the country's refineries has received the interest of serious global investors.
The investors, according to the minster, have expressed willingness to provide support and finance the repairs of the three refineries that are estimated to cost about $1.2billion.
The country is producing only a small proportion of what it currently consumes. The national daily average production in refining output and production is about six million liters, about 22-24 per cent of the total daily consumption of about 35 million litres.
The minister also stressed that the importation of petroleum products at current levels has led to huge and unsustainable capital flight. Approximately N3.35 trillion was spent between January 2016 and December 2016 to import 20 metric tonnes of imported petroleum products.
In all, close to 30 per cent of foreign exchange released by the CBN goes to importation of petroleum products - a huge drain on foreign exchange.