Nigerian government considers deregulating downstream oil sector

Nigeria's government is considering deregulating the downstream sector in efforts to overcome scarcity of petroleum products, OPEC's news agency reported Wednesday. The state-run Nigerian National Petroleum Corp. (NNPC) has controlled the refineries, but government officials want to open the sector to competition.


By the OGJ Online Staff

HOUSTON, May 23 -- Nigeria's government is considering deregulating the downstream oil sector in efforts to overcome a chronic scarcity of refined products, the Organization of Petroleum Exporting Countries' news agency reported Wednesday.

The state-run Nigerian National Petroleum Corp. (NNPC) has controlled Nigeria's four refineries, but the government believes better efficiency could be achieved by breaking the monopoly.

The governors of Nigeria's 35 states collectively declared their support for the proposed liberalization while meeting with Nigeria Vice-Pres. Atiku Abubakar during the weekend.

Meanwhile, a government-appointed committee on liberalization embarked on a nationwide tour educating the public about the benefits of opening the downstream sector. Officials promise more petroleum products would be available at lower prices.

Nigeria's four refineries have a combined nameplate capacity to process 438,750 b/d of crude. The Kaduna refinery has 110,000 b/d capacity; the Alesa Elema refinery has 60,000 b/d capacity; the Port Harcourt refinery has 150,000 b/d capacity; and the Warri refinery has 118,750 b/d capacity.

NNPC officials said improvements at the Warri, Kaduna, and Port Harcourt refineries have increased kerosine and diesel production enough so those products soon will be exported. The four refineries combined are processing 330,000 b/d of crude.

Despite processing at the highest level in 10 years, Nigeria's refineries still cannot satisfy the domestic demand for gasoline because of increased consumption and also smuggling, NNPC officials have said (OGJ Online, Apr. 25, 2001).

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