Great that NNPC was able to keep fuel flowing for the whole of 2010 and through the holidays, but scarcity gone for good? That is some crazy talk.

For one, it is costing us to the tune of N1.5 trillion annually - that is equal to about one-third of the national budget. Combine that with the fact that we are going pan-in-hand to borrow a large chunk of this year's budget and it doesn't take a soothsayer to tell you there is SERIOUS FUEL SCARCITY in Nigeria's future!!!

Thursday, 06 January 2011

The Nigerian National Petroleum Corporation, (NNPC), on Tuesday, vowed to sustain and consolidate on the free flow of petroleum products across the country which was evident during the Yuletide and Sallah festivities.

For the first time in decades, Nigerians witnessed no disruption in the supply chain of petroleum products in sharp contrast with the recent past when artificially induced fuel scarcity was a permanent feature during the end of year and major religious festivities.

Addressing news men at the end of an assessment tour across petrol stations in Abuja and Lagos after the Christmas and New Year festivities, the Group General Manager of the Group Public Affairs Division of the corporation, Dr. Levi Ajuonuma, reiterated that the present management of the NNPC under the watch of Mr. Austen Oniwon, had resolved to ensure a sustained policy of zero-tolerance for fuel scarcity during major festivities and, indeed, all year round.

Ajuonuma stated that the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had worked closely with the NNPC to ensure free flow of petroleum products throughout the country, which characterised 2010 and efforts were being made to sustain it beyond the Yuletide.

“The NNPC’s new year tiding to the nation is that Nigerians should be ready to enjoy unimpeded supply of petroleum products all year round. I make bold to put on record that the era of product scarcity is over,” Dr. Ajuonuma noted.

He disclosed that the drive to expand the scope of operation of NNPC retail sector received extra fillip during the year as the number of acquired and affiliate stations increased to 502.

The NNPC spokesman said the move was in furtherance of the strategic plan by the NNPC to own at least 50 per cent of the entire petrol stations in the country with the aim of ending future artificially induced fuel scarcity.

http://tribune.com.ng/index.php/news/15768-fuel-scarcity-gone-for-good-nnpc

Ajuonuma doing only what PR specialists do best, lie with a smile, fuel scarcity over?

thats because Johnny boy and his team have been agreeing to all the union demands and using his ND brotherhood, will that last or will the wheel come off?

and after 50 years, we still no fit refine crude.

Unconfirmed rumour in the grape-vine is that GEJ administration
had opened the reserve oil hounded in desert silos. The northerners
have been pumping national oil underground in the north. Estimated
as so much, that it could serve the northerners need for energy in the
event of a national break-up for up to 50yrs to60yrs. Thank you President
Jonathan for opening those stolen so called reserve-oil for national circulation.

^^^ With the New Deal FG has struck with its French Partner, Nigeria will never refine crude again, we shall have others refine it for us  

http://allafrica.com/stories/printable/201002030357.html

Lagos — Government may have adopted a novel measure in tackling the acute fuel shortages in the market as Nigerian National Petroleum Corporation (NNPC) now trades crude oil for refined petroleum products from offshore refineries.

The move which is seen as a desperate measure to cut huge import bills involves earmarking crude for processing in refineries abroad under special deals.

Exchanging crude for much needed products comes after vsenior officials of NNPC denied reports of investments in foreign refineries when domestic plants lay moribund.

Business Champion gathered from sources close to the arrangement that NNPC has already pumped the first cargo for BP of Britain under a new contract that allows the oil multinational which also operated robust refining complexes across the globe to take crude for refining at equity cost.

Under the arrangement, NNPC which dispatched the first crude oil cargo on January 23 is entitled to a fair share of products that comes out of its crude oil supplies to BP.

The arrangement is coming after the Minister of Petroleum Resources, Dr. Rilwan Lukman, told stakeholders in the nation's downstream petroleum industry that government was working to restream Warri and Kaduna refineries at the end of January.

Checks on the two refineries at the weekend did indicate resumption of operations eventhough a source at the Kaduna Refinery said the management was only priming the plant for test runs after with available crude stock.

The refineries were brought down by crude feedstock outage after militants in the Niger Delta blew up the feedstock conduits in the heat of sustained campaign against the industry.

The Warri Refinery is expected process about 100, 000 barrels of crude oil per day out of installed capacity of 125, barrels per day, but the expected output would not meet 30 percent of the estimated average daily peak demand of about 35 million liters of products.

Stakeholders at a forum organized by the ministry last month had called for recovery and expansion of the nation's refining capacity as the only reliable way to phase out supply crisis and associated ills from the domestic fuel market.

