Page 15 - AfrOil Week 22a 2020

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Nigeria needs to encourage modular refineries, OPAC says
NIGERIA
NIGERIA’S government needs to do more to spur the development of local refining and reduce reliance on fuel imports, the head of a modular refinery under construction in the country has said.
Momoh Oyarekhua is the director of the 7,000 barrel per day (bpd) OPAC modular refin- ery being built in Kwale in Nigeria’s Delta State. In a statement on May 27, he said that by over- coming imports, Nigeria would save its foreign currency reserves, which could be funnelled into other key areas of its economy.
“More investment is needed to increase our local refining capacity,” Oyarekhua said.
“The government should provide specific ‘Target Framework’ to further support and encourage local investors in this sector to ensure that we produce enough for our local consump- tion and export, as well as earn more foreign [currency] while creating jobs too,” he added.
OPAC is one of only a handful of modular refineries that have been cleared for develop- ment by Nigerian President Muhammadu Buhari. According to Oyarekhua, the facility is
now 98% complete.
Test work, which had been due to take place
in March, was delayed because of the lockdown imposed to slow the spread of the coronavirus (COVID-19) pandemic.
Nigeria’s Waltersmith Refining & Petro- chemical (WR&P) also plans to complete a 5,000 bpd modular refinery at the Ibigwe oilfield in Imo State in the second half of this year.
The country’s dependence on fuel imports has grown further since Nigeria National Petro- leum Co. (NNPC) opted to close down the state’s loss-making refineries while it searches for financing to upgrade them.
There are also many illegal refineries work- ing in Nigeria’s Niger River region. The gov- ernment has long sought to clamp down on this activity, but unauthorised fuels remain widespread across the country. Surprisingly, recent research by the Stakeholder Democracy Network (SDN) concluded that official gasoline and diesel imports typically are of worse quality than the supplies produced at illegal domestic plants. ™
Court gives small Zimbabwean fuel retailers import rights
ZIMBABWE
SMALL fuel retailers in Zimbabwe are now per- mitted to import fuel, after the country’s high court overturned regulatory rules that led to only eight major companies receiving the right.
The Zimbabwe Energy Regulatory Authority (ZERA) earlier this year issued import licences to Total Zimbabwe, Glow Petroleum, Ram Petroleum, Genesis Energy, Vivo Energy, Zuva Petroleum, Sakunda Petroleum and Redan Petroleum. However, it barred companies with fewer than 15 filling stations from bringing fuel in from abroad.
ZERA argued that these smaller players had little impact on national supply and therefore it was not necessary to provide them with import rights. The regulator’s decision was challenged at the high court by the Indigenous Petroleum Association of Zimbabwe (IPAZ) and the Direct Fuel Imports (DFI) group, however. The
licensing process lacked transparency, set unfair barriers and encouraged monopolistic practices, the groups argued.
Following the court’s verdict, smaller fuel retailers can now bring in fuel temporarily under licences issued last year.
ZERA had earlier wanted to restrict fuel licences to only companies with 25 filling sta- tions or more, before lowering the number to 15. It also charged firms up to $2mn for these licences.
Zimbabwe has been struggling for years with crippling fuel shortages and the IPAZ and others argue that greater market liberalisation would help alleviate the problem. A lockdown imposed in late March to combat the corona- virus (COVID-19) pandemic led to a collapse in fuel demand. But with measures now being eased, shortages have resurfaced.
Week 22 03•June•2020 w w w . N E W S B A S E . c o m P15