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Port Harcourt refinery begins operation July



The 210,000-barrel-per-day Port-Harcourt refinery may finally commence operations by the end of July after several postponements.

The new date was disclosed on Monday by the National Public Relations Officer, Independent Marketers Association of Nigeria, Chief Ukadike Chinedu.

He stated that the development would stimulate economic activities, reduce the price of petroleum products and ensure adequate supply.

Last year in December, the Minister of State for Petroleum Resources, Heineken Lokpobiri, announced the mechanical completion and flare start-off of the biggest crude refinery in Port Harcourt.

The refineries comprise two units, with the old plant having a refined capacity of 60,000 barrels per day and the new plant has 150,000 BPD.

The refinery shut down in March 2019 for the first phase of repair works after the government secured the service of a technical adviser of Itay’s Maire Tecnimont to handle the reviews of the refinery complex, with oil major Eni appointed technical adviser.

On March 15, 2024, it was reported that the Group Chief Executive Officer of NNPC Limited, Mele Kyari, stated that the Port Harcourt refinery would commence operations in about two weeks.

The NNPC boss disclosed this during a press briefing after he appeared before the Senate Ad hoc committee investigating the various turnaround maintenance projects of the country’s refineries.

He said, “We did a mechanical completion of the refinery that was what we said in December. We now have crude oil already stocked in the refinery. We are doing regulatory compliance tests that must happen in every refinery before you start it, and I assure you that this Port Harcourt refinery will start in two weeks.”

However, the machinery had yet to begin operations two months after he made the promise.

In an exclusive interview on Monday, the IPMAN official stated that the work done represented a complete turnaround, not just rehabilitation, emphasising that every effort would be made to meet the July deadline.

Ukadike said, “Yes when we visited the place, the MD told us that the refinery was almost ready and by the end of July, they would start producing. It has been turned into a new one they changed all the armoured cable to brand new and everything there is almost like a brand-new refinery.

“The turnaround on maintenance is very massive and the job is being done day and night. All hands are on deck to make sure that they meet that target. By ending of July the refinery should be ready.”

When reminded of several promises by the government to kick start the project, Ukadike replied, “Yes, there have been delays but they didn’t tell us any reason for the delay of the last deadline given in April.

“They are not facing any challenges at all; I can say the refinery is 99 per cent ready.

“What we want is competition. I am very sure that with the two refineries, the price of petrol will be reduced. Dangote is coming soon and the Port Harcourt refinery is almost ready too and that is very good. We need that competition for the benefit of the nation.”

The new timeline coincides with a proposal by the Dangote Refinery to commence petrol production by ending of next month (June).

The Chairman of the Dangote Group, Aliko Dangote, while speaking at the Africa CEO forum annual summit in Kigali, assured Nigerians that following the laid-down plans of the Dangote Refinery, Nigeria would no longer need to import petrol starting next month.

According to him, the refinery can meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.

With an average monthly consumption of 1 billion litres, Nigeria currently spends approximately N520bn on the importation of PMS every month.

This means the government may cut approximately N6.2tn yearly import bill.

Commenting, the NNPCL Chief Corporate Communications Officer, Femi Soneye, said regulatory approvals from international bodies were the only impediment stalling the operational commencement of the refinery.

Soneye in an exclusive interview with our correspondent on Monday reiterated that mechanical completion had been achieved, and all pipes were operating flawlessly, transporting crude oil supplied by Shell.

He said, “We have said that the mechanical completion has been done and every other thing is done. There is crude oil and all the pipes are working; we are only waiting for regulatory approvals. Like I said, some of our materials and the things we use have to do with nuclear and we need the nuclear authorities to give us approval to use all those things at the site.

“And some of these approvals come from bodies outside of Nigeria. Until they give us those approvals, we can’t begin operations. We are ready to go but if something happens without it, which would be another issue. Everything has been completed in terms of our work, and once we get those approvals, it will start operations.”

Source: The punch

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Oil & Gas

Dangote reveals how oil mafia tried to stop establishment of Dangote Refinery



The founder of Dangote Group, Aliko Dangote, has revealed that both local and international criminal organisations, which he described as “mafia”, made repeated attempts to sabotage his $19bn refinery project located in Lagos.

