The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), in collaboration with its partners, is set to establish a new refinery with an initial capacity of 50,000 barrels per day.
The Memorandum of Understanding (MoU) to commence construction will be signed in the coming weeks, according to PETROAN President Billy Gillis-Harry.
Deregulation Driving Investment
Gillis-Harry emphasized that the deregulation of the downstream oil and gas sector has opened up opportunities for fresh investments. He noted that PETROAN has consistently supported total deregulation, advocating for the redirection of subsidy payments towards critical sectors like health, transportation, and education.
Focus on Energy Supply and Affordability
PETROAN’s efforts are geared toward ensuring energy supply sufficiency and economic growth. The association has partnered to establish a modular refinery as part of its commitment to product affordability and availability.
Gillis-Harry highlighted the unsustainability of subsidy payments, advocating for a free market that attracts investments and ensures a steady supply of petroleum products.
Recommendations to Reduce Petrol Prices
To address high petrol prices, Gillis-Harry pointed out several challenges and potential solutions:
- High Cost of Borrowing:
- Current bank loan rates range from 28% to 35%, which impacts product costs.
- He proposed the establishment of a Nigeria Energy Bank (NEB) as a local subsidiary of the African Energy Bank (AEB).
- NEB could provide funds to marketers at single-digit interest rates, enabling more affordable petroleum products.
- Enhancing Rail Transportation:
- Subsidy funds could be redirected to improve rail infrastructure for transporting petroleum products.
- This would lower transportation costs to depots, making it cheaper for marketers to load and distribute products.
Impact of PETROAN’s Modular Refinery
The planned modular refinery is expected to:
- Boost local refining capacity, reducing dependence on imports.
- Enhance energy availability and affordability.
- Attract investments to the downstream oil and gas sector.
By advocating for deregulation and implementing innovative solutions, PETROAN is positioning itself as a key player in ensuring energy security and driving economic growth in Nigeria.
