The founder and Group Managing Director Rainoil Limited Mr. Gabriel Ogbechie in this interview with OKANLAWON AYO speaks on Petroleum Industry Bill(PIB), challenges facing the downstream sector and the need for more refineries to reduce fuel importation required to meet national needs. Excerpts.
What are the challenges you face that keep you going in this recession?
After 20 years in this industry, I have seen the industry go through a lot of transformation and challenges. Twenty years down the line is important in view of what is going that we look at the opportunities, challenges and prospects in the industry. This is because especially in the last one year a lot has happened with the devaluation of currency by the. Central Bank of Nigeria (CBN) from N197 to N285. Marketers in the downstream sector and oil players took a bit of more than a billion dollars which was too much lost to take. Government’s policy of increasing the price of Fuel to 145 by removing subsidy without deregulating the sector also created a lot of challenges for the downstream sector. Regardless of all these, we are still optimistic that there are pportunities in the sector for a country of a 180million people. These are people largely moving around by cars rather than mass transit which gives us demand for petroleum products.
This is the time for us to come together and look at the downstream sector as a whole and try to fashion a way forward
With the delay in passing the Petroleum Industry Bill (PIB), don’t you think it is a major challenge for the downstream sector?
The industry definitely needs the PIB but for those of us who play in this sector, we know that the PIB has been at the National Assembly for years. However, because of politics on what I call vested interest, PIB passage remains an unfinished job from one administration to another. I remember way back in 2015, I told people that the National Assembly will not pass the PIB. Two years into this administration, the PIB is still not passed, I will not be surprised if at the end of this administration, the PIB will still remain in the National Assembly. I think they need to break down the PIB and pass it in pieces because the PIB is very encompassing legislation and it has affected the entire industry with most people protecting their various interests.
The PIB has been broken down but still the delay still persists, what do you think can be done?
I think the most important thing is for the National Assembly to have political will to back the PIB for now, I don’t think the political will is there to see it through.
What do you think can be done to support investment in the downstream sector?
It has to be polity-driven, one thing for sure is that we all believe that the government’s roles should be limited to regulate the downstream sector and allow the downstream sector to run seamlessly. However, placing a cap on the price of petrol while sustaining the subsidy regime is difficult to play under that scenario. One thing government needs to do is to address a lot of these challenges through policy issued.
Despite all these challenges Rainoil Limited is still on its stand, what is the secret sir?
The secret of our success in Rainol is non-stop investment. We started this business from the basic of what a mathematician call first principle. We started by supplying a truck of diesel and over the last 20years, we have gone from one petrol station to have 61 petrol stations. The company has improved its capacity by increasing the building of one tank farm to have two tank farms today. We have gone from buying one ship, as at today we have six ships and have more than 90 trucks today. When you don’t stop investment, somehow you are able to build that internal capacity within the system to be able to absorb shock. You know as investor shock will surely come. Rainoil today is a company with a national spread, we have petrol stations across the country, and we have tank farms across the geo-political zones.
What can you say is the problem with Nigeria’s refineries?
For the simple reason that our refineries are working at a very low level but regardless of that, all our refineries even when they work at 100% capacity can barely meet 50% of our national needs. The newest of all our refineries at Port-Harcourt was built in 1989 that is 28years ago. Look at the population growth within the last 28years, look at the demand in the volume of petrol. People who were not born 28years today are already driving cars, the demand has gone up but we have not increased our refining capacity and that is why we still find ourselves importing much fuel in this country.
Are you in support of the Federal Hovernment’s plan to set up modular refineries?
Yes, we need to set up more refineries whether modular or not, anything that enables us to refine some part of our crude oil is accepted.