• Thursday, July 18, 2024
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Energy crisis: Which way Nigeria on proposed modular refinery licensing?


…Niger Delta youth coordinator says time is now

Nigeria now faces severe energy crisis but the aspect that seems to crush the commonest Nigerians is high cost and scarcity of kerosene and fuel.

At the moment, electricity is not available to the people that need it, many communities are still without electricity, the premium motor spirit (PMS) which is what most generator owners depend on for power is also very costly and out of the rich of the common man, including those who are into small and medium scale enterprises. Diesel which is for the higher class and companies is also difficult to get because it is expensive. Many are really unable to afford it.

Experts in the oil region say as a result of this, businesses are shutting down, jobs are being lost, and small businesses are getting suffocated.

What the government needs to do especially now that they are floating licenses for more refineries and are also trying to open up licenses for new oil wells is to address the issue of modular refineries.

According to Fyneface Dumnamene Fyneface, executive director of the Youths and Environmental Advocacy Centre (YEAC), who is also the National Facilitator of Project with Artisanal Crude Oil Refiners for Modular Refineries in the Niger Delta, some modular refineries are operational while others are under construction across the Niger Delta and other parts of the country.

The point remains that the current production quota that Nigeria has and the strength of the current production that is coming from both the Dangote Refinery and other private refineries that are operational is not sufficient to serve the country. Government-owned refineries are also not working. The goalpost for the Port Harcourt Refinery keeps shifting production dates and the energy crisis in the country has continued.

Fyneface said it was therefore, important for the present administration to look to modular refineries for urgent rescue.

“That’s is why youths involved in artisanal crude oil refineries keep saying that if they cease operation following the way security is cracking down on them, that it is going is going to be difficult for Nigeria especially those who depend on them to power their businesses.

“The reason why energy crisis is not being felt so severely in Nigeria today is because of the youths in artisanal refining that produce kerosene, diesel, and fuel which people use,” he said.

What government should do

According to Fynface, what the government should do is to discourage illegal artisanal refining through modular refinery licensing. This, to him, is not new because the former president, Muhammadu Buhari, through the then acting president, Yemi Osinbajo, promised to give youths of the Niger Delta some special refinery licenses.

“This is the time for it. They have been approved; three per state, following what we put together that time known as Modular Refinery Multipurpose Cooperative Society. They were three per state in the Niger Delta based on government promise.

“The present administration should endeavour to fulfil that promise by issuing the modular refinery licenses to the youth involved in illegal artisanal refining. This will help address the issue of energy we are facing currently in the country.”

Energy poverty in Niger Delta

The resource persons said this was the time to address energy poverty in the Niger Delta by releasing modular refinery licenses the then president, Buhari, had already approved.

Fyneface said: “This is the best time for this to be done in Nigeria because the licensing of modular refineries for artisanal refiners is going to go a long way to address the issue of energy poverty in the oil region. This is more urgent in communities without electricity and areas without any form of filling stations and riverine communities without filling stations except products from illegal refining sources. So, the government should try as much as they can to address the issue of curbing youths in illegal refining.”

Merits of modular refinery licenses

Many have pointed to environmental pollution, saying modular refineries will cut down on environmental pollution now ravaging the Niger Delta.

They also mentioned the need to reduce pipeline vandalism in the region. There is also the need to reduce soot, the black particles that come from incomplete combustion that now ravage the oil region. The major source of this is illegal refineries.

Climate change is said to be another concern because the refiners use very high heating fire to carry out their operations in the creeks and bushes. It is said to contribute to heating the earth that causes climate change. Another merit is that it will create jobs for youths. It will create roads and electricity as a result of the products coming out of the remote areas. They argue that the government needs to look into the issue.

Some of the fears are said to be that pollution will continue in the Niger Delta if this is not arrested through licensing of modular refineries. Pipeline vandalism will continue no matter how much they crack down on them. Climate change issues will be there. These are avoidable, the experts argue.

They called on states to take over the agitation for licensing so the youths can get it right. Fyneface said: “If they champion the cause, it will motive the FG to act and address the issue. When we talk of the Presidential Artisanal Crude Oil Refining Development Initiative (PACORDI), it is because it aims at standardising, integrating, legalising, into the economy which will go a long way to solving this problem. If these are addressed, we are going to have a better earth and address the problems of fishermen and make more money for the FG.”

Another strong opinion from the oil region, Chris Finebone, former commissioner of information in Rivers State, supports the licensing of modular refineries.

He said: “The concept of modular refineries is very good and the reasons are many including ensuring regular supply of the various petroleum products motorists require.

“With the existence of modular refineries, shortages of products experienced due to maintenance shutdowns by the big refineries can better be managed as the output of the modular refineries will fill in the gap during shortage of supplies to consumers.”

Finebone added that modular refineries would provide employment for Nigerians thereby helping to provide or facilitate transfer of technology to Nigerians.

Overall, he said that modular refineries would boost the Nigerian economy in several ways.

He observed however, that the setback of modular refineries is that they are predominantly limited in the range and variety of products they produce.

“Most modular refineries are unable to produce Premium Motor Spirit (PMS) or petrol/gasoline, aviation fuel (JET A1), etc. Generally, modular refineries produce Automotive Gas Oil (AGO) or diesel,” he said.

Drawbacks: Nigeria’s declining crude production

Some experts have pointed to the difficulty of getting crude oil by any new refineries. An information manager and government business analyst, Blessing Nwikina, queried: “For now, how will modular refineries access crude oil supply, at what cost, and what volume would they need to break out and make profit?”

He went on wondering what the other derivatives out of their processes would be for them to break even, saying all these are factors that would guide the decision for modular refineries.

“The idea of modular refinery came as a measure to stop ‘kpofire’ (illegal refining) which was profitable because they weren’t paying for crude supply. It was stolen. So, the cost of crude wasn’t factored in. But if they were paying for crude, ‘kpofire’ wouldn’t have been an attractive option.

“Until all the variables are considered in Modular Refinery, we can’t give it a ‘yes’ verdict.

“Also, the coming of Dangote Refinery, and the rumoured commencement of PHRC, etc, may not make modular refinery attractive, except it will be consigned to produce only Kerosene.”