The Chairman, Senate Committee on Petroleum Resources (downstream), Magnus Abe on Friday said the reasons why investors are not willing to build refineries in Nigeria is because it is not profitable.
Mr Abe, who was a guest on Channels Television’s breakfast programme, Sunrise Daily, said there are refineries in Sierra Leone and Amsterdam that are operated with Nigeria’s money.
“People go to the bank to get guarantee, buy crude from Nigeria and send to these refineries and the refineries are paid. Whether subsidy or no subsidy is irrelevant to that refinery,” he said.
The Senator said there is no relationship between deregulation and the building of more refineries in Nigeria. “These issues are totally not related,” he said.
“To me, why we are not building refineries in Nigeria may be one, because of the infrastructural and security challenges but more importantly, maybe we are not taking enough advantage of the fact that we are actually producing crude in this country to give guarantees to people to say listen if you build your refinery in Nigeria we promise you that you will have first charge access to our crude, we will sell to you who is refining in Nigeria before we sell to anybody who is taking it out,” he added.
Responding to the question on why the existing refineries are not functioning optimally, Mr Abe said “there is a clear incentive to the refineries not to operate at a 100 percent capacity.
“If I own a refinery in Nigeria and then you give me product and I can go and sell those products outside, I’ll probably make more money than if I refine it here, how is that an incentive to me to refine the product here?”
