OPEC increases Nigeria’s oil production quota as Brent hits $111/barrel
The Nigerian National Petroleum Company Limited on Wednesday disclosed that one of the key reasons modular refineries in Nigeria were not producing Premium Motor Spirit, popularly called petrol, was because of the regulated pump price of PMS by government.
A modular refinery is a simplified refinery requiring significantly less capital investment than traditional full-scale refineries. They are crude oil processing facilities with capacities of up to 30,000 barrels per day.
Nigeria has a number of modular refineries in Edo, Delta, Imo and other states, while plans are on to increase the number through private sector investments.
OPEC raises Nigeria’s oil production quota as Brent hits $111/barrel
This came as data released on Wednesday by the Organisation of Petroleum Exporting Countries indicated that OPEC had raised Nigeria’s oil production quota from the 1.718 million barrels per day target in March to 1.735 million bpd in April 2022.
Also, it was observed that the cost of Brent, the crude against which Nigeria’s oil is priced, appreciated on Wednesday, rising to $111.03/barrel as at 6.54pm Nigerian time, amidst the increase in OPEC oil production quota for Nigeria.
The organisation raised the country’s crude oil production quota following the conclusion of the 26th OPEC and non-OPEC Ministerial Meeting, held via videoconference on March 2, 2022.
Nigeria had been missing its oil production quota lately. Early last month, OPEC increased Nigeria’s crude oil production target for the month of March despite the fact that the country had been missing its approved monthly output targets.
OPEC raised Nigeria’s oil production target for March 2022 to 1.718 million barrels per day, indicating a marginal increase from the 1.701 million barrels per day target that was approved for Nigeria in February.
Nigeria Standard had exclusively reported that Nigeria missed its crude oil output target for January 2022, pumping 1.46 million barrels per day against a target of 1.683 million bpd as approved by OPEC.
Speaking on the reasons why modular refineries were not producing petrol, during a plenary session at the ongoing Nigeria International Energy Summit 2022 in Abuja, the Group Executive Director, Refining, NNPC, Mustapha Yakubu, said it was due to fuel pump price regulation.
He said, “Some modular refineries should take up to 50,000 barrels per day, but because of financing you can start with 10,000 barrels and then scale up gradually to 50,000 barrels.
“What do you need to do to produce PMS? It is to put additional investment that will put in the cracker required to produce the PMS. But in this period why they (modular refineries) cannot produce PMS is because we are under full regulation.
“So to me, if they produce PMS today, at what cost are they going to produce it and at what cost are they going to sell under this regulated environment?”
Participants at the session therefore urged the government to implement the Petroleum Industry Act in full and ensure the complete deregulation of the downstream oil sector
