Marketers, Oil Companies Partner to Build New Refinery to Rival Dangote, NNPC
- Three oil companies and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) have signed a deal to build a new refinery
- PETROAN national president Billy Gillis-Harry said the 50,000 barrels per day refinery would be located in Akwa Ibom State
- He stated that the companies would provide the funding for the facility while the marketers act as product off-takers
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
To enhance refining capacity in Nigeria, petroleum marketers and three oil companies have signed a deal to establish a 50,000 barrels per day capacity refinery.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) inked a deal with Claridge Petroleum Company Limited and Oasis Petrochemical Products Limited for the facility on Wednesday, January 8, 2025.
Source: Getty Images
The new facility will be in Akwa Ibom State
Billy Gillis-Harry, PETROAN national president, disclosed that the deal was signed to provide Nigerians with affordable fuel.
He said the refinery would be located in Akwa Ibom State.
He said the association had signed a deal with three other companies to import cheaper fuel into Nigeria.
PETROAN disclosed in November that it would import and sell petrol below the price offered by the Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC).
However, the PETROAN boss said the import agreement was jettisoned due to the plan to build the new refinery.
He said the move became necessary as the stakeholders signed a deal to end fuel import.
According to Gillis-Harry, the firms have agreed to fund the refinery while the marketers have assured off-taking of the product, noting that the transactions and final agreements could take about one to two weeks.
PETROAN to lift fuel from the new refinery
The PETROAN leader said the association would be responsible for the products coming out of the refinery.
Punch reports that Gillis-Harry said the companies would provide the resources. In contrast, the marketers give the capacity of retail outlet owners to partner with to provide them with a guarantee to lift the products.
He said the facility could take three to five years to build, and the conditions are futuristic.
He said securing the licensing and approval from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to build the facility was straightforward.
He said the NMDPRA has no hassles in approving licenses but requires proof of qualifications.
Fuel prices crash further
The development comes amid crashing petrol prices nationwide as Dangote partners with MRS Oil to sell the product cheaper across its retail outlets.
Data shows that MRS petrol filling stations sell petrol between N939 per litre and N950, while outlets owned by 11Plc, formerly Mobil, sell the product at N980.
Experts say the new facility will further spark rivalry in the downstream sector and lead to further petrol crashes.
An energy policy analyst, Adeola Yusuf, said Nigeria has insufficient refineries to serve the growing population.
“Nigeria is currently underserved in terms of petroleum production. The country's consumption needs are vast and require more facilities to satiate. However, the players should figure out areas of competitive advantage. Everyone should not focus on PMS production alone.
Right now, there is a rising need for CNG and early players in that segment could reap the full benefit quickly,” he said.
Marketers begin fuel loading from Warri Refinery
Legit.ng earlier reported that petroleum product marketers have started lifting diesel and Kerosene from the rehabilitated Warri refinery.
Dealers also need the facility to begin petrol production to further crash prices.
The refinery became operational on December 30, 2024, following an announcement by NNPC CEO Mele Kyari.
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Source: Legit.ng
