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Energy

Dangote tells FG to allow only refinery license holders to import petrol

Dangote Group has urged the National Assembly to include in the PIB a law allowing only companies with active refining license to import petroleum products.

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The Dangote Group has suggested the inclusion of a provision that in the Petroleum Industry Bill (PIB) that only companies that have active refining license should be allowed to import petroleum products.

The company, which is on the verge of completing a 650,000-barrels-per-day refinery in Lagos, said this would encourage investment in local refining.

According to a report by Punch, this disclosure was made by the Chief Strategy Officer of Dangote Group, Aliyu Suleiman, in a presentation during a visit by members of the National Assembly’s Joint committee on PIB to the project site as he highlighted several recommendations by the company.

READ: Nigeria set to become exporter of refined crude products –IMF

What the Dangote Group top official is saying

Suleiman said, “Nigeria is exceptional in being a major oil producer with near-zero refining capacity.

“Though the Dangote Refinery will help address this, there could be periods when petroleum products may need to be imported, such as when the refinery is undergoing turnaround maintenance or if demand grows to exceed capacity.

The company made a recommendation for a backward integration policy to be applied in the downstream petroleum sector to encourage investment in local refining.

He said, “To support this, licence to import any product shortfalls should be assigned only to companies with active refining licences. Import volume to be allocated between participants based on their respective production in the preceding quarter. Such import will be done under the DSDP scheme.’’

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READ: Dangote’s multi billion-dollar refinery is 75% complete, Otedola says

The Dangote Group said that fuel imported into Nigeria are of very low quality with a harmful effect on health and also impacts the performance and durability of vehicles, especially high-performance cars.

The company suggested that to safeguard the health of Nigerians, imported petroleum products must conform to the Afri-5 specification (50 ppm sulphur) in line with the ECOWAS declaration of February 2020 on the adoption of the Afri-Fuels Roadmap.

What this means

  • The implementation of this policy suggestion will go a long to improve the local refining capacity of refined petroleum products in the country and subsequently end its massive importation that is the current trend.
  • This will also help conserve the scarce foreign exchange that is being expended on the importation of petroleum products in the country.
  • The Dangote refinery which has faced several delays in its completion is expected to take in 2021.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Business News

FG reacts to reports of revoking 32 refinery licenses

The FG has denied revoking 32 refinery licenses that were issued to some private companies across the country.

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Edo Refinery and Petrochemicals Limited's operations to kick-start

The Federal Government has denied revoking 32 refinery licenses that were issued to some private companies across the country.

The reaction follows reports making the rounds in some section of the media that the government has revoked some refinery licenses that it had earlier issued within a period of 3 years.

This clarification is contained in a statement issued by the Head, Public Affairs of the Department of Petroleum Resources (DPR), on behalf of the agency on Tuesday, April 13, 2021, in Lagos.

The DPR said that the refinery licenses have validity periods for the investors to achieve certain milestones and would become inactive after its expiration until the company reapplies.

READ: Nigeria’s debt sentence: The burden of the Port Harcourt refinery

What DPR is saying

The DPR in its statement said, “We wish to clarify that DPR did not revoke any refinery licence. Refinery licenses, like our other regulatory instruments, have validity periods for investors to attain certain milestones.

This implies that after the validity period for the particular milestone, the licence becomes inactive until the company reapplies for revalidation to migrate to another milestone. This does not in any way translate to revocation of the licence of the company.”

READ: FG explains why it revoked 4 Addax Petroleum Oil Mining Licenses

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The DPR, in line with the aspirations of the government, initiated the refinery revolution programme of the country to boost local refining capacity by enabling business and creating new opportunities for new investors with the granting of modular and conventional refinery licenses to investors.

He emphasized that the regulatory agency would continue to support investors in the oil and gas industry in Nigeria using its regulatory instruments such as licences, permits and approvals to stimulate the economy and align with the government’s job creation initiatives.

READ: FG to extend fuel subsidy for 6 months

In case you missed it

Earlier on, some media reports suggested that the DPR had revoked refinery licenses that were issued to some companies for being inactive beyond the validity period. These refineries include modular refineries and conventional plants.

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Business News

FG to extend fuel subsidy for 6 months

Reports indicate that the FG plans to spend N720 billion for the next 6 months on Premium Motor Spirit (PMS) subsidies.

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Subsidy and PIB, petrol price, PPPRA, We have sufficient PMS stock for 38 days- DPR 

The Nigerian Government may have suspended plans to end its subsidy payments as reports indicate that the FG plans to spend N720 billion for the next 6 months on Premium Motor Spirit (PMS) subsidies.

This was disclosed in an exclusive report by The Guardian on Sunday, citing that President Muhammadu Buhari ordered that the subsidies remain in place for the next 6 months.

“Specifically, President Buhari has asked the Nigeria National Petroleum Corporation (NNPC) to suspend any idea on subsidy removal for five to six months so that a plan that does not harm ordinary Nigerians is evolved if the deregulation must go on,” a Government official said.

READ: FG to meet with State Governors over electricity, fuel prices

What you should know 

  • NNPC GMD, Mele Kyari disclosed last month that the “NNPC may no longer be in a position to carry that burden because we cannot continue to carry it in our books,” after reports of fuel imports under-recovery revealed the FG was spending N120 billion a month on subsidy.
  • Kyari also hinted that they may soon start selling PMS at market prices saying: “NNPC importing PMS at market price and selling at N162/L. The actual market price should be between N211 and N234/L. Meaning is that consumers are not paying the market price.
  • “NNPC is currently the sole importer of PMS, and we’re trying to exit the underpriced sale of PMS. Eventual exit is inevitable, when it will happen I cannot say, but engagements are ongoing because the government is cognisant of the implications.”

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