Lagos — Recurrent fuel shortages in Nigeria, ironically the continent's prime producer of the commodity, are seen as highlighting its failure to domestically refine the petroleum products it requires for its own consumption.
Also Africa's biggest economy, the West African country has seen the scarcity return to haunt since the festive season.
The scarcity has been attributed variously to flaws in distribution, upward movement in the international price and hoarding especially of petrol, which retails at N145 (US$0,40) per litre, thus far below in the countries of the sub-region.
However, First Bank National (FBN) Quest Capital, the local market analysts, blamed what it termed poor use of limited resources.
The firm proposed local refining as the "obvious solution."
"By local, we mean private sector. The Nigerian National Petroleum Corporation's refineries should be allowed to wither away in our view," FBN Quest Capital stated.
The firm thus hailed the refinery under construction in Lagos State, by Africa's wealthiest man Aliko Dangote as a "game changer."
Over time, it is scheduled to process 650 000 barrels per day (b/d).
It will start processing oil in 2019. Petrolex plans to invest US$3,5 billion in a refinery with capacity of 250 000 b/d in the southwestern Ogun State, set for completion within five years.
"We would expect several more projects if the retail price of petrol was genuinely deregulated," FBN Quest Capital stated.
The government of President Muhammadu Buhari, who doubles as petroleum minister, has responded to the periodic shortages by committing funds to another programme of turn around maintenance (TAM) for the NNPC's refineries, worth at US$1,1 billion.
The turnaround is said to be achievable over 18 months.
An earlier investment in 2013 made little impact.
"We cannot say for sure that the latest programme of TAM will not be a success. However, the age of the refineries suggests not," stated FBN Quest.
The facilities were commissioned between 1965 and 1980.