….Removes statutory deposits for refineries
Apparently posed to encourage more local refinery and gradually discourage importation of petroleum products, the federal government last week removed the statutory deposit of US$1 million for every 10,000 barrels refinery capacity as provided for in its latest Guidelines for the Establishment of Hydrocarbon Processing Plant in Nigeria.
According to the Department of Petroleum Resources (DPR) which announced the decision on behalf of the federal government, the removal does not affect other conditions as contained in the 2007 guidelines for the establishment of private refineries remains applicable.
According to the statement: “The DPR wishes to inform the public that the Honourable Minister of Petroleum Resources has approved the elimination of the payment of the statutory refinery commitment deposit of US$1 million for every 10.000 BPSD refining capacity as contained in section 11 sub-section 2.1.1(iv) and section 111 sub-section 3.4.2 (iv) of the Guidelines for the establishment of Hydrocarbon Processing Plant (Refinery and Petrochemicals) in Nigeria.
“The Department of Petroleum Resources wishes to state that this is part of government’s strategy to encourage private sector participation in crude oil refining and also its desire to locally refine 50 per cent or more of Nigeria’s crude oil.”
The development is seen by industry watchers as a bold move to encourage the springing up of more private refineries in the country and encourage more private sector participation in crude oil refining and to ensure that about 50 per cent or more of Nigeria’s crude oil is refined locally.
Industry sources confirm that Nigeria currently imports more than 90 per cent of her petroleum products requirement because all her refineries are working at a terribly low capacity. The total installed capacity is about 445,000 barrels per day.