Speaking at the Afreximbank Annual Meetings, Dangote likened the oil cartels to a mafia stronger than the drug mafia hell-bent on maintaining their grip on the industry.

“Well, I knew that there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs. I can tell you that. Yes, it’s a fact,” he said.

Dangote, who described himself as a fighter, said they “tried all sorts” to stop him.

“But I’m a person that has been fighting all my life. You know, so I think it’s part of my life to fight,” he said.

He added, “As a matter of fact during the COVID period, some of the international banks really were looking forward to making sure that they push us into default of our loans so that the project will just be dead. And that didn’t happen with the help of banks like Afreximbank.”

Dangote also revealed that he has paid off $2.4bn of the $5.5bn borrowed for the Lagos-based refinery.

Dangote also unveiled plans to diversify into the steel sector, aiming to utilise solely Nigerian-produced steel and achieve self-sufficiency.

Dangote Refinery recently rescheduled the launch of its petrol sales to July 10-15, pushing back its initial June target due to “minor” logistical issues.


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Venture Global hits out at Shell as searchlight also beams on NLNG dispute



Venture Global LNG, the US-based energy producer, has hit out at Shell’s criticism of the track record of its liquefied gas facilities as the dispute over LNG supply has failed to abate.

Shell LNG is a major shareholder of Nigeria LNG, which is also involved in a supply dispute.

Riviera Maritime Media reports that the Venture Global facility conflict involves Shell, BP, REPSOL, Galp, and other European buyers of LNG.

The dispute, which has global ramification, emanated from the definition of commissioning cargoes from a new LNG facility — with implications for financing and future sales of LNG developments.

European LNG buyers allege that Venture Global denied the off-takers cargoes from its Calcasieu Pass facilities, leading to the loss of billions of dollars.

The European off-takers have a 20-year sale and purchase agreement with the terminal, representing eight million tons per annum (mtpa) of the terminal’s total planned 10 mtpa offtake.

In 2019, the agreed pricing was around $2 per million British thermal units (mmBTU) but by August 2023, spot prices had spiked to $89 per mmBTU.

This led to an impressive profit margin exceeding $100 million per LNG cargo.

Venture Global LNG saw this as an opportunity to sell cargoes at prices far higher than the long-term agreements.

According to the report, Venture Global LNG claimed that if the cargoes were provided to Shell, Galp, Edison, and others, they would have been sold on the spot market with no benefit to Calcasieu Pass.

The report said the dispute became intense when Shell, BP, and others wrote to the EU-US Task Force on Energy Security, requesting intervention and accusing Venture Global of “opportunistic” actions.

Venture Global responded with a letter to the task force, maintaining that Shell and others had previously bought and allegedly traded commission LNG cargoes for profit outside of Europe.

Venture Global alleged Shell had an “abysmal record of failed execution at its own LNG facilities where they are a major shareholder or a construction leader”.

It told the EU-US Task Force that the dispute was “the latest in a series of unsuccessful attempts to bully an industry newcomer into waiving contractual rights to increase their own profits beyond recent record highs”.

Venture Global positions itself as a long-term, low-cost provider of US LNG from resource-rich North American natural gas basins.

Shell LNG, meanwhile, is a global player and a major shareholder in Nigeria LNG (NLNG).

In a separate case, the NLNG has been held to be in a contract breach.

A London arbitration panel recently found Nigeria LNG in breach of contract for failing to deliver 19 cargoes of LNG under a contract it executed in January 2020.

The panel was made up of John Beechey CBE, J William Rowley KC and Nevil Phillips.

The enforceability of the arbitration award is being challenged by Nigeria LNG in the UK High Courts.

It was earlier reported that the Venture Global’s allegation against Shell and others is similar to the Nigeria LNG breach.

Shell and others have separately filed arbitration cases against Venture Global LNG at the London Court of Arbitration.


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Oil & Gas

How Aiteo encouraging bunkering in oil production – Nembe Kingdom



Nigeria’s daily crude oil production of 1.9 million barrels per day may dip over growing tension due to disagreement between Aiteo

…Host community calls FG to intervene immediately

Nigeria’s daily crude oil production of 1.9 million barrels per day may dip over growing tension due to disagreement between Aiteo Exploration and Production Ltd and its host community, Nembe kingdom on OML 29.