Major oil marketers represented at the forum by the Deputy CEO of the Oando Group, Mr. Mofe Boyo, had declared that speedy growth of the nation's internal refining capacity was non-negotiable if government was sincere about solving supply problems in the country.

Group Executive Director, Refinery and Petrochemicals, at NNPC, Mr. Austin Oniowon, had declared at a forum in Lagos that "a lot of things have gone wrong with the management of the nation's refineries." He said the key problem with internal refining was the security issues in the Niger Delta.

According to him, the refineries could not work for four years due to 55 damaged spots along a 60 kilometer feedstock pipeline. He said while the conduit lines were being fixed, the corporation would explore use of vessels to ferry crude supplies to the refineries through the inland waterways.

He also said that proximate joint venture production sites could be linked for direct supplies to refineries to minimize their vulnerability to pipeline attacks.

The Group Executive Director, Commercial and Investments, NNPC, Mr. Aminu Babakusa, had pledged at the forum that all measures would be deployed to keep the market wet.

He, however, lamented that government was struggling with huge costs in meeting market demand through massive importation of the products.

Minister of Petroleum Resources, Dr. Rilwan Lukman, declared that NNPC was working on investment plans with foreign companies to boost internal refining capacity with greenfield plants, tasking local refinery licencees to utilize their licenses in assisting with additional capacity.

He however pointed at huge capital layout as part of the major impediments to local refinery projects.

A visiting trade delegation from India told officials of NNPC in Abuja penultimate week that Oil and Natural Gas Company (ONGC) Mittal Consortium would participate in any joint venture for a greenfield refinery in Nigeria.

Indian Petroleum Minister Murli Deora said the Indian consortium would also build a 180,000 barrels per day refinery in return for two Nigerian deepwater oil blocks.

ONGC-Mittal Energy Ltd (OMEL), the joint venture of OVL and Mittal Investment Sarl, landed two Nigerian blocks -- OPL 285 and OPL 279 -- in the 2006 round bid in return for downstream commitments either in power, rail or refining.

OMEL is the operator for the two blocks. OPL-285 is a deep-water block, where OMEL, through OMEL Energy Nigeria, holds 64.33 per cent interest and operatorship.

The other partners in the block are local Nigerian company EMO (10 per cent), and French firm Total (25.67 per cent interest). In OPL 276, Total has 14.5 per cent.

Earlier reports that government was investing in foreign refineries for offshore refining of Nigerian crude were denied by senior officials of NNPC.

The latest deal with BP may be part of the string of arrangements by NNPC to resolve the supply failure in the domestic market of Africa's biggest oil exporter, a situation which the Minister of State for Petroleum Resources, Mr. Odein Ajumogobia, said was a national embarrassment.

Mr. Ajumogobia had said at a separate forum with marketers that the current situation was going to be the last time Nigeria would suffer the embarrassment of acute scarcity of products.

We cant even be expert in something we are born with and which flows like water(this sounds almost like a proverb to qualify a f.oo.l).
We cant refine crude oil for which we are known.

And someone will come out here and try to compare Oyinbo's intellect with our own.
monkeys.

Chase the Hooligans-in-Power (HiPs) out and vote in better candidates.

Remember to RSVP -

Register;
Select and sponsor(your candidates);
Vote;
Protect your votes;

Let this be our motto for this election period.
Copy and text the motto to as many as possible on your GSM (and/or email) and several times during the voter registration period.
One Man, One Vote!!!

amazonia:

Unconfirmed rumour in the grape-vine is that GEJ administration
had opened the reserve oil hounded in desert silos. The northerners
have been pumping national oil underground in the north. Estimated
as so much, that it could serve the northerners need for energy in the
event of a national break-up for up to 50yrs to60yrs. Thank you President
Jonathan for opening those stolen so called reserve-oil for national circulation.

This must be a rumour isn't it or you formulated this info?

hackney:

We cant even be expert in something we are born with and which flows like water(this sounds almost like a proverb to qualify a f.oo.l).
We cant refine crude oil for which we are known.

And someone will come out here and try to compare Oyinbo's intellect with our own.
monkeys.

I feel you.

Yeah,blackouts gone for good too,abi?tongue in the mouth mongrels

building refineries is a double edged sword. it is a benefit and also a liability because of the pollution it will unleash on us for many generations to come. we are already a poor country. I don't know how well we will battle air, water, soil etc pollution and toxins.
so let us continue with our french trading partner jejerly.  The best solution is to strike a good deal that will give us a good upperhand so cost isn't too high.

