Nigeria: Guidelines on Private Refineries In Nigeria Out Friday

24 May 2001
allAfrica.com
By A Special Correspondent

Lagos — Nigeria's march towards privatization of its oil industry is due to take a major step forward Friday, with the announcement of guidelines for the ownership and operation of private refineries.

Dr Rilwanu Lukman, Special Adviser to President Olusegun Obasanjo on Petroleum Resources, will release the guidelines, according to Sam Dimka, an Assistant Director in the Ministry of Petroleum Resources.

The move closely follows a speech last week, read on the president's behalf, that his government would move to enable privatization of the oil industry's downstream sector. "My administration will pursue with vigour the opening up of the sector through facilitating the setting up of private refineries, new pipelines and depots. The policy framework and guidelines for such enterprises will soon be released to the public," the speech said.

Encouragement of private refineries is part of a package of reforms aimed at improving productivity in the oil industry, where monopolistic inefficiency has created bottlenecks in the supply of refined petroleum products.

Nigeria currently has four refineries, all subsidiaries of government-owned Nigerian National Petroleum Corporation. Together, the four facilities have a total installed capacity to refine 445,000 barrels of oil per day. But they have failed to meet Nigeria's domestic requirements, forcing the oil-rich country to depend on imports.

The National Assembly is currently investigating some of the imports of refined products. Pipelines and Products Marketing Company, one of NNPC's subsidiaries, on Tuesday said Nigeria has spent over five billion dollars to import fuel in the past five years. PPMC, which is responsible for marketing refined products, made the revelation at a Nigerian Senate public hearing on the imports.

The government says private ownership of refineries in the country is one way to ensure a regular supply of refined products, in a situation of recurring shortages. Until now there has been no policy framework that defines or regulates the private ownership or operation of refineries.

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