The Nembe Creek Trunkline contributes 150,000 barrels per day of higher grade crude to the daily oil production figures, the crude was formally launched in November last year as Nembe Crude Oil Grade distinguishing it from the Bonny Light Crude Oil Grade.

It was gathered that the growing faceoff is on despite the recent inauguration of Host Community Development Trusts for communities in the Nembe oilfields by Aiteo and the engagement of community nominated diesel contractors.

Chairman, Oil and Gas Committee in Nembe kingdom in Bayelsa State, St. George Kumo, in a statement warned that “history may repeat itself soon if the Federal Government fails to intervene in the cold war situation between host – Nembe Community and settlor, Aiteo”.

He said that Aiteo has among other things left a very bitter pill hanging in the throat of Nembe people due to the neglect and abandonment of the Nembe Independent Power Project.

The power project which was started by SPDC was at 82% completion when Aiteo inherited the assets of OML 29 in 2015, but nothing has been done on the project ever since.

Kumo lamented: “Aiteo Eastern E&P Co Ltd, operator of OML 29 field in Nembe, Bayelsa State, inherited the project from Shell Petroleum Development Company Ltd in 2015 at 82% completion stage. Most unfortunately, the project has since been abandoned and forgotten by Aiteo management”.

He stated that the company has zero tolerance for the Local Content Act as even catering services are handled by Aiteo management staff and the firm customarily promotes irrational behaviour in the community before haphazardly responding to violated signed agreements.

He said the firm, known for high level environmental abuse without cleanup, compensation and remediation for over three years, is encouraging bunkering activities in the area by paying N800 for a litre of diesel.

According to him, the Nigerian National Petroleum Company has failed to respond to previous petitions by the Nembe people about the attitude of Aiteo to the host community.

He explained that gas is still being flared just as the creeks “are now occupied by ocean liner vessels depriving the locals of their fishing rights without Environmental Impact Assessment” stressing Aiteo should not push the Nembe man into irrational acts.

He called on environmental rights groups such as Green Peace, Friends of the Earth and others to come to the aid of the community.

The Nembe area suffered a devastating blowout made up of 80% gas and 20% crude oil at the Santa Barbara South Well 01 on November 1, 2021, which took several weeks to be contained.

It was estimated that the blowout spilled about two million barrels of crude into the creeks and in spite of the scale of devastation, it took several months before any relief came to the communities.

When contacted, Aiteo spokesperson, Ndiana-Abasi Matthew, referred our correspondent to another official, Chioma Aleru in Port Harcourt, who described the allegations as lies.

Aleru said Aiteo is already handling the power situation by providing big and small diesel generators to the communities as the company did not want a situation where only a few communities would enjoy power supply.

She said the company is providing about 7,500 megawatts of electricity to the host communities and that diesel was supplied by contractors who were nominated quarterly by the communities.

On the issue of non cleanup of oil spills for over three years, she said regulatory agencies like the National Oil Spill Detection and Response Agency and the Nigerian Upstream Petroleum Regulatory Commission work with the firm and communities.

According to her, part of the company’s challenge was the inability to produce oil for a period of 15 months due to disruptions on the 95-kilometre Nembe Creek Trunkline.

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Naira slide pushes Dangote diesel to N1,100/litre



Dangote plans one million-litre diesel sale to each marketer

The price of Automotive Gas Oil, popularly called diesel, produced by the Dangote Petroleum Refinery has increased from N940/litre to N1,100/litre due to the crash of the naira against the United States dollar, it was gathered on Tuesday.

Recall that on April 24, 2024, The PUNCH reported that the Dangote refinery announced a further reduction in the prices of diesel and aviation fuel to N940/litre and N980/litre respectively.

Earlier, precisely on April 17, The PUNCH reported that the Dangote refinery listened to the calls of oil marketers regarding a reduction in the price of diesel, as the refinery reduced the cost of the commodity from N1,200/litre to N1,000/litre.

In about a week, the multi-billion dollar facility again announced another reduction in the price of AGO but noted at the time that the change was only applicable to dealers purchasing up to five million litres of diesel and above.

