(Ecofin Agency) - The Minister of State for Petroleum Resources, Emmanuel Kachikwu (photo), has announced plans by the Federal Government to reduce its level of fuel imports by 60% in 2018.

According to Kachikwu, one of the key areas in the road map for the oil industry is increased local refineries’ production capacity, through the execution of modular refineries and co-location, which is aimed at ensuring that petroleum products importation is slashed by no less than 60% by 2018, and afterwards place Nigeria in the position for net export by 2019.

‘‘Perhaps, the most important part of reforms in the midstream and downstream sub-sectors is in creating a profitable products-to-market system for Nigeria and removing hindrances and bottlenecks through incentives and regulatory frameworks,’’ he said.

He noted that the present situation of the country’s supply and distribution systems is as a result of poor storage facilities, inadequate supply, pipeline vandalism, poor products management and accountability, adding that the country needs to construct refineries and run them as profit centers that will buy crude oil at international prices and supply products at export equivalence prices.

‘‘This ensures that pricing will be conducted on a market-derived basis. We need to establish an oil and gas infrastructure protection squad, with the responsibility for dealing with crude and products theft, vandalism and general criminality, which is currently on an upsurge in the entire industry,” he told the Sun news.

Meanwhile, the Nigerian Association of Energy Economics (NAEE) has said Nigeria’s persistent prediction of 2.5 million barrels per day of crude oil production in his national budget will be insufficient to grow the economy, adding that the country needs to produce at most 4 million bpd to boost the economy.

“My premise is that if you look at the population of Nigeria and what you need energy to do, and I gave an example of the population of the United States with 300 million people, they consume 16 to 8mbpd, and translated that to us that if the Nigerian economy is actually growing the way it is supposed to grow, the 2.5mbpd will be used by our economy and there won’t be any to export,” Wumi Iledare, President of NAEE, said.

He also said that Nigeria should be targeting at least 4 Mmbpd “if we are going to have any oil export at all. If we are going to grow our GDP at 12 per cent per annum to be able to catch up with the world, we cannot use our oil for money, we should use our oil for power and 2.5mbpd cannot generate the electricity that we need to grow our economy. Oil is an input of production and that is what it should be. If this economy expands, 2.5mbpd will not sustain it.”

Anita Fatunji