[img]http://t0.gstatic.com/images?q=tbn:ANd9GcTz1zOlIeogB44Vg4kNUwc8mgvohKtM5Uo-asVG0Wxaf8WtZnry[/img]

Jenifa_:

building refineries is a double edged sword. it is a benefit and also a liability because of the pollution it will unleash on us for many generations to come. we are already a poor country. I don't know how well we will battle air, water, soil etc pollution and toxins.
so let us continue with our french trading partner jejerly.  The best solution is to strike a good deal that will give us a good upperhand so cost isn't too high.

I support this opinion to a degree. Pollution in form of gas flaring has made areas like Warri so hot at nite even during the harmattan's. On a second thought, building and managing refineries would be a bold step in further industrialization of our dear country.

^^ the gas being flared in some cases can be captured to fire gas plants for electricity

Jenifa_:

building refineries is a double edged sword. it is a benefit and also a liability because of the pollution it will unleash on us for many generations to come. we are already a poor country. I don't know how well we will battle air, water, soil etc pollution and toxins.
so let us continue with our french trading partner jejerly.  The best solution is to strike a good deal that will give us a good upperhand so cost isn't too high.

If thats the case many countries will do away with their refineries, best option is to builder more efficient refineries and TO BE HONEST I CANT REMEMBER THE LAST TIME NIGERIA GOT THE UPPERHAND IN ANY NEGOTIATION

Dis Guy:

If thats the case many countries will do away with their refineries, best option is to builder more efficient refineries and TO BE HONEST I CANT REMEMBER THE LAST TIME NIGERIA GOT THE UPPERHAND IN ANY NEGOTIATION

The US has done away with majority of it's manufacturing industries and offshored it to china. China is battling massive pollution as we speak. Cancer is the leading cause of death. That's the price for industrialization I guess.
To me, sooner or later after China has developed (if it ever does), Africa will be the next stop to dump industrial toxins and manufacturing and I think this will last a very long time because where else will we dump ours if we are at the bottom of the rung?
I think our government should start thinking about the future today. We can start by developing a breed of quality diplomats and looking out for our own good. I think it is possible to achieve some upperhand if we argue right rather than licking everybody's boots.

The US has done away with majority of it's manufacturing industries and offshored it to china. China is battling massive pollution as we speak. Cancer is the leading cause of death. That's the price for industrialization I guess.

first we are talking about refineries, secondly the US didn't get rid of its manufacturing because of pollution but because of competition and cost of manufacturing, even dirty coal is still producing about half of yankees electricity

Dis Guy:

first we are talking about refineries, secondly the US didn't get rid of its manufacturing because of pollution but because of competition and cost of manufacturing, even dirty coal is still producing about half of yankees electricity

i'm talking about the pollution from refineries so I can compare it to manufacturing. many run on fuel anyways. and refineries even produce more pollution.
If only you knew how strict US federal pollution regulations are. Sometimes, it's cheaper to offshore them. But i'm sure other factors are also involved such as labor cost.

I'm not saying refineries shouldn't be build. but we should also look at the other arguments. In fact, in the article you will see that the main reason why refineries aren't being built is because of the Niger delta crisis.

it may be ok for us to refine petroleum for our own use but my fear is that we will end up being an exporter of refined petroleum .govt will want the money and it will be cost effective but

Group Executive Director, Refinery and Petrochemicals, at NNPC, Mr. Austin Oniowon, had declared at a forum in Lagos that "a lot of things have gone wrong with the management of the nation's refineries." He said the key problem with internal refining was the security issues in the Niger Delta.

The refineries were brought down by crude feedstock outage after militants in the Niger Delta blew up the feedstock conduits in the heat of sustained campaign against the industry.

I don't care how the fuel is sourced and @ what cost and with which method. All I care is that fuel is flowing chikena! Thanks GEJ.

Thank God

Jenifa_:

i'm talking about the pollution from refineries so I can compare it to manufacturing. many run on fuel anyways. and refineries even produce more pollution.
If only you knew how strict US federal pollution regulations are. Sometimes, it's cheaper to offshore them. But i'm sure other factors are also involved such as labor cost.

I'm not saying refineries shouldn't be build. but we should also look at the other arguments. In fact, in the article you will see that the main reason why refineries aren't being built is because of the Niger delta crisis.

it may be ok for us to refine petroleum for our  own use but my fear is that we will end up being an exporter of refined petroleum .govt will want the money and it will be cost effective but 

First, the refining industry is part of the manufacturing industry, so in essence you cant talk of one without the other.
Second, the US still has an ongoing refining industry, and about 3 new refineries came on board in 2010 alone.
Third, a strict law does not forbid, it only requires compliance and even BP refineries built in the 1970s still comply with the 2010 strict US laws.

