Nigeria: Govt Mulls Incentives for Modular Refinery Investors
The federal government said it will in a matter of weeks conclude discussions on number of incentives lined up for investors who establish modular refineries in Nigeria.
The government had been considering granting duty waivers and tax holidays to investors although implementation road map had been unclear.
Speaking at the ongoing Nigeria International Petroleum Summit (NIPS) in Abuja, Mr. Rabiu Suleiman, who is the Senior Technical Adviser to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said that discussions on incentives right from custom duty waivers and tax reliefs have reached a comfortable stage and would happen soon.
"Only last week we engaged with the minister of finance and with customs to see how we can achieve that. Hopefully, by next week we should be able to conclude on that," Suleiman said.
He said that in addition to tax and custom duties waivers the government would also guarantee the investors regular crude oil supply.
He explained that the federal government was in talks with a number potential financiers like the Central Bank of Nigeria (CBN), International Finance Corporation (IFC) and Nigerian Sovereign Investment Authority (NSIA) amongst others to provide contributory funding to investors in modular refineries in the Niger Delta region.
Apart from NSIA, CBN, and IFC, Suleiman, noted that the Niger Delta Development Commission (NDDC) and some state governments have equally indicated their willingness to invest in the refineries and gain equity share in them.
The federal government in November 2017 disclosed that it was considering granting 13 operational licenses for modular refineries in the Delta.
Also speaking in a presentation titled "An Assessment of the Economic Viability and Competitiveness of Modular Refinery in Nigeria," a Lecturer at Federal University of Petroleum Resources, Effurun Prof. Ogbarode N. Ogbon said that Nigeria will need 75 modular refineries with capacity of about 10,000 barrels per day by 2020 if the problem of fuel shortage will end.
"Irrespective of the revamping of the four refineries and the Dangote refinery coming on board, come 2020 you will need 75 modular refineries operating in this country of about 10,000 barrels per stream day or we will go back to the situation of the fuel shortage," he said.