The near-decrepit state of the nation’s four refineries, whose privatisation is expected to begin in the first quarter of 2014, has continued to slow down the growth of the vital petrochemicals industry.
Activity in the refining and petrochemicals industry is expected to receive a major boost as government looks to transfer ownership and operation of the state-owned refineries to private investors. One example is the 400,000-barrels per day (bpd) refinery being built by Aliko Dangote, which comes on stream in 2016.
“There is no doubt that the petrochemicals industry in Nigeria would be boosted if our domestic refineries are working efficiently,” said Adeola Adenikinju, professor of Economics and director, Centre for Petroleum, Energy Economics and Law, University of Ibadan.
Refineries are very important to the petrochemicals industry because they are major sources of feedstock used by petrochemical plants. Oil refineries produce olefins and aromatics which are very useful as raw materials and feedstock in chemical and plastic industries and in the production of synthetic rubbers.
The country’s low refinery-capacity utilisation over the years has resulted in lower petrochemical yields, creating a need for imports.
Nigeria has two refineries in Port Harcourt, one each in Warri and Kaduna, with a combined capacity of around 445,000 bpd, but they operate well below full capacity owing to years of mismanagement and corruption.
