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PIA 2021 and Edo modular refineries

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Edo modular refinery

Sir: With the signing of the Petroleum Industry Act (PIA) 2021 by President Muhammadu Buhari I want to call on the government to ensure enabling policies that will promote modular refineries across the country. Modular refineries, they say, is key to ramping up local production of premium motor spirit (petrol) in the country, amid rising fuel imports and a corruption-ridden subsidy regime. I see in the PI Act, an investment-friendly fiscal framework for modular refineries with well-designed regulatory and governance institutions.

The two modular refineries in Edo State are located in Egbokor Village, Iyoba Ward, Orhionmwon Local Government and Ologbo in Ikpoba Okha Local Government, Edo State. The two refineries are under construction. Edo State in the year 2021 can boast of two modular refineries in Nigeria. With PI Act 2021, Governor Godwin Obaseki and the two modular refineries will drive industrial revolution in Edo State.

The petroleum industry in Edo State received a new boost recently as the Federal Government reduced the cost of obtaining a refinery licence from $1million to $150,000 among other things. Modular refineries can also mitigate or eliminate environmental degradation associated with illegal refinery activities, crude oil theft and pipelines vandalism, experts say.

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The 5500bpd Edo Modular Refinery under construction in Ologbo in Ikpoba Okha Local Government Area will be a big boost to the economy of the state and that of the country. Apart from reducing the pressure for demand on foreign exchange to buy finished products from overseas, it will create employment opportunities for the citizens of the state. The modular refinery, which is the outcome of a Memorandum of Understanding between the Obaseki-led administration and a Chinese consortium, is 99 per cent completed, according to the latest development.

The integration of modular refining in the development plan of a field qualified as marginal within the Nigerian petroleum industry context. Furthermore, the economic value sought by the integration will be weighed against the backdrop of current fiscal provisions and then compared with provisions for refineries that have historically been offered in successive versions of the PIB (Petroleum Industry Bill) – that of making the incentives for gas utilisation projects found in Section 39 of the CITA (Corporate Income Tax Act) available for refinery projects.

The law makes provision for speedy granting of licences to investors especially in the downstream sector. This is likely to translate to the establishment of more refineries in Nigeria, which will go a long way to meet local consumption with prospects of ending fuel importation and the loss of forex associated with it. This could strengthen the value of the naira in the long run as well as create job opportunities in the petroleum value chain.

• Inwalomhe Donald wrote from Ologbo, Edo State.

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