Oil entrepreneurs have expressed optimism concerning the rehabilitation of Nigeria’s 21 depots by the Nigerian Nationwide Petroleum Firm Restricted following the latest revival of the Port Harcourt and Warri refineries by the NNPCL.
Though the nationwide oil firm has promised to get the depots operating, sellers within the downstream oil sector advised our correspondents that you will need to hasten the revamp of the services, as this might enhance the positive factors of getting practical refineries in Nigeria.
They urged the nationwide oil agency to take fast and decisive steps to revive all inactive gas depots owned by the corporate throughout the nation.
The nationwide oil agency who presently incur further prices in cost to non-public depots for dealing with its merchandise was tasked to revamp the 21 idle stations for the good thing about Nigerians.
Sellers underneath the aegis of the Unbiased Petroleum Entrepreneurs Affiliation Nigeria mentioned the operational graduation of the 210,000 barrels per day Port-Harcourt refinery and the 125,000bpd Warri refinery is sufficient cause to carry again the moribund depots and additional scale back petrol prices.
The entrepreneurs additionally famous that the pipelines that provide or evacuate merchandise to the depots had been both vandalised or out of date for a few years with out restore, stressing that this was why the NNPCL had been using the providers of personal depot house owners.
Between 1976 and 1989, the Federal Authorities, via the previous Nigerian Nationwide Petroleum Company, constructed three refineries in Port Harcourt, Warri, and Kaduna.
This was along with an present one in Port Harcourt, which was constructed by Shell and BP in 1965 (later purchased over by NNPC).
The NNPCL put in a community of pipelines throughout the nation, totalling over 5,120km in size, to facilitate crude provide to the refineries and product evacuation from them.
The depots and pipelines operated by the Pipelines and Product Advertising Firm, a subsidiary of the NNPC, had been constructed to allow the distribution of merchandise by pipeline to depots to make the journey to stores simpler and cheaper.
Nonetheless, the decline in home manufacturing and the shift to gas imports led to the neglect of many NNPC depots, inflicting the nation to more and more depend on personal tank farms and highway tankers for the availability and distribution of merchandise.
Investigations confirmed that the idle depots are in Aba, Benin, Enugu, Gusau, Gombe, Ibadan, Ilorin, Jos, Kano, Makurdi, Maiduguri, Minna, Ore, Yola, Warri, Port Harcourt, Ejigbo, Mosimi, Kaduna, Calabar and Suleja depots.
An evaluation of the NNPCL’s 2023 monetary assertion additionally confirmed that the corporate has been spending on pipeline upkeep and prices to non-public depot house owners.
The report disclosed that N434.65bn was spent as prices to take care of oil, pipeline, and storage depot crops between 2022 and 2023. Whereas N44.274bn was paid as a throughput cost to non-public depot house owners for dealing with petroleum merchandise on behalf of the group on the terminals throughout the similar interval.
Talking with one among our correspondents, the IPMAN Nationwide Publicity Secretary, Chinedu Ukadike, mentioned the revival of depots is essential to lowering operational hazards and gas prices.
He famous that pumping merchandise from the pipeline would price much less and scale back pointless highway accidents, put on and tear of automobiles, and the consumption of diesel.
He mentioned, “Sure. Because the operations of our refineries have commenced, they’re meant to feed gas depots nationwide. For example, the Port Harcourt refinery is supposed to feed the Aba depot, Port Harcourt depot, Makurdi depot, Enugu depot, and even as much as Yola, via the pipeline. So, with this depot system, merchandise can have the ability to get to all these depots with out trucking, and it may be inside their operational prices.
“And it additionally helps in lowering costs. You understand, pumping merchandise from the pipeline will price much less and scale back pointless highway accidents, put on and tear of automobiles, and the consumption of diesel. The Warri refinery can be designed to maintain the Center-belt space. We even have the Kaduna refinery which is meant to maintain gas provide to the northern a part of the nation.
“Even from Lagos, the Mosimi and satellite tv for pc depots can maintain Owerri, Ilorin, Ibadan depot, and the remainder of them. These are the best way the pipelines have been designed, each methods 2A, 2B and 2E.”
Based on him, the depots had been constructed to obtain merchandise from the refineries and efforts have to be put in place to revive the services.
“These are the methods they’ve all been designed to have the ability to maintain a few of these depots as a result of entrepreneurs can have the ability to take merchandise simply, you realize, from these depots and go to their filling stations.
“So, we’d be very glad if the pipeline subsidiary of the NNPCL would have the ability to revamp this pipeline as a result of many of the pipelines have been vandalised. So, if they’re being restored, it is going to be in a position to ease the transportation of petroleum merchandise. Merchandise will get to their vacation spot sooner, safer, and with much less price,” he added.