However, it was gathered on Tuesday that the cost of diesel from the plant had increased from the N940/litre price that was announced by the plant in April to a new rate of N1,100/litre. Some other dealers who purchased lesser volumes said they got the product at N1,200/litre.

Oil marketers told our correspondent that the hike in diesel price by the $22bn worth refinery located in Epe, Lagos, was due to the recent southward movement of the naira against the dollar.

“The refinery had earlier reduced the price of its diesel to around N940/litre, but it later increased it up to N1,100/litre. This happened recently, maybe about two weeks ago,” the National President, of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, stated

Providing a reason for this, Maigandi told our correspondent that it “is because of the rising exchange rate, according to what the refinery told us.”

Although officials of the refinery stayed mute when contacted on the matter, industry sources and some major marketers confirmed the development.

“The recent crash of the naira against the dollar is pushing up the cost of commodities and, understandably, the price of diesel from Dangote refinery is being affected,” the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, stated.

He explained that the Dangote refinery imports crude oil, stressing that crude is priced in dollars.

“So the recent rise in the foreign exchange rate is going to have an impact on the prices of refined products from the plant,” Ukadike stated.

In March and April this year, the naira appreciated against the United States dollar, a development that had marginal positive impacts on the cost of commodities.

The PUNCH, for instance, reported on April 16, 2024, that the naira continued its resurgence against the dollar, appreciating N1,136/$ at the official market and N1,050/$ at the parallel market at the close of trading activities the preceding day.

The report stated that traders predicted the dollar’s fall to below N1,000 before the end of that week.

The improved rate at the time followed a string of foreign exchange directives by the Central Bank of Nigeria aimed at stabilising the naira.

The apex bank in March said it had successfully resolved all valid foreign exchange backlogs, as pledged by the CBN Governor, Olayemi Cardoso, addressing inherited claims amounting to $7bn.

But the improvement in the naira could not be sustained, as the local currency came crashing against the dollar in subsequent weeks.

The naira has traded above N1,400/$ for most of May. The PUNCH, for instance, reported on May 8, 2024, that operators revealed that they bought the dollar at N1,400 and sold at N1,425 per dollar leaving a profit margin of N25.

This, according to the report, also indicated an N5 drop from the N1,430 it sold the preceding day.

The recent crash of the naira against the dollar warranted a rise in the cost of diesel dispensed by the multi-billion dollar Dangote refinery, according to marketers.

The refinery imports a large portion of its crude and the commodity is priced in dollars.

It was reported last week that the Dangote refinery was seeking to purchase millions of barrels of US crude oil over the next year as it ramps up processing rates.

Bloomberg reported that the plant had issued a term tender for the purchase of two million barrels a month of West Texas Intermediate Midland crude for 12 months starting in July.

“The plant, built by Africa’s richest man, Aliko Dangote, issued a so-called term tender for the purchase of two million barrels a month of West Texas Intermediate Midland crude for 12 months starting in July, according to a document seen by Bloomberg. The tender closes on May 21,” the report stated.

Petrol price projections

Meanwhile, oil dealers, on Tuesday, welcomed the announcement that was recently made by the President of Dangote Group, Alhaji Aliko Dangote, when he announced that the Dangote refinery would start pumping out Premium Motor Spirit, popularly called petrol, to the domestic market.

It was reported on May 18, 2024, that Dangote explained that following the laid-down plans of the Dangote refinery, Nigeria would no longer need to import petrol starting from next month.

Dangote also stated that his refinery can meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.

He spoke at the Africa CEO Forum Annual Summit in Kigali, expressing optimism about transforming Africa’s energy landscape.

“Right now, Nigeria has no cause to import anything apart from gasoline (petrol) and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre,” Africa’s richest man had declared.

Reacting to this on Tuesday, oil marketers welcomed the comment, but expressed hopes that the cost of PMS from the refinery should be less than the price which the Nigerian National Petroleum Company Limited is currently selling.

“It is a welcome development if the refinery can start releasing PMS by June because as marketers we are currently set to start buying the product from the plant,” Maigandi stated.

On whether dealers had commenced discussions with the refinery on PMS pricing, the IPMAN president said marketers had been discussing with the manager of the plant, but not specifically on petrol pricing.

