The quest of Africa’s biggest oil producer to wean itself off imported fuel has missed at least five deadlines since conception in September 2009, a BusinessDay analysis has revealed.
For the umpteen times, Nigeria is trying yet again to end massive petrol importation by relying on the Dangote refinery (650,000 bpd) and its state-owned refineries (445,000 bpd) currently under rehabilitation, if successful, could end the nation’s reliance on fuel imports.
The government has set numerous targets for ending petrol imports, only to see those dates come and go without significant progress.
“Nigeria is on track to stop the importation of refined petroleum products in 2024 and would emerge as a net exporter of the commodities in the same year,” Mele Kyari, CEO, of the Nigerian National Petroleum Company (NNPC) Limited told lawmakers in a meeting in Abuja.
The company’s helmsman said all refineries would become fully operational, adding that the country would become a net exporter of petroleum products by the end of 2024.
“This is the commitment we are giving today and you can hold us accountable for this. In 2024, many of the initiatives including the rehabilitation of our refineries and also the efforts of small-scale refineries, and the upcoming Dangote refinery, will make Nigeria a net exporter of petroleum products in 2024.
However, findings by BusinessDay showed this development has become synonymous with missed deadlines.
Experts fault the latest deadline citing the constant failure to supply crude oil to domestic refineries, including the multi-billion-dollar Dangote Refinery.
“The 2024 cut-off date to exit petrol importation is illogical and unconvincing considering our present situation with Modular refineries,” Dan Kunle, a global energy business advisor with experience working with various energy agencies, said.
“The first hurdle is getting the refineries to function in at least 50 percent capacity, the second hurdle is securing crude oil for them to work with,” he added.
Nigeria has imported more than 5.52 billion litres of Premium Motor Spirit, popularly called petrol, since the removal of the PMS subsidy on May 30, 2023. This is despite the high foreign exchange crisis across the country.
“The government is itself under pressure with endless deadlines it will never meet; The country should aim towards reducing petrol importation first before talking about ending petrol imports,” Luqman Agboola, head of energy and infrastructure at Sofidam Capital said.
Agboola noted that several government officials have made similar pronouncements in the past without any results.
The first government official to pledge Nigeria’s end to petrol importation was the late Rilwanu Lukman, Nigeria’s former Oil Minister.
Lukman promised the then government was committed to ending Nigeria’s petrol importation by fixing the chaotic condition of its four state-owned refineries.
“Nigeria would revive earlier plans to privatize the facilities as part of a strategy to wean the country off its dependence on imported fuel,” Lukman told Reuters on 27 February 2009.
In 2012, Former President Goodluck Jonathan also assured Nigerians the country is on the path to ending the importation of petroleum products.
“If in the next 10 years, this country is still importing petroleum products, then those of us who have the opportunity to be here when we die, should write something behind us, saying we did not rule this country well, because we must stop the importation of petroleum products,” Jonathan told Statehouse correspondent in November 2012.
In 2014, Jonathan rehashed Nigeria’s resolve to end the importation of petroleum products by 2017.
“Our projection is based on the 400,000bpd refinery being planned by Alhaji Aliko Dangote, who is investing $9 billion in the green-field project,” Jonathan said in 2014.
Before taking office in 2015, President Muhammadu Buhari and his party, the All-Progressive Congress (APC), repeatedly criticised past governments for failing to fix Nigeria’s refineries.
When oil prices fell in 2015, the then-opposition leader urged the government to “stop stealing from Nigerians and allow them to enjoy the relief that has come to consumers of petroleum products globally.”
In his response to the fuel scarcity in the country in March 2015, Buhari criticised past governments and former president Jonathan for failing to fix refineries and leaving Nigerians at the mercy of fuel imports.
He reminded Nigerians that two of the four refineries in the country were built under his watch as petroleum minister in the 1970s.
“In my time as NNPC chairman and Petroleum Minister in the late 70s, 2 of our 4 refineries were built, and domestic consumption catered for. But over the last several years our refineries have declined, and we are at the mercy of imports,” Buhari said.
Many Nigerians enthusiastically welcomed Buhari’s promise to end Nigeria’s years of fuel curse to allow citizens to enjoy reliable supply and pricing.
As president, Buhari appointed himself petroleum minister and seemed ready for the important assignment. He pledged to revitalise the dysfunctional refineries and boost foreign reserves by ending the importation of refined fuel.
On August 4, 2015, Buhari appointed Ibe Kachikwu as the new Group Managing Director of the NNPC. Kachikwu vowed to resign if Nigeria continues to import fuel by 2019.
In the interview, which lasted 23 minutes, Kachikwu promised to deliver on the completion of the refineries, noting that he was committed to ending Nigeria’s importation of petroleum products.
“2019 is the target time… I target 2019. If I don’t achieve it, I will walk…I put the date and I will achieve it,” the minister stated during an interview on the BBC World Service programme, HardTalk, anchored by Stephen Sackur in 2017.
Timipre Sylva, Nigeria’s former minister of state for petroleum resources also assured Nigeria will end refined petroleum products imports by Q3 2023.
“We are expecting that we will actually be exiting the importation of petroleum products from maybe about the third quarter next year if I were to give it a longer timeframe, but I believe that even before the third quarter next year,” Sylva said on 29 November 2023.
On August 22, Kyari said Nigeria will no longer import refined petroleum products from mid-2023.
Kyari, who made the disclosure during the weekly Ministerial Media briefing anchored by the Presidential Media Team, said it was based on the expected completion of ongoing maintenance of the nation’s refineries and the almost completed Dangote platform.
“Nigeria will end the importation of petrol by the middle of 2023 based on expectations that its refineries would be back on stream and the Dangote Refinery would have been running,” Kyari said in a state house briefing in August 2022.
Crude oil accounts for around 95 percent of outgoing goods trade each year, yet Africa’s largest economy and the most populous nation is dependent on imported petrol, despite never-ending rehabilitation and turnaround maintenance.