Will the repair of Nigerian oil refineries solve the problem of fuel in the country?

This issue has been very effective in causing the problem of fuel scarcity and high cost in the country, which also affects the country’s economy.

Nigeria, which has more oil resources than any other country in Africa, has spent years trying to repair these matatu to make it easier for its citizens and to develop its economy.

The return to work of the Fatakwal refinery comes after the Dangote oil refinery with a capacity of 650,000 barrels of crude oil per day.

Recently, there has been a dispute between the Nigerian oil company NNPCL and the Dangote refinery.

But what effect will the repair of oil refineries have on the business in Nigeria?

Experts in the field of oil in Nigeria believe that the crisis is not over yet, because the amount of oil that the refinery will refine every day is less than half of the amount of oil needed in the country.

Professor Ahmad Adamu of the Nile University in Abuja said that starting the refinery now will not make oil abundant in Nigeria.

“If you look at the Fatakwal oil refinery, since it started working as a small one, it can only filter 60,000 barrels per day, and you know now it can’t work 100 percent, that’s what you see now. It will not produce this amount.”

“For example, now if it is able to work at 90 percent of its capacity, then it can refine 54,000 barrels per day”, he said.

“If you look at the fuel that is used in Nigeria every day, it is 50 to 60 million liters, then you will see that if you compare it with the two to three million liters that this woman will produce, you will see that it will not have any effect on the amount of fuel needed in Nigeria”, said the oil resource expert.

Professor Ahmed Adamu said that now in the world a barrel of petrol is sold for 75 dollars in the world market, and now that every dollar is exchanged for 1,700 naira…

“Each barrel of oil contains 159 liters in it, that’s if you calculate with that money, each barrel is sold for 127,000 naira”, he said.

The expert added that if it is calculated based on this figure, it will be found that each liter of crude oil is sold for 800 naira.

“Well, if you add the cost of refining, storage and transportation, the profit of the owner and the profit of the farmer on the actual price of 800 naira per liter, you will see that the arrival of the refinery will not have any effect on lowering the price right now.” ‘, said the scientist.

He went on to say that the Fatakwal oil refinery itself, if it will buy crude oil to refine, will buy it at the market price.

“Therefore, the talk of the coming of the refinery will change the price of fuel in Nigeria, this is wrong”, he said.

The expert also said that Nigeria will continue to buy oil from abroad, because businessmen have influence, and they can go anywhere they want to get oil if that will make it easier for them to get it. inside the house.

Bashir Ahmad Danmallam, the president of oil and gas dealers in Nigeria, said that the arrival of the refinery is commendable as they have been hoping for the completion of the project.

He said there are many things that the coming of the refinery will make easier, such as the ease of getting fuel in the house and getting it easily.

Danmallam said that his group hopes that this will be a step to repair all the oil refineries in the country so that there will be easy access to oil in the country.

The president of IPMAN said that the cost of fuel or its availability depends on the price of the dollar. He said that since the dollar is traded, there must be an impact on the price of oil if the dollar rises.

But he called on the country’s government to support the business since the oil is its own and its buyers (Nigerians) are also its children.

Regarding the entry of the oil, he said that the main thing that the dealers are considering is where they can get cheap fuel, regardless of where it is in the world.

“Wherever there will be oil, whether it’s in America, Niger, England or Nigeria, we just hope it’s easy, where is the easy oil”?

Professor Adamu said that the price of oil in Nigeria will be eased if all the oil refineries in the country start working with Dangote, which will also start oil refining this year.

“If Dangote increases the oil refining project, and the government turns all its refineries to work, then this will make the price of oil easier and its availability in the country,” he said.

He also said that if all the four government refineries resume operation, that means that all of them will be able to refine at least 22 million barrels, while Dangote will be able to produce 80 million barrels, so you see if they are combined, we can get a million barrels 100 or more, which will increase Nigeria’s demand for fuel.

The economist said that at that time, Nigeria will be able to export oil to foreign countries so that it will have more income, and the GDP will increase.

“That’s when the price of fuel will go down in Nigeria because there is competition, and every woman will check the price of her counterpart so that she can also reduce it to get buyers, because at that time the refinery that sells the most and affordable, she will be more likely to come for the saro oil she refines,” said the expert.

On May 29, 2023, the president of Nigeria, Bola Tinubu, announced the removal of fuel subsidies in the country, with a promise to ensure the repair of the country’s oil refineries.

The event that caused a lot of problems related to the economy.

Transport costs have increased, and commodity prices have risen as the country’s currency has plummeted, although the government has claimed economic recovery in recent months.