OTL Africa Downstream Energy Examines Nigeria’s Refining Output Challenges

The OTL Africa Downstream Energy which began in Lagos on Monday has highlighted challenges facing domestic refining as stakeholders seek a review of feedstock strategy to bridge supply gap to local refineries.
Speaking during the opening ceremony Otunba Adetunji Oyebanji Chairman, Advisory Board
OTL Africa Downstream Energy Week notes that though additional African refining capacity creates opportunities, but its benefits depend on securing feedstock, operating efficiently and connecting production to demand.
At the same time, cleaner fuels, gas, renewables and changing mobility
choices are influencing investment decisions. Though the pace will vary across countries, he said it is a collaborative responsibility to develop commercially sound options that reflect African purchasing power, infrastructure and industrial needs, while improving safety and environmental performance.
Oyabanji, sayd that businesses need
to compare experience, understand policy direction and identify partners
before committing scarce capital. Governments need an informed view of
the conditions under which investment will deliver reliable service to
consumers.
“The value of this year’s discussions
Our programme brings these questions into practical focus. Regulatory Convergence and the West African Fuels Congress will examine how national frameworks and regional markets can work more effectively together.” he noted.
He expressed the conviction that competition in Nigeria’s new downstream market will address the balance between investment, market power and consumer protection.
Across the Streams and the African Energy Outlook will help participants assess integration and emerging business opportunities, pointed Oyebanji, stressing that feedstock strategy and refinery competitiveness will consider what it takes to sustain efficient production, while Future forecourt solutions and
customer behaviours will bring the discussion to the changing needs of the customer.
Also he said that scaling energy options will explore gas and renewables through
processing and infrastructure.

For the refinery to work it needs dependable feedstock and customers; a storage terminal needs efficient transport; and every investment needs rules that sustain confidence., he said.
According to him, “There is much still to address. Some markets remain heavily import dependent, infrastructure is uneven, and foreign exchange constraints continue to complicate trade. Investment has not everywhere translated into affordable supply. Yet there is sufficient progress to justify
confidence, provided we remain honest about the work ahead.”

He cited the International Energy Agency’s October assessment which highlights sustained pressure on diesel supplies and exceptionally high
freight costs.
Analysing it further Oyebanji noted that frican businesses feel these pressures through more
expensive cargoes, larger working-capital requirements and uncertainty
over delivery schedules.
“For our markets, the implications extend beyond the price of crude.
Access to suitable tankers, insurance, trade finance and reliable supply partners can determine whether products arrive when they are needed,” he said.
Similarly, while speaking at the same occasion, Lagos State Governor, Babajide Sanwo-Olu, notes that despite ongoing energy reforms energy costs remain high for many households and businesses.
He said Nigeria’s downstream sector today looks very different from what it was three years ago following the removal of fuel subsidy which opened the market to private investment.

The Governor notes that the Dangote Refinery, here in Ibeju-Lekki, produced about 42 million liters of petrol a day in August, according to the regulator’s data, and petrol imports fell by 26 per cent that month, to about 14.6 million liters a day.
He said that for a country that depended on imports for most of its petrol only a few years ago, that is a real change
However, he remarked, “But a refinery’s output is not the final measure of success. The measure is whether product is available where and when Nigerians need it, and what they pay for it. Energy costs remain high for many households and businesses. We must keep working towards a market that is reliable, competitive and affordable.”