To the major one, the real reasons refinery are not being built in NIgeria, is not mainly due to the NIger Delta crises, but majorly because of a lack of goivernment policy to support the operations of private refineries.
Note that a couple mof private refinery licenses had been granted, yet none had been built. Why do you think that the Oil Compnaies are not building refineries of their own? a few of the problems that need to be solved by government legislation/policy are:

1. Devolve the ownership of the crude to the oil companies and not NNPC.
2. Allow anyone in the refining industry to get/buy crude oil from any source.
3. Break the monoploy of PPMC owning the products pipelines.
4. Guarantee adequate security.

The ongoing fuel availability is because of the drop in crude oil prices and thus the marketers and government are making a lot of money from the disparity in import prices and pump prices in NIgeria. The PMS is been sought from Venezuela at N26/l and sold in Nigeria at N65/l. The marketers however sell to the NNPC at an official price of N52.5/ that means that everyone is happy.

Let's pray that there is no crises and oil prices should go up, then all these brouhaha about stable fuel supply would go up in flames. For avoidance of doubt, when GEJ requested the NASS to lower the income expectation for the country due to reduction in crude oil prices, how come he didn't reduce pump price in line with the administration promise to lower pump price when crude oil prices go southwards. Simple, that was the only way to guarantee steady supply - make the differential price attractive to independent importers.

@ Akainzo, you left out the most crucial element- deregulating the prices, NO ONE will invest lost of cash in building a refinery only to have fixed or regulated prices. THATS the main reason why the new refineries have not come up. The recovery of outlay is not clear and profitability is dependent on someone else determining prices and not the market. Secondly when u say devolve ownership of the crude to the IOCs what do you mean.The projects are usually JVs or PSC so each partner sells its share of the crude using its own mechanisms. Am no expert in this area but i think thats how is should work, so a bit confused by your point on devolution.

@ Jenifa, US did not "get rid" of their manufacturing as you claim, China seized it from them due to low cost and high quality. American economists have been decrying the loss of manufacturing jobs for decades so it has nothing to do with pollution. Simple economics of comparative advantage.

mrjingles:

@ Akainzo, you left out the most crucial element- deregulating the prices, NO ONE will invest lost of cash in building a refinery only to have fixed or regulated prices. THATS the main reason why the new refineries have not come up. The recovery of outlay is not clear and profitability is dependent on someone else determining prices and not the market. Secondly when u say devolve ownership of the crude to the IOCs what do you mean.The projects are usually JVs or PSC so each partner sells its share of the crude using its own mechanisms. Am no expert in this area but i think thats how is should work, so a bit confused by your point on devolution.

Thanks for highlighting that issue, only that I embedded it in my item 1 for which you have asked for more clarifications.
Yes you are correct, all the IOCs operate either a JV or a PSC agreement and thus government already owns or control what they produce. What I propose is for NNPC to have shares in this companies and then allow these companies to sell the crude oil at the international rates to any buyer. This thus ensures deregulation and that way it would become attractive to sell to local refineries.

Note that oil prices are for the actual oil and one has to now pay for Shipping and Insurance. For the local refineries, this S&I costs would be lower and thus ensure that they are sell lower than imported refined products.

i can not believe that anybody can suggest that Nigeria should not have a refinery. and really i wonder if people only associate refinery with only petrol. a refine is a petrochemical plant. the list below shows the products you can have from refining petroleum

Fuels
•Liquefied petroleum gas (LPG)
•Ethane and other short-chain alkanes
•Gasoline (Petrol)
•Diesel fuel (petrodiesel)
•Kerosene
•Jet fuel
•Fuel oils

Other derivatives
•Alkenes (olefins) which can be manufactured into plastics or other compounds
•Lubricants (produces light machine oils, motor oils, and greases, adding viscosity stabilizers as required).
•Wax, used in the packaging of frozen foods, among others.
•Sulfur or Sulfuric acid. These are a useful industrial materials. Sulfuric acid is usually prepared as the acid precursor oleum, a byproduct of sulfur removal from fuels.
•Bulk tar.
•Asphalt
•Petroleum coke, used in speciality carbon products or as solid fuel.
•Paraffin wax
•Aromatic petrochemicals to be used as precursors in other chemical production.

