Marketers Project Fuel Price Hike Amidst Port Harcourt Refinery Test-Run

Amid concerns over the potential hike in pump prices of refined petroleum products due to the recent crash of the naira, the Federal Government has reassured the public that the Port Harcourt Refinery is nearing operational readiness.

This was disclosed during a briefing in Abuja, where it was revealed that the refinery is currently undergoing test runs and will soon start distributing refined petroleum products to the market.

Oil marketers have been apprehensive about the implications of the naira’s depreciation against the US dollar on fuel prices, especially with the current rate standing at about ₦1,450 to a dollar.

There is uncertainty regarding the Nigerian National Petroleum Company Limited‘s ability to maintain the supply of Premium Motor Spirit (petrol) at the current rates under these conditions.

However, the Minister of State for Petroleum Resources, Heineken Lokpobiri, addressed these concerns during an event in the capital. He informed journalists that the Port Harcourt refinery is in the final stages of its test-run phase. This announcement follows the Federal Government’s previous statement on December 21, 2023, declaring the mechanical completion of the rehabilitation work on the refinery’s Area-5 Plant.

The government had also announced the completion of the first phase of the plant, with expectations to begin refining 60,000 barrels of crude oil daily after the Christmas break.

Despite the delay, the latest update from the Ministry of Petroleum Resources indicates progress towards the refinery’s full operationalization.

This development is eagerly awaited by industry stakeholders and the Nigerian populace, as it promises to enhance domestic refining capacity, reduce dependence on imported petroleum products, and potentially stabilize fuel prices amidst fluctuating global oil prices and exchange rates.

But when asked about the status of the facility on Wednesday, Lokpobiri replied, “The mechanical aspect of the Port Harcourt refinery has been completed and they are still test-running. Yesterday the MD of the refinery was here because I had to ask him what was going on.

“These were projects that are very fundamental to our survival economically, and I believe that very soon products will start coming from there. But there are several components in that gigantic structure that will take time mechanically to finalise for products to start coming.

“Recall that the Dangote refinery was commissioned by the Buhari administration but they haven’t started releasing products because it takes time. So I believe that the Port Harcourt refinery will soon come and the Warri refinery is in top gear.”

The minister further stated that “if you ask me, in the next few months we would have tremendously increased our refining capacity. I was reading a report that if we refine our products here, we will get 18 times more in terms of value addition.

“So I believe that very soon the Port Harcourt refinery and the other refineries will all come on stream. This is together with our programme on modular refineries where we are giving some people 5,000 barrels, 10,000 barrels and 30,000 barrels.”

He noted that with the summation of all these, Nigeria would be able to solve its energy needs and also supply refined products to West Africa.

On the cost of PMS, going by the crash of the naira against the dollar, the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu in a chat with Punch stated that the price of the commodity might rise.

He said, “We commend the NNPC for being able to provide PMS, but the truth is that the rise in dollar is affecting every commodity in Nigeria and PMS might not be an exemption any time soon. So it is likely that we may see a hike in its price.”