Abia Modular Refinery is one such energy initiative by the Alex Otti Administration. Will the project end as a white elephant project or benefit you? Many people have criticized the initiative as another big project with little to no impact on the people, but would one blame those who have such a mindset? Given what refineries have become in Nigeria in the past, it is understandable why Nigerians are very skeptical about investing in one. Most Federal government of Nigeria-run refineries in the past had been a means of siphoning wealth, and at most, for years, these refineries had been moribund.
Of the four refineries built by the Federal government, none ever worked to a profitable capacity and were in constant maintenance most of the time, with nearly nothing to show for all the money spent on them. Although this is not a tangible reason to assume that the Abia Modular Refinery will not work with such development, one can see why several individuals are not very confident about the viability of the Abia Modular Refinery.
Several critics have insisted that the fund should be invested elsewhere instead of building the Abia Modular refinery. While understanding the inspiration for the rather amusing thinking that refineries are not lucrative businesses, one needs to understand the internal sabotage that led to the failure of Nigerian refineries.
The earlier petrol subsidy initiative in Nigeria created a lot of powerful individuals who never really wanted our refineries to work. Subsidy created an easy channel for corrupt individuals to manipulate the system and make a fortune. This they achieved in connivance with foreign refineries, thereby deliberately leaving our refineries to rot away.
The foreign refineries also want to sell more PMS to Nigerians in a style that the people don’t understand its value as the FG subsidized the essential product, but have you ever asked yourself, if refineries are not lucrative, why are the foreign refineries still working?
Abia modular refinery will turn profitable when completed. The demand for PMS in Nigeria is very high, with subsidies gone. Refineries will turn lucrative. There are high chances of the moribund Nigerian government-owned refineries even coming alive. Nigeria’a population explosion has created a huge market. The movement of people and goods is currently reliant on gasoline and diesel; both are products of crude oil.
Unlike other countries, going green and adopting electric cars like Tesla, Nigeria, for now, solely relies on PMS-powered vehicles as the hope of stable electricity in the country remains shaky. Most small and large-scale enterprises rely on standby power generators to power their enterprise. More than any country on earth, Nigeria needs to invest heavily in petrol refining, and Abia modular refinery is a step in the right direction.
Now that the viability of Abia Modular Refinery has been established, how does it stand to benefit the people?
The urgent need to make PMS available to the critical sector: The city of Aba in Abia state is one of the most industrialized cities in Nigeria. This industrialization needs massive movement of goods and services. Perhaps the industry could need more diesel and PMS in the future as the hope of stable electricity constantly dwindles nationwide.
Even though Aba is set to get a dedicated power supply along the line, it is likely not going to impact the demand for petrol for other uses. Critical infrastructure in the state needs refined products. This can reduce the cost of governance and improve the ease of doing business when petrol becomes more affordable.
The movement of goods and services will be more effective. When critical state infrastructure has access to locally refined petrol and petrol products, the cost of running the government will be reduced. Such a move can impact individual lives in a system of accountability and honesty.
Politics and honesty don’t always go together, but we don’t have to be overtly negative and stereotypical. People-oriented governance is possible, and when such happens, the Abia state modular refinery could be a crucial instrument of the state to stabilize and energize numerous sectors.
Possible Cheaper Product: Being that there’s crude oil in commercial quantities in Abia state, the Abia modular refinery, everything being equal, is supposed to market relatively more affordable petrol and other refined products. This is because the cost of transporting the crude from the drilling area to the refining area will be reduced. This is unlike the Dangote refinery, where crude oil produced in the Niger Delta zone has to be shipped to Lagos.
In the case of the Abia modular refinery, transportation costs will be less due to the proximity of the drilling area to the refining area. When well managed, this logistic slash could result in more affordable products. Affordable products will benefit people in several ways.
Huge Market: Petrol is a nationwide demand. Apart from the demand in Nigeria, even several neighboring countries rely on Nigeria for the PMS and other crude oil products. This creates a big market for refined products. The huge market will transform the economy of Abia state. Home and neighboring state demand will position Abia as an influential regional state. This is not minding the potential international demand for the Abia modular refinery products.
The eastern region is the most densely populated in Nigeria. On top of this, the Eastern corridor is the closest to the high population North with an expansive landmass. Expansive landmass comes with high PMS demand as more PMS is needed to transport through the large expanse effectively. The Northern corridor is another huge market in waiting for the Abia modular refinery.
Job creation: The Abia Modular refinery can create over 2000 direct and indirect jobs. This will be a very brilliant opportunity for citizens seeking to work in the refinery directly or indirectly. Unemployment and poverty are some of the biggest menace in Nigeria particularly, and Africa in general.
Poverty Alleviation: The Abia modular refinery can bring extreme wealth to the state. This project would impact the state’s IGR as other by-products of petroleum find their use by different industries in the state. More opportunities mean more wealth. This will add to the healthy individual economy of the Abians and the state.
Massive Industrialisation: Energy is the primary driver of modern industrialization. The establishment of the Abia modular refinery will trigger other industrial aspects. More manufacturing can take place by making PMS and diesel available at a potentially cheaper rate. Abia state can realize sustainable industrialization with improved production and energy availability. Other bi-products of petroleum are very important to an emerging industrial sector.
This is also given that the Abia Innovation and Industrial Park aims to amplify the state’s industrial capacity. When the state becomes industrialized, it creates a better standard of living. Although industrialization can have its negative side, the negative aspect can be mitigated using the right processes. We believe that Abia state’s industrialization will have more positive impacts.
Reduction of the Strain on Naira: We are all suffering the naira strain as the value of the Nigerian naira keeps collapsing, especially after the removal of the petrol subsidy. Since most of the finished goods we use in Nigeria are imported, the naira continues to struggle against the USD.
Refining petrol locally would be a smart way to reduce imports. While this will not instantly make a very visible impact on the value of the naira against other currencies, it will certainly improve the naira when locally refined and affordable PMS and other petroleum products are available.
The availability of locally refined petrol products and their capacity to create more affordable energy could be a critical driver for other production classes. When such production continues, the reliance on imports will certainly reduce. Through this, the strain on the naira will also be reduced, and it could potentially compete with other currencies favorably.
Whether we understand it or not, the naira strain is impacting all of us as the price of goods and services keeps soaring. The Imo modular refinery, therefore will benefit everyone when it starts production of petrol and other crude oil products locally.
Investment Opportunities: The Abia Modular refinery will benefit investors. The refinery can create opportunities in different petrochemical value chains and distribution sectors. This will create wide categories of investment opportunities, from investing directly in the refinery to distributing its products. Certainly, the Abia refinery, while having the capacity to attract foreign investors, would also trigger an exponential growth of local small, medium and large-scale enterprises.
Conclusion
The Abia modular refinery is a master initiative. It is coming at a time of most need. It has a proven vitality and will benefit the people, the state and investors. It will positively impact not just the economy of Abia state but the entire South East and Nigeria. Just like other master initiatives of the Alex Otti-led administration, this also needs massive people’s support. Believe it or not, the Abia modular refinery is a people-oriented project.
You may also want to read about the Abia Innovation Industrial Park: Available Opportunities!