Dangote Refinery Would Reduce Govt Refineries To Scrap– Ibe Kachikwu

By Ikenga Chronicles November 18, 2016

The Minister of State for Petroleum Resources, Ibe Kachikwu, on Thursday, November 17 expressed fear that the completion of the Dangote Refinery that is set to be completed in 2019 would turn the country’s refineries that President Muhamamdu Buhari is trying to revitalise to scraps.

Kachikwu, who spoke at a two-day stakeholders consultation meeting on “Draft National Gas Policy and National Oil Policy” in Abuja, was of the opinion that the refineries should be properly fixed before the completion of Dangote Refinery in 2019.

“Refineries will have to work. If time goes by and Dangote Refinery begins in 2019, we will have scraps,” he said.

The government refineries are in Port Harcourt, Kaduna and Warri, which are not producing maximally.

Following this information by Kachikwu, analysts  were of the view that Buhari who doubles as the substantive minister of Petroleum should bow his head in shame after promising during his electioneer campaign to revamp the oil industry.

Similarly, the minister decried the cost of producing a barrel of crude oil, which today stands at $28, saying it should be brought down to $18 per barrel.

Kachikwu, whose keynote address at the event was centered on “Strengthening Regulation in the Oil and Gas Sector” also talked about the need for full deregulation of the sector.

He said: “A lot of things happening in the industry for so long have been taken as a norm. If the only thing we succeed in doing is dealing with deregulation, subsidy removal, joint cash venture before December, then we are succeeding. We still refine crude oil for $28 per barrel. We have to bring it below $18 per barrel.”

Speaking on the sector’s deregulation, he said: “What is important is where are we heading to.Where we are heading is to try and free the industry so that it can do its own rule, set its own prices.”

“There are few mechanics that we still have to get in place properly. We can’t forget the fact that we still have foreign exchange challenges; we can’t forget the fact that income to government is still very tight, so you need to see how you balance that.”

“But what is important is the objective. The objective is still to fully deregulate and we have started that process. It is a continuing process and we will continue to fine-tune it until we get to where we should be.”

Stakeholders at the forum, however, called for full deregulation of the sector. According to one of the panelists, without full deregulation in the sector, it would not function as required.

Also, a government stakeholder alluded to the fact that the pump price for fuel was subsidized. He stated that the PPMC that imports the fuel sells below the importation cost price which is clear evidence of subsidization.


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