Nigeria’s demand for petroleum products to increase by 14.6% in 2025
October 29, 2021
THE demand for petroleum products in Nigeria will increase to 17.3 million metric tonnes, MT, from 15.1 MT in 2020, indicating an increase of 14.6 per cent, according to the Nigerian National Petroleum Corporation, NNPC.
The expected demand, to be fuelled mainly by increased utilization of products as the private and public sectors continue to recover from the Coronavirus pandemic, would require increased investments sector-wide.The Group Executive Director, Downstream, NNPC, Engr. Yemi Adetunji, disclosed this at the just-concluded OTL Africa Downstream Week 2021, in Lagos.He said: “Demand for petroleum products is expected to grow from 15.1 million MT in 2020 to 17.3 million MT by 2025.
“Demand will stimulate investments in refineries particularly condensate and modular plants.
The economy is projected to grow by 2.4% in 2021 as against the 1.8% initial projection in January 2021.”
In his presentation, “Nigerian Fuels Market, Post-PIB ”, Adetunji noted that the nation should work towards increasing its refining capacity from the current 445,000 barrels per day.
He said: “Nigeria needs 1.52 million barrels per refining capacity to meet current demand.
“NNPC and its partners are adding 215,000 barrels per day, BPSD & 250,000 BSPD capacity via co-location and condensate refineries, respectively.”
He also said: “Modular refineries like the Waltersmith refinery located in Imo state will play a key role in meeting demand.
“Additional refining capacity is required to meet current demand.
Product importation due to inadequate in-country refining.
“An increase in crude price and Forex rates continue to push landing costs higher. PIA provides for unrestricted free market-determined pricing for petroleum products.
“Need for alternatives will create new market opportunities like Autogas and Electric Vehicles (EVs).
“Global decarbonization efforts to switch to renewables in response to environmental concerns. PIA supports a shift to gas creating new opportunities in the fuels market.”
Similarly, the Executive Secretary, Major Oil Marketers Association of Nigeria, MOMAN, Mr. Clement Isong, said the implementation of the Petroleum Industry Act, PIA, would go a long way in stimulating the sustainable development of the downstream sector in particular and the oil and gas industry in general.
He said: “Removal of price controls thereby eliminating subsidy/under-recovery and providing for cost recovery for market players to provide for the funding of necessary maintenance and renewal of assets, such as depots, refineries, pipelines, trucks and filling stations – resulting in the sustainability of downstream operations.
”The provision an enabling environment to encourage the establishment of a sustainable landscape to set Nigeria as the refining hub of West and Central Africa.
“Creation of a strong regulator to ensure transparent and tight governance in all downstream operations, including the compliance to best practices in health, safety and quality standards.
“Promote a level playing field to eliminate all forms of anti-competitive behaviour.”
Earlier, in his keynote address, the Group Managing Director of NNPC, Engr. Mele Kyari, had noted that about $3.097 billion investment opportunities existed in condensate refineries, while $1.6 – $2.7 billion was required by NNPC to improve the supply and distribution of petroleum of products.
He has said: “The NNPC Refineries’ 445,000 BPSD and Dangote Refinery’s 650,000 BPSD running at 60 per cent capacity respectively would supply 76 per cent of Nigeria’s PMS requirement.
“This will leave a shortfall of about 17 million litres of PMS daily. NNPC is adding 215,000 BPSD of refining capacity through private sector-driven co-location at the existing facilities in Port Harcourt Refinery and Warri Refinery respectively.
“Modular refineries are also adding capacities, such as the 5,000 BPSD Waltersmith refinery which will be upgraded to 50,000 BPSD.
“Additional 250,000 BSPD is expected to come from the Condensate Refineries through the private sector partnership.”
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