Major crude oil producer Nigeria aims to overcome its chaotic and crumbling refining sector to produce at least a fraction of the gasoline it needs to use itself. Its state oil company hopes that domestic plants can cover 20 percent of Nigeria's gasoline needs, the head of refining told Reuters. President Muhammadu Buhari, who oversaw much of the refining system's development, is keen to reduce reliance on costly and graft-ridden subsidised imports.
Ian Udoh, the group executive director of refining and petrochemicals, said that he expected to receive six cargoes a month of Nigerian Bonny Light and Escravos crude oil to run 180,000 barrels per day (bpd) or 40 percent, of Nigeria's total refining capacity. He expected to produce 8 million litres a day of gasoline, accounting for about 20 percent of Nigeria's estimated consumption.
During the last eight months, no crude was sent to the refineries, said the company contracted to deliver the oil. A government document also showed that the deliveries stopped last year but a month earlier, in October. Nigeria has wholly depended on subsidised fuel imports and crude-for-product swap agreements and suffered acute fuel shortages in May. The government's anti-corruption and security services are investigating the intricate structure of oil swaps deals. The crude in those contracts is taken out of the domestic allocation.
Due to the dilapidation of pipeline infrastructure, refineries depend on sea deliveries. Since 2011, Nigeria based PPP Fluid Mechanics Ltd has been delivering crude for the state Nigerian National Petroleum Corp and an official there said no explanation was given for the supply halt. "We were contracted to deliver 1.65 million barrels a month to Warri and 3.12 million barrels to Port Harcourt," the official at PPP Fluid Mechanics said.