Oil marketers have urged the Nigerian National Petroleum Company Limited (NNPCL) to expedite the rehabilitation of its 21 depots nationwide, following the revival of the Port Harcourt and Warri refineries. The marketers believe restoring the depots will amplify the benefits of having functional refineries and reduce operational costs in the downstream sector.
The marketers, under the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized the importance of reviving the depots, which would minimize reliance on private tank farms and reduce the cost of transporting petroleum products. IPMAN’s National Publicity Secretary, Chinedu Ukadike, highlighted that pumping products through pipelines to depots would lower costs, reduce road hazards, and enhance efficiency.
He explained, “The Port Harcourt refinery is designed to supply products to the Aba, Port Harcourt, Makurdi, and Enugu depots, while the Warri refinery caters to the Middle Belt region. The Kaduna refinery is meant to serve the northern states. Reviving the depots and pipelines will ensure products are distributed efficiently and cost-effectively.”
The decline in domestic refining and a shift to fuel imports had led to the neglect of NNPCL’s depots and pipelines, causing increased reliance on road tankers and private depots. Currently, most NNPCL depots are moribund, with only a few operating at minimal capacity. Investigations revealed that vandalism and obsolete infrastructure have rendered the pipelines ineffective.
A report from NNPCL’s 2023 financial statement showed the company spent over N434 billion on pipeline maintenance and payments to private depot owners between 2022 and 2023. This included N44.27 billion in throughput charges paid to private depot owners.
Commenting on the situation, an oil and gas expert, Olatide Jeremiah, noted that most NNPCL depots, including the Ejigbo depot in Lagos, had been abandoned due to inadequate pipeline services and lack of refined products. Jeremiah criticized private depot owners for exploiting the situation to maximize profits.
Similarly, Professor Emeritus Wumi Iledare emphasized the need for private sector involvement in funding midstream infrastructure, such as pipelines and depots, to ensure long-term efficiency. He advocated burying pipelines to curb vandalism and engaging communities as stakeholders to safeguard the infrastructure.
Meanwhile, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) expressed optimism about the ongoing efforts to rehabilitate the depots. PETROAN’s National President, Billy Gillis-Harry, disclosed that NNPCL had already mobilized officials to the Port Harcourt depot, signaling readiness for operations after years of dormancy.
“The NNPCL depots are undergoing a phased revival. The Port Harcourt depot is already being prepared for operation after nearly a decade of inactivity, and similar efforts are underway in Warri,” Gillis-Harry stated.
Despite these efforts, stakeholders insist that the government must prioritize midstream infrastructure to enhance the downstream petroleum sector’s efficiency. They argue that the focus should be on creating an attractive investment climate for private sector participation, reducing reliance on road transport, and ensuring the sustainable operation of the country’s depots and pipelines.