On the present state of the depots, he pressured that, “They’re all moribund, they’re all moribund. Just a few of them are working at an epileptic degree. The pipelines have been vandalised by vandals and bunkers. For example, for those who pump merchandise from Port Harcourt to Aba, you won’t obtain all the amount of that product. As a result of over time, vandals have perforated the pipeline to make sure that they’ll take petroleum merchandise out of the pipeline.
“So, it requires the federal government to have the ability to have a look at the product and put up safety and drones to watch the pipeline and likewise see the place most of these pipelines have been perforated, arrest the vandals, and discourage individuals from vandalising the pipelines.”
Equally, an oil and gasoline knowledgeable, Olatide Jeremiah, who spoke on the problem mentioned the depots stopped working as a result of an absence of refined merchandise for transportation.
Olatide, who runs a platform on petrol pricing mentioned, “Many of the NNPCL depots aren’t operational. In Lagos, the Ejigbo depot has been deserted for greater than a 12 months now due to the core pipeline providers they usually don’t have entry to merchandise similar to different depots scattered across the firm.
“One more reason is that their pipeline providers are dangerous and haven’t been working. so these personal depots have been practical. However the issue with the personal house owners is that they reap the benefits of conditions for his or her revenue.”
The NNPCL spokesperson, Femi Soneye, refused to talk to our correspondent on the matter when contacted, although the corporate had earlier acknowledged that it was working to get the services fastened.
Final 12 months, the nationwide oil agency mentioned it had commenced a course of to comprehensively rehabilitate 5,120km of pipelines transporting crude oil and different petroleum merchandise. It acknowledged that the preliminary stage of the method was ongoing.
PETROAN reacts
The Petroleum Merchandise Retail Outlet House owners Affiliation of Nigeria expressed confidence that the gas depots would quickly be revived.
The Nationwide President of PETROAN, Billy Gillis-Harry, mentioned the NNPCL had mobilised its officers to the depot in Port Harcourt prior to now weeks.
“The NNPCL depots are going to work. It’s not a one-month factor. Every little thing has its course of and its time. The NNPC in Port Harcourt has already deployed officers to the depot. What does that let you know? The depot is prepared for operation. It was not there within the final 9 to 10 years. Warri might be deploying workers to the depot. As soon as the depot managers and all of them are in place, it means they’re prepared for enterprise.
“Then, in fact, you continue to must undergo processes. It’s not like for those who open the refinery in the present day, tomorrow you begin shopping for merchandise,” Gillis-Harry submitted.
In his view, an knowledgeable in oil and gasoline, Professor Emeritus, Wumi Iledare, believes that revamping the refinery ought to carry again the moribund depots.
Nonetheless, he advocated for personal participation to fund pipeline infrastructure.
“The depots will come again to life once more, however it is going to require what I name upkeep. Infrastructure is essential as a result of the logistic construction is the hyperlink between what the individuals need and what the individuals need to promote. The logistic scenario in Nigeria, if corrected, may even make petroleum merchandise cheaper and more cost effective.
“For instance, shifting petroleum merchandise from the south to the east, to the west, to the north has a logistic downside. No one on this present state of financial growth ought to be shifting petroleum merchandise by highway. No! Even in Ghana, you don’t see inter-regional motion of petroleum merchandise by vans. That ought to be restricted to distribution inside cities or inter-cities, not inter-state or inter-region. These are the problems,” Iledare acknowledged.
The don emphasised that in the case of making the downstream petroleum sector efficient and environment friendly, the midstream is essential, however the midstream requires a whole lot of infrastructure funding.
He added that no person is able to put money into the midstream with no assure of some acceptable minimal returns on investments.
“If I carry my cash, I need the worth to be added at a particular proportion. Although the infrastructure fund is concentrating on pure gasoline deliverability, we have to assume when it comes to these individuals in several components of Nigeria, the petroleum product can transfer by rail or by pipeline.
“That’s why the concept of personal partnerships and consultations can come into play; supported by the federal government, however not dominated by the federal government. As for vandalism, as a substitute of placing the pipelines on the floor for now, you bury it. That may be costlier however by the point you do a time worth evaluation on it, you’ll discover that you simply’re going to be having a whole lot of financial savings for those who don’t must restore them due to vandalism.
“Second, that is the place you make group stakeholders and allow them to get some kind of reward for being a safeguard. You must get society to purchase into the worth system in order that they don’t tolerate fraud.
“Proper now, the federal government ought to take note of the midstream growth to make it enticing, in order that traders can are available in. That’s what they need to be spending cash on, not on exploration and growth as a result of that’s already a mature enterprise in Nigeria,” Iledare enunciated.
