Barring any unforeseen developments in the local and international economy, the 200,000 barrels per day BUA Petroleum Refinery will commence full commercial operation in 2024, after a groundbreaking ceremony billed for May this year.
Giving graphic details on the economics of Nigeria’s second largest petroleum refining complex in Lagos recently, Executive Chairman of BUA Group, Abdul Samad Rabiu, said the project was initiated against the backdrop of the huge amount of foreign exchange the nation spends importing refined petroleum products into the country.
Rabiu who defended the sustainability of his Group’s investment in the various sectors of the economy, said the refinery project will meet the government’s economic diversification agenda in the long run, as new fuel standards continue to evolve in line with the climate crisis.
He said the project is being constructed with the best of technology from Axens of France rated as one of the best in the world in petroleum refining industry, and would enable the nation save huge amounts of foreign exchange in addition to creating thousands of jobs for the citizens.
“Nigeria consumes over 50million liters of fuel daily, and over 90 of that is imported with about 35 percent of the country’s scarce foreign currency spent on imported products. This, coupled with low crude prices due to low demand arising from the coronavirus pandemic offers us huge opportunity to invest in projects that would help us conserve more funds, leveraging the low cost technology being deployed by Axens of France, offering us far lower cost than what it should be.” He said
Rabiu further noted that the refinery’s complete marine infrastructure and nearness to its feedstock will enable it save more on haulage, as it targets local, regional and other land-locked markets in Africa, bolstered by its unique location and opportunities emerging from the Africa Continental Free Trade Agreement (AfCFTA).
According to him, the economics of the project are a ‘no-brainer’.
Contract for the construction of the refinery was signed in Paris between BUA Group Chairman Abdulsamad Rabiu, and the CEO of Axens, Jean Sentenac, in a ceremony presided over by France’s Minister Delegate for Foreign Trade and Economic Attractiveness, Franck Riester.
While calling on the Federal Government to improve the nation’s operating environment through liberalization of cement production to enable more manufacturers take advantage of the new AfCFTA, to export more to an estimated 1.3billion people across the continent, Rabiu said the continental economic bloc remained a critical strategy to develop the nation’s manufacturing sector currently in comatose.
He further urged the Nigerian stakeholders to insist on full implementation of rule of origin principle to avoid the country being turned into a dumping ground for goods manufactured outside the continent.
He said “if we are able to manufacture, we will have a huge market of about 1.3billion people to sell to within the trading bloc involving all 55 countries. On the other hand, if we fail to manufacture, then we may be turning our country to a dumping ground for other countries because we are all signatories to an agreement to remove all tariff barriers to trade including movement of goods and persons.”
The BUA Group’s Executive Chair lamented a situation where Europe and other continents have more access to Africa than Africans themselves, stressing that the AfCFTA offers Nigeria an enormous leverage to export more to other African countries than it is doing presently.
On the rising cost of building materials in the country, he said Nigeria has become the most expensive country in Africa to build a house, noting that selling cement at N3000 per bag was unfair to the citizens of the country.
“It is more expensive to build in Nigeria than any other country in Africa.” He lamented.