Rising fuel costs remain a critical issue for Nigerians, with conversations around the nation’s oil and gas sector sparking widespread debate. In a recent discussion hosted by New Central’s flagship programme, A Place at the Table, industry experts dissected key issues ranging from subsidy removal to refinery operations, offering insights into the challenges and possible solutions.
The chat featured prominent voices, including journalist David Hundeyin, Kelvin Ayabafye of Dairy Mills, and Olajumoke Ajayi, Managing Director of Asharami Energy Limited. They highlighted systemic failures, government policies, and operational inefficiencies that have exacerbated Nigeria’s fuel woes.
Subsidy Removal and Its Ripple Effects
The removal of fuel subsidies by the government has been a contentious issue, with critics arguing that the decision was poorly timed and lacked a viable framework for economic cushioning. “The president is the reason why we are here. He came on board with bad policies,” noted legal practitioner and activist Deji Adeyanju during the chat. He pointed out that fuel prices have skyrocketed from ₦157 to over ₦1,000 per litre, driving inflation and increasing the cost of living.
David Hundeyin added that the subsidy removal has exposed the inefficiencies in Nigeria’s oil and gas sector, particularly its reliance on imported Premium Motor Spirit (PMS). “We are giving away Nigeria’s crude oil in exchange for PMS of questionable quality,” he said, calling the practice unsustainable and harmful to the economy.
Port Harcourt Refinery: Refining or Blending?
The Port Harcourt refinery has been at the centre of the debate, with government officials claiming it is operational. However, experts cast doubt on these assertions. Kelvin Ayabafye explained that the facility lacks the necessary infrastructure to refine PMS.
“The refinery operates as a blending plant rather than a full-scale refinery,” he said, pointing out that critical components, such as a crude distillation unit and catalytic reformers, are absent. He also questioned the source of crude oil feedstock, given that the pipeline connecting the refinery to the Bonny River Terminal has been out of service since 2019.
This discrepancy, he argued, underscores the government’s struggle to maintain transparency. “If the Port Harcourt refinery were truly refining, there would be evidence in the form of petroleum gases, which are natural by-products of PMS refining,” Ayabafye added.
Dangote Refinery: A Benchmark for Efficiency
The recently commissioned Dangote Refinery has emerged as a shining example of what Nigeria’s refining sector could achieve with proper investment and management. Unlike the Port Harcourt refinery, Dangote’s facility has successfully begun operations, producing high-quality PMS and other petroleum products for domestic and international markets.
“Dangote doesn’t need to prove he’s refining; the quality of his products speaks for itself,” Ayabafye remarked, contrasting this with the government’s efforts to validate Port Harcourt’s functionality.
Way Forward
The panel concluded that Nigeria’s oil and gas sector requires urgent reforms, including greater accountability, investments in infrastructure, and diversification of energy sources. Olajumoke Ajayi, representing the upstream sector, emphasised the need for a holistic approach to address systemic issues.
“Without a functional framework, we are merely plugging holes in a sinking ship,” she said.
As Nigerians continue to grapple with soaring fuel prices and economic uncertainty, the call for transparency and efficiency in the oil and gas sector grows louder. Whether these conversations will translate into tangible change remains to be seen, but one thing is clear: the status quo is no longer sustainable.