“We have been discussing, but not about the price of petrol yet, rather on other matters such as the registration of members for the purchase of petrol and diesel from the refinery.

“We have indeed started buying diesel from them, but you have to register with the company first. So a general registration is ongoing,” he explained.

Maigandi, however, stated that though marketers had yet to receive the projected price for petrol from the plant, dealers would want to see a PMS price of about N500/litre from the Dangote refinery.

“We are looking at having it (PMS) at any price below the NNPC rate. The price which NNPC sells petrol is N565.50/litre, so we are expecting something below that price, maybe around N500/litre or a maximum of N600/litre,” Maigandi stated.

He was supported by Ukadike, who stated that the cost of PMS from the multi-billion dollar refinery should be less than what is currently obtainable in Nigeria.

Source:The Punch

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Oil & Gas

FG, UAE plan new oil exploration deal



The Federal Government, on Monday, urged the United Arab Emirates to invest in the renewal and reconstruction of the more than 50-year-old oil pipelines in Nigeria, stressing that the facilities had outlived their lifespans.

It also stated that Nigeria and the UAE were on the same page concerning oil exploration as crude oil drilling would not be abandoned despite calls for its abandonment in some quarters.

The Minister of State for Petroleum (Oil), Heineken Lokpobiri, disclosed this in Abuja while playing host to a delegation from the UAE led by the United Arab Emirates Ambassador to Nigeria, Salem Al Shamsi.

Lokpobiri said, “This country has enormous investment opportunities, our pipelines need renewal. They have been there for over 50 years since Nigeria found oil in commercial quantities in 1956/1958.

“And from then till now it is almost 70 years and most of those pipelines were built around that time and have already outlived their lifespans. And even if you can produce, you need to evacuate to the terminals where you would export.

“So it is an opportunity that we are looking up to potential investors from the UAE to come and invest here and recover their money through those investments.”

The minister told his guests that the investment models would be very attractive.

“Part of what we are proposing is that if you come and invest you will get your money, for as you transport the crude you’ll take it. Proportionately you’ll recover your investments, for any barrel of crude you transport through your pipes, you have to recover your investment by placing mutually agreeable charges,” he stated.

Lokpobiri further stated that Nigeria has over 208 trillion cubic feet of gas, adding that “we in Nigeria know that these records are over 20 years. We can double or triple our gas reserves in Nigeria. So Nigeria is more of a gas country than even crude.”

He said, “And even our crude reserves, I’m very confident that the 37 billion barrels we are talking about are also records of about 20 years. So even in terms of crude deposits in volumes, we believe that we should be doing much more than that.

“That is why when this government came on board, part of what was said was that we have to resume our drilling campaigns to ensure that we make more discoveries and sustain the momentum, and we are achieving that by liberalising the processes.”

He said the government was trying to eliminate the bureaucracy which had been one of the reasons why some of these investments were delayed.

“Of course, you know that following the introduction of the Petroleum Industry Act, the NNPC is now run as a national oil company that is to make profit for shareholders and Nigerians.

“So we want to assure the UAE that Nigeria is open for investments and we are committed to deepening our very strategic relationship with the UAE. I am happy that the visa issue has been addressed,” the minister stated.

Lokpobiri told the ambassador that Nigeria and the UAE would continue to leverage their membership of OPEC to work as partners, adding that the Nigerian market is huge for investments, whether in LPG, CNG or the entire value chain in the oil and gas sector.

He said Nigeria lacks the amount of dollars required for suitable investments in the oil sector, but noted that the UAE has billions of dollars that could be invested in Nigeria and recovered by the investors.

On March 29, 2024, The PUNCH reported that the Group Chief Executive Officer of the Nigerian National Petroleum Company, Mele Kyari, stated that the over 5,000km petroleum products pipeline network of the oil firm would be replaced in three years.

Kyari disclosed this at the 2024 edition of the Society of Petroleum Engineers Oloibiri Lecture Series and Energy Forum in Abuja, with the theme, ‘Stability in the Energy Sector: Integrated Strategies for Infrastructure, Transportation and Security.’

He said, “The cheapest way of transporting petroleum products is by pipelines and that is why our NNPC network of pipelines is connecting almost all geopolitical zones, we have 27 stations and over 5,000km of pipelines across the country.

