The Federal Government of Nigeria has sketched a strategic direction for Nigeria’s petroleum industry designed to fortify the sector and speed up a gas-driven modernisation of the economy.
This comes in the wake of oil exports dependent economies such as Nigeria being exposed to the external shocks that came with the decrease in oil demand as the coronavirus pandemic, which ground economic activities to a halt also made oil prices fall, in the first half the year.
Timipre Sylva, minister of state, Petroleum Resources numbered the National Gas Expansion Programme (NGEP), autogas initiative, attaining sufficient local refining capacity, removal of petrol subsidy, and Nigerian content development in the oil and gas industry as some of the pillars of the current government administration’s push to ensure economic stability and growth.
The NGEP was launched in January of this year, as a mechanism to boost domestic utilisation of natural gas in the short and medium-term. It is also part of the Federal Government’s strategy to navigate through the global shift from crude oil to gas as reemphasised. This was captured in the declaration of year 2020 as the ‘Year of Gas’.
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Last week, President Muhammadu Buhari rolled out the autogas initiative under the NGEP to drive the adoption of liquefied petroleum gas (LPG) and compressed natural gas (CNG) as an alternative fuel for Nigerians to fire cars, buses, and trucks.
This alternative fuel option will afford Nigerians a cheaper, cleaner, and a better choice of fuel. At about N90 per cubic metre (the equivalent of a litre of petrol) it is cheaper than the price of premium motor spirit (PMS), “cleaner for our environment, improves our carbon footprint and better for our automobile and generator engines,” Sylva said in a ministerial address at the recent digital session for the Nigerian Oil and Gas (NOG) Strategic Outlook.
With a proven gas reserve of over 200 Trillion Cubic Feet (TCF), Nigeria has huge potentials to be on the path to becoming an industrialised nation, with the right policies and regulations to expand the utilisation of her gas resources.
Referring to the fourth initiative of the ‘7 Big Wins’ that was launched four years, titled ‘Refineries and Local Production Capacity’ the minister of state claimed the FG aims at changing the Nigerian narrative of being an import-dependent nation.
Sylva reassured the audience of the Federal Government’s commitment to rehabilitating existing state-owned refineries, co-location of new refineries and construction of Greenfields with the firm goal of making Nigeria a net exporter of petroleum products in the next few years.
Other refineries mentioned as part of the effort to boost local refining capacity are privately owned. The 650,000 barrels per day (bpd) Dangote Refinery at Ibeju Lekki able to meet Nigeria’s refining requirements twice over and help meet the increasing domestic fuel demand, while generating foreign exchange inflows through exports.
Others are modular refineries such as the 5,000 bpd Waltersmith Modular Refinery with 30 percent equity investment by Nigerian Content Development and Monitoring Board (NCDMB).
The removal of petrol subsidy is another policy direction in the interest of all Nigerians. Deregulation is going to save the Nigerian Government up to N1trillion every year, which the country can use to develop other aspects of the economy.
In the last decade, the Nigerian Content Development and Monitoring Board has focused on promoting indigenous ownership of oil and gas equipment and local oil and gas components manufacturing. The board has been giving first consideration to indigenous companies and carrying out training to grow capacities in the value chain, and deploying the Nigerian Content Development Fund (NCDF) for targeted capacity building.
Nevertheless, Nigeria often appears to have clearly thought policies but implementation has commonly been shoddy and policy flip-flops are frequent.
