- PETROAN says FG should fund the energy bank with $15 billion to cater to the funding needs of oil and gas industry players.
- The association is in talks with three foreign oil refiners from the United States, Kazakhstan and Asia to build a new refinery in Nigeria.
Oil marketers under the aegis of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have called on the federal government and other critical stakeholders to consider establishing the Energy Bank of Nigeria (EBN) to facilitate the funding of productive ventures in the downstream oil sector such as refineries.
The National President of PETROAN, Dr Billy Gillis-Harry, said this on behalf of the association. He stated that the government should fund the energy bank with a minimum of $15 billion to cater to the funding needs of players in the oil and gas industry.
He further said that his association is currently in talks with three foreign oil refiners from the United States, Kazakhstan and Asia to partner in building a new refinery in Nigeria. The association expects the federal government to support the project with some form of sovereign guarantee.
According to him, setting up the energy bank in Nigeria would enable marketers like PETROAN members to embark on more beneficial projects for the country’s economy by enhancing production in key sectors like the petroleum downstream and midstream sectors.
Gillis-Harry said PETROAN had communicated the need for the energy bank in Nigeria to President Bola Tinubu, which has become critical for the country, just like the Bank of Industry and Bank of Agriculture.
He said, “It’s not like marketers are not interested in making efforts in building refineries. We are willing, but we need some support. That is why we advocate that the government should set up the Energy Bank of Nigeria and fund it at least to the tune of $15 billion to fund such ventures.
“We are talking to the National Assembly, we are talking to the State Assemblies, we are talking to stakeholders in the business, and PETROAN is the one championing it. So, we hope our members can make their minimal contribution on an equity basis in Nigerian naira.”
He said having that energy bank working in Nigeria would help build confidence among foreign investors and multilateral financial institutions like the African Development Bank (AfDB), who want to invest in the country.
With the bank established and functioning in the country, the PETROAN boss said it would become more accessible to implement productive projects in the downstream oil sector. This is because the EBN would act as a local institution that would warehouse and safeguard any investment coming into the country.
Furthermore, he stated that a lack of access to funding and the low capital outlay of marketers has made it difficult for the association to build a refinery. According to him, building a refinery of about 50,000 barrels per day as of today requires building a minimum capital outlay of over $3 billion.
Gillis-Harry added, “How many marketers in Nigeria have $3 billion as their capital base? 50,000 barrels per day refinery will be able to bring at least about 700,000 litres of Premium Motor Spirit (PMS), some diesel, some kerosene, and some aviation fuel.
“The cost of building a 50,000 barrels per day refinery will even be much more than $3 billion, and so you need that kind of money. Where are you going to get it?”.