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Price of petroleum products may crash soon

Ibe Kachukwu flagged off the construction of the first modular refinery in Imo state.



Nigerian Minister of state for petroleum, Dr Ibe Kachukwu, on Thursday, flagged off the construction of the first modular refinery in Imo state; pioneered by Waltersmith Refining & Petrochemical Company Limited.

The mini-refinery is one out of 2 proposed to augment crude oil production currently undertaken by the 3 sluggard refineries located in Kaduna, Owerri and Portharcout.

The Minister in the company of Managing Director of NNPC, Dr. Maikanti Baru to mark the ground opening ceremony of the new refinery at Ibigwe, Ohaji Egbema Local Government Area of Imo State.

The 5,000 capacity modular refinery is a child of Waltersmith Refining & Petrochemical Company Limited and an investment of $10 million from Nigerian Content Development and Monitoring Board (NCDMB) signed in June, this year.

Speaking at the occasion, the honourable minister tagged the project as a liberating effort to free the economy from heavily fending on oil importation. The minister registered optimism while noting strategy underway to awaken conventional refineries and see them operate at full capacity. Emphasising the role played by the indigenous refinery (working in full capacity) on cost saving and could possibly be channelled to other segments of the economy.

“The federal government is interested in revamping the existing four refineries in the country in 2019… it will be a shame if by the end of 2019 we are still hopping around the globe searching for where to import petroleum products.”

The minister also hinted on the delay in passage of the PIGB saying it will soon take effect, however, undergoing legal finesse to establish a mutual benefit for concerned parties.

Abdulrazaq Isa, Chairman and Chief Executive Officer of Waltersmith Refining and Petrochemical Company Limited, gave a 1 year and six months deadline for completion of the refinery and possibility of expanding output to 30,000bpd. The energy company has already entered into an agreement through MoU with China’s PCC to actualise its expansion plan before 2020.

“Waltersmith would be in a position to contribute about 271 million litres of refined products (diesel, kerosene, HPFO and naphta) annually.”

3 underperforming Mega refineries

Despite the promising project and what it hopes to deliver in terms of increased revenue, foreign reserve and cut in the importation of petroleum products, there are, however, pertinent questions.

The country’s refineries located in Kaduna, Port Harcourt and Warri have been recorded to perform below expectations, failing to meet the high demand for energy from the teeming population in both home and international market. These refineries built and equipped years ago have degenerated under a heavyweight of low maintenance amongst other throbbing issues.

The deteriorating state of the country’s refineries ignited the move to grant 37 licenses to private firms between 2012 and 2017 which would compete for the nation’s energy sufficiency. Thus, introducing Dangote Refinery Plc, promising 650,000 barrels per day (bpd); a high-held solution to alleviate petroleum shortages faced in Nigeria.

Modular refineries are smaller in size hence reduced cost implication, more flexible and would necessarily not require huge maintenance system, the primary cause of conventional refinery’s death.

It should be understood that the cankerworm that put the 3 mega refineries to rest is still very much active.

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Economy & Politics

CBN extends Covid-19 forbearance for intervention loans by another 12 months

CBN will continue to charge an interest rate of 5% for its intervention loans for another 1 year.



New CBN guidelines ban MMOs, PSPs, Operators from receiving diaspora remittances

The Central Bank of Nigeria has announced an extension of its regulatory forbearance for the restructuring of its intervention facilities by another 12 months.

In a circular signed by Dr. Kevin Amugo, the Director of Financial Policy and Regulatory. the apex bank said it will continue to charge its borrowers an interest rate of 5% per annum as against the 9% originally offered. The CBN had on March 20th reduced the interest rates on its intervention loans from 9% to 5% as part of its response to the economic crunch brought on by Covid-19 induced lockdowns.

The CBN also offered to rollover moratorium granted on all principal payments on a case by case basis. All credit facilities had been granted a one-year moratorium starting from march 1, 2020 when the pandemic first gripped Nigeria.

See excerpt from Circular

“The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from 9% to 5% per annum for one-year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 Pandemic on the Nigerian economy.”

Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

Following the expiration of the above timelines, the CBN hereby approves as follows:
1) The extension by another twelve (12) months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities;

2) The roll-over of the moratorium on the above facilities shall be considered on a case by case basis.

What this means

Companies who secured intervention funds from the CBN or through any of its on-lending banks will continue to service the loans at an interest rate of 5% per annum instead of 9%.

  • They can also get another year of not needing to pay back the principal sum collection. However, they will need to apply.
  • Whilst this move helps the small businesses continue to manage their cash flow, it means the CBN will record a reduction in its income extended under such facility.
  • Regulatory forbearance is a widely adopted concept during an economic crunch and it is meant to help stimulate businesses. These pronouncements if implemented will only affect those who borrow from the CBN or BOI but those who do not will miss out.
  • Download the circular here.


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LNG boss tasks FG to begin the monetization of Nigeria’s gas

Mr Attah has urged the FG to take the gas sector more seriously as the future of Nigeria’s energy lies with it.



The MD and CEO of Nigeria LNG Limited Mr. Tony Attah has tasked the Federal Government to begin the revamping and monetization of the Gas sector in Nigeria.

He made this statement while making his presentation at the 2nd virtual Nigerian Gas Association (NGA) Industry Multilogues, with the theme: “Powering Forward, Enabling Nigeria’s Industrialization via Gas.”

Mr. Tony Attah drew the attention of the audience to the hidden treasure in the Nigerian Gas industry which he believes is not getting enough attention from the government.

On the future of gas as an alternative energy source, Mr. Attah stated that the developed world is already keying into gas as an alternative to crude oil. Gas has proven to be a cleaner and more sustainable alternative.

He exclaimed that Nigeria is very rich in gas and yet poor in energy. Nigeria is the 9th country with the largest gas reserves in the world but makes very little use of it.

Mr. Attah went further to paint a clear picture of the promise of investing in gas using the success achieved by Qatar. Qatar is currently the largest LNG exporter in the world.

We just touched on a quick case study of Qatar. Someone mentioned Qatar already from a poor fishing country to a gas giant and it took just 10 years, which is why we, as Nigeria LNG, firmly believe in the conversation and the narrative about the declaration of the decade of gas.

“We believe it is possible. If you look at Qatar from 1995, when they really went into gas development, we were just two years behind Qatar. So, Qatar’s first LNG was in 1997.

Nigeria’s first LNG was in 1999, just two years behind. But then, within 10 years, because of the deliberateness of the government and focus on gas, they have gone to 77 million tonnes and we are at best, 22 million tonnes,” Attah said.

Mr. Attah stressed further the importance of the gas sector in Nigeria’s future. He recalled that the Nigerian Government declared 2021-2030 as the decade of gas. He pleaded with the government to take the sector more seriously as the future of Nigeria’s energy lies with it.

Gas is the future. That future is now, and just as the Minister of State has made us to realize, gas is food in fertilizer. Gas is transport as you saw in the Auto gas project that was declared.

Gas is life, as a matter of fact, for cooking, for heating, for existence. Gas is development in manufacturing, gas is power. Gas is everything. “We think it’s time for gas. It’s time for Nigeria to diversify and that is why we fully support the decade of gas,” he said.

What you should know

  • Early last year, the director of the Department of Petroleum Resources (DPR) Mr Sarki Auwalu confirmed that Nigeria’s proven gas reserve stood at 203.16 trillion cubic feet.
  • Nigeria has the 9th largest gas reserves in the world. It is also the 6th largest exporter of gas.
  • The Federal Government declared the year 2021–2030 as the “Year of the Gas“. It pledged to finally kick start the development and commercialization of Nigeria’s huge gas reserves.

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