imagine the number of industries you can have from this sector alone not to mention the concomitant benefit of easy source of materials for other industries and the rduction of prices of the products that are consumed directly.

you want to be a leading economy by 2020. build refinaries as fast and as much as you could. where do you guys think the simplest moulding material, plastic comes from. imagine a country that wants to a be a leading economy without a functional steel industry.

i laugh realising that people actually believe these lies of no more fuel scarcity. infact, i think apart from english and mathematics, economics must equaly be compulsory even in tertiary institutions. this i assume is necessary for our great country to attain the lofty height we desire.

if all the factors involved in the production, distribution and delivery of a product to the consumer remain within variable and unpredicatable ranges like we have now. then scarcity is not yet a thing of the past.

dont forget that the subsidy on petrol is going to be removed sooner or later, so prices are still going to hit the roof particularly with the price of crude almost at a N100 per barrel at present. the industry of course is still within the hands of a cabal i.e there is monopoly at every stage of the industry. and they are very ready to protect their interest with their oily resources.

abeg, nothing has changed

@ akinzo & Mrjingles, good responses.

@ Jennifer,

Nigeria is so so too underindustrialized to b bothered with industrial pollution against income. Dts not to support environmental pollution bt to point out dt we can still make a lot of tolerances with fairer regulations.

Modern refineries r far cleaner & efficient. Gas flaring, major environmental pollution activity, has been stopped in most civilized countries. So modern refineries simply send associated gas onward to LNG facilities wtout flaring while waste gases r returned as landfill material in d ground.

Industrial technologies, governed by stricter HSE regulations and economics, hav advanced beyond most of what we have Nigeria. It's normal to hav a dust covered community due to presence of a single cement company here, whereas modern versions r as clean as schools. Same is wt refineries, breweries, paper mills, etc.

China bigger headache is not pollution but increased industrialization. Hw much more lowly industrialized nation like Nigeria. She had better be first, industries new haven then later, environmental best-practices nation.

Our industrial HSE records is majorly due to government laxity, corruption and poverty.

On current fuel supply efforts by d government. It's a clear case of eating our tomorrow today. When international price was high, government paid subsidies from monies dt could hav been used for other developmental purposes. Now its selling low, is government saving? Y has d government postponed d evil days by paying unbearable high subsidies? At what costs r we making this postponement? It's no question of if, but when it will become unavoidable. By then what would d current wastage called subsidy would hav given us? Zero, of course. Only dt some individuals became stupendously rich from d scam. What we should have used in building infrastructures, we r blowing away to create mirage, yet d government expects us to clap for sustaining d illusion. Thanks Livi Ajuonuma ( 'open house party' indeed)

D sunset may just b near when mirage can no more form. Maybe we can still make some hay, otherwise it will b too costly definition of national foolishness.

I hear you guys @homerac7, mr jingles & Akainzo you have really good points!!!
i guess my worry is misplaced and unnecessary.

mrjingles:

@ Akainzo, you left out the most crucial element- deregulating the prices, NO ONE will invest lost of cash in building a refinery only to have fixed or regulated prices. THATS the main reason why the new refineries have not come up. The recovery of outlay is not clear and profitability is dependent on someone else determining prices and not the market. Secondly when u say devolve ownership of the crude to the IOCs what do you mean.The projects are usually JVs or PSC so each partner sells its share of the crude using its own mechanisms. Am no expert in this area but i think thats how is should work, so a bit confused by your point on devolution.

@ Jenifa, US did not "get rid" of their manufacturing as you claim, China seized it from them due to low cost and high quality. American economists have been decrying the loss of manufacturing jobs for decades so it has nothing to do with pollution. Simple economics of comparative advantage.

can you explain the part in bold?
why would a private company look on "someone else" to determine price. who will this someone else be? govt?

When international price was high, government paid subsidies from monies dt could hav been used for other developmental purposes. Now its selling low, is government saving? Y has d government postponed d evil days by paying unbearable high subsidies? At what costs r we making this postponement? It's no question of if, but when it will become unavoidable. By then what would d current wastage called subsidy would hav given us? Zero, of course. Only dt some individuals became stupendously rich from d scam. What we should have used in building infrastructures, we r blowing away to create mirage, yet d government expects us to clap for sustaining d illusion. Thanks Livi Ajuonuma ( 'open house party' indeed)

homerac7, you know fuel is heavily subsidized in the US right?
not saying this is right though. I like the phrase "eating our tomorrow today" I think that captures it well.

Many thanks to GEJ.

na2day. wait and see now.

homerac7,akainso i guys are makin alot of sense pls kip it up.