The Nigerian National Petroleum Company Limited (NNPC) on Wednesday explained that modular refineries in Nigeria were not producing Premium Motor Spirit, popularly called petrol because of the regulated pump price of PMS by government.
Modular refinery is a simplified refinery requiring significantly less capital investment than traditional full-scale refineries that is capable of processing They are crude oil processing up to 30,000 barrels per day.
Nigeria has a number of modular refineries in Edo, Delta, Imo and other states. The Federal Government has already put plans in place to increase the number of modular refineries through private sector investments.
Data released on Wednesday by the Organisation of Petroleum Exporting Countries indicated that OPEC had raised Nigeria’s oil production quota from the 1.718 million barrels per day target in March to 1.735 million bpd in April 2022.
It was also observed that the cost of Brent, the crude against which Nigeria’s oil is priced, appreciated on Wednesday, rising to $111.03/barrel as at 6.54pm Nigerian time, amidst the increase in OPEC oil production quota for Nigeria.
OPEC raised Nigeria’s crude oil production quota following the conclusion of the 26th Ministerial Meeting of the organization held via videoconference on March 2, 2022.
Lately, Nigeria had been missing its oil production quota, but last month, OPEC increased its crude oil production target for the month of March despite the fact that the country had been missing its approved monthly output targets.
OPEC raised Nigeria’s oil production target for March 2022 to 1.718 million barrels per day, indicating a marginal increase from the 1.701 million barrels per day target that was approved for Nigeria in February.
Speaking on the reasons why modular refineries were not producing petrol, during a plenary session at the ongoing Nigeria International Energy Summit 2022 in Abuja, the Group Executive Director, Refining, NNPC, Mustapha Yakubu, said it was due to fuel pump price regulation.
He said, “Some modular refineries should take up to 50,000 barrels per day, but because of financing you can start with 10,000 barrels and then scale up gradually to 50,000 barrels.
“What do you need to do to produce PMS? It is to put additional investment that will put in the cracker required to produce the PMS. But in this period why they (modular refineries) cannot produce PMS is because we are under full regulation.”
Under the present regulated environment, Yakubu wonders how much it would cost a modular refinery to produce PMS and how much it would be sold.