By Ibilola Amao

Nigeria needs to establish a Refinery and Petrochemical Plant Development Commission (RPPDC) to increase its GDP, deregulate the downstream sector of its oil and gas industry and remove fuel subsidy to avoid bankruptcy and anarchy.

It is no longer news that Nigeria can not afford to sustain its export of crude oil and importation of petroleum products at a subsidised cost which is estimated to be between N1.2 and N1.5 trillion per annum. Fuel subsidy would be better spent on improved infrastructure, health, education and job creation through the promotion of SME’s to jump start a vibrant economy.

Deregulation is a necessary step that must precede investment in refineries. However, Nigeria needs to have in place the necessary framework, resources, fiscal terms, conducive environment and instrument of Government that would act as an enabler for investors who just may be interested in locating a refinery within its shores.

Without increased local refining capacity, the removal of subsidies would be tantamount to robbing Peter to pay Paul as the same fat cats who are involved in the export and import business would jeopardise the good intent of deregulation and begin to extort money from the masses through a hiked price of products which has been the case whenever there is fuel scarcity.

There is a need to have a government commission that is specifically assigned with the task of accelerating the establishment of refineries (modular and standard). An investor friendly process which removes repetitive and non-value adding requirements for data, certificates, reports, proposal and financials and has the required synergy to prevent duplicity of effort would go a long way to encouraging investment in the design and construction of new refineries.

Struggling through DPR, NNPC, FIRS, Ministry of Environment and Financial Institutions is too cumbersome for investors who are used to non-complex processesA commission would act as a one stop shop and remove encumbrances that pose a deterrent to investment in the downstream sector of the Nigerian economy thus reducing project costs..

Every committed government that intends to achieve a goal, such as increased in-country refining of crude oil and production of a surplus of finished products for export, in an accelerated, transparent and fair manner would be wise to use a commission with key performance indicators (KPI’s) to drive such a target.

If the penalty for non-performance should be clearly stated in the appointment letter issued to the Director General, a clear and ethical road map for investors would be adhered to and implemented.

Specific objectives for a refining and petrochemical development commission would include:

1. Examining the existing policy, legal, regulatory and institutional framework on refinery development in Nigeria vis-à-vis approvals being sought and concluded within 3 months.

2. Providing the framework for registration with CAC, Ministry of Environment etc and issuance of DPR License to operate a refinery whilst ensuring that all bottle necks that had hitherto resulted in non-performance are removed from the implementation process.

3. Examining the issues which need to be addressed at national and regional levels for the purpose of promoting optimal refinery development in the most viable locations for establishing a refinery.