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LCCI calls for legalization of ‘little refineries’


Rather than clamping down on illegal refineries in Niger Delta, the Lagos Chambers of Commerce and Industry, LCCI, has called on the Federal Government to find a way of encouraging them to reduce the incidence of petroleum products importation.

Recently, government blamed the loss of about $7billion annually from crude oil theft to the activities of illegal refineries, has urged to stop destroying the refineries.

However, the Vice President of LCCI, Mr Adam Idufueko, during the LCCI 2012 Business Clinic of the Petroleum Downstream Group in Lagos, argued that rather than destroying such little refineries, as he called them, they should be empowered to do it the right way.

He said, “People who operate illegal refineries should be empowered to do the right thing. When they are taught the right thing, they will do it well and in the next two to three years we may no longer import petroleum products in the downstream sector.”

He noted that it was shameful that since the first refinery was constructed in 1963, Nigeria is still a major importer of refined petroleum products.

Idufueko further argued that the issue was not about lack of funds, as the country had enough money from oil revenues to build more refineries judging by the amount of money paid to subsidise the importation of premium motor spirit, PMS, as revealed in the recent subsidy payments probe.

Speaking on, “Sharp Practices in the Downstream and its Effects on the End User,” the Director of the Department Petroleum Resources, DPR Mr. Osten Olorunsola, noted that the downstream petroleum sector was reputed for a lot of sharp practices.

Olorunsola, who was represented by one Mr. Alphonsus Mudei, said such malpractices impacted on the end users negatively.

He reveled, “Some of the sharp practices in retail outlets operations include false declaration of distance between site and station to qualify for Approval to Construct, doctored photographs of stations to quicken receipt of license for the station. We have also seen situation where operators present false certificate of pressure/leak test and tank burial report.

He maintained that the requirement put in place by the DPR is to ensure that petroleum facilities are safe in the oil and gas sector, adding that tanker drivers and station owners still diverted petroleum products to unauthorised outlets in order to optimise profit.

“DPR has repeatedly warned tanker drivers not to divert petroleum products to unauthorised sites, and adjusting dispensing pumps thereby under-delivering, and illegitimately increasing their product stock and income.”

Explaining the effects of the sharp practices by operators in the downstream on the end users, Olorunsola said diversion of products leads to artificial scarcity in areas from where the product is diverted.

“Adjusting dispensing pumps automatically means stealing from the buyer and shot-changing them,” he said.


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