LCCI: Why refineries, others are not attracting investments

The Lagos Chamber of Commerce and Industry (LCCI) has identified inappropriate and unimplemented policies, as well as unfriendly business environment, as part of the reasons the refineries and other sectors of the economy have failed to attract the required investments.

LCCI Director-General, Muda Yusuf,  said the policies and the environment do not encourage investment. “Currently, policies around the refineries are not investment-friendly. With such policies, it would be difficult to attract private sector investments that will help to optimise their output, hence the refineries have been in that situation,” he asid.

Yusuf, who spoke on the Challenges and opportunities in optimising local refining capacity, at a panel discussion at an oil and gas conference in Lagos,  said the bureaucracy and political structures that surround the refineries and other projects, had virtually put the government as the omibus of these entities, pointing out that for as long as this trend persists, not much progress could be made in the area of optimising the output of these assets.

He said it was as a result of this development, that Nigeria, after so many years of oil production,  still imports petroleum products with government’s subsidy.

Yusuf stressed that “it is imperative to reform the sector to attract investors. To unlock and free the sector from the government and make it investor-friendly, reform is important. This will create jobs and other values in the economy.”

He said the Nigerian National Petroleum Corporation (NNPC) is the sole importer of petroleum products because it is not viable for private sector to import, adding that the Turnaround maintenance of the refineries has gulped millions of dollars with no appreciable result. “All these steps are not the right way to spend our resources as a country,” he added.

The immediate past Chairman, Society of Petroleum Engineers (SPE) Nigeria Council, Dr. Saka Matemilola, who agreed with  Yusuf, said despite the repairs over the years, the refineries refine between four and eight million litres, while national daily consumption of premium motor spirit (petrol) stands at about 41 million litres. The foreign exchange implication of importing the product, he said, is the reason oil marketers are not importing.  Daily fuel consumption of the nation, he said, costs about $9million.

“We will not get it well if we depend on government refineries. The Niger Delta Petroleum Resources Limited (NDPR), operates a marginal field and operates a refinery that produces diesel. When it expands, it can start to produce petrol and other products. The message this firm sends is that successful refining is do-able by Nigerians, but the private sector has to drive it.

“The unlicensed or illegal refineries in the Niger Delta thrive despite the health and environmental hazards they cause because there is inadequate refining in-country. To address the issue, there should be adequate refining locally, and perhaps, the illegal refiners be licensed and trained so there will be no need for illegal and poorly refined products, with  the associated hazards they cause to the environment,” he said.

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