“However, many of them as we know, are at the point that we just have to replace them, and that is what we are doing today. We have commenced a BOT (Build, Operate and Transfer) process where nearly all the pipelines will be replaced over a period of three years.

“As we do this, we are also reinforcing the ability of the current network to deliver products to our locations.”

Oil exploration continues. Also at the meeting on Monday, Lokpobiri stated that Nigeria and the UAE were on the same page concerning oil exploration.

“What we are emphasising is that oil and gas could be explored in a greener, cleaner, and more sustainable way. But abandoning it is not a solution, for historically no source of energy has been completely abandoned. And so we are on the same page with you when it comes to that.

“Recall that the new COP chairman is from the UAE and the UAE has an important role as far as climate issues are concerned. Nigeria as a country is committed to the Paris Agreement, but we are also saying that no country is slowing down on fossil fuel production, particularly for Africa.

“We need to create more investment opportunities so that we can get the requisite funds to be able to finance our transition. So for us in Africa, Nigeria in particular, what we are looking at is to build a strategic partnership with the UAE and the rest of the world, so that we could be able to raise the money needed to finance our transition as canvassed globally,” the minister stated.

On his part, Al Shamsi said the relationship between Nigeria and the UAE had lasted for more than 50 years, as he assured the petroleum minister that the UAE would work with Nigeria in addressing some of the concerns raised by Lokpobiri.

“I hear the questions from your side will be something important to us. And I assure you that we are very serious about improving the situation. Thank you for having us here,” the UAE ambassador stated.

He told his host that both countries would continue to work together to meet the needs of Nigeria and the United Arab Emirates.


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Oil & Gas

Dangote petrol supply: FG may slash N6tn fuel import



Dangote Petroleum Refinery has announced a further reduction of the price of diesel from 1200 to 1,000 naira per litre.

The Federal Government may cut its approximately N6.2tn yearly fuel import bill if the Dangote Petroleum Refinery begins the sale of premium motor spirit as promised by the Chairman of the Dangote Group, Aliko Dangote.

Dangote, while speaking at the Africa CEO Forum Annual Summit in Kigali, Rwanda on Friday, assured Nigerians that following the laid-down plans of the Dangote refinery, Nigeria would no longer need to import petrol starting next month.

The country’s petrol import was reduced to an average of one billion litres monthly after President Bola Tinubu removed fuel subsidy on May 29 last year, according to a report by the National Bureau of Statistics.

According to Dangote, the $20bn refinery can meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.

He said, “Right now, Nigeria has no cause to import anything apart from gasoline and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre.

“We have enough gasoline to give to at least the entire West Africa, diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico.

“We have started producing jet fuel, we are producing diesel, and by next month, we’ll be producing gasoline. What that will do is it will be able to take most African crudes.”
The assurance by Dangote, if realised, would reduce the country’s approximately N6.2tn annual spending on PMS import.

With an average pump price of N670/litre, marketers put the average landing cost of petrol currently at N520/litre, considering the price of the Nigerian National Petroleum Company Limited, which is the only importer of the product.

Operators also put the average difference between the landing cost and pump price of PMS at N150/litre.
With an average monthly consumption of 1 billion litres, Nigeria currently spends approximately N520bn on the importation of PMS every month. This is N6.2tn annually.

Going by the planned June supply of PMS by Dangote, the country is expected to save a substantial amount from the elimination of shipping and other charges attached to importation, according to operators and industry experts.

The difference between the landing cost and the pump price of petrol is N150 per litre, according to operators.

Landing cost is the total cost of delivering the shipment to Nigeria from a foreign country, including all expenses incurred from the point of production to the point of delivery.
Refined petroleum products often arrive in the country via the Atlas Cove, from where it is transferred to jetties via daughter vessels. From jetties, the fuel is moved to various tanks.

Marketers say this difference of N150 between the landing cost and the pump price has to do with the cost of moving PMS from the port to various filling stations across the country. This also includes marine costs, and the Nigerian Ports Authority charges, among others.

The PMS landing cost is different from that of diesel, aviation fuel, and other petroleum products.

In foreign currency, the country spends an average of $4.16bn annually if converted the N6.2tn at the rate of N1,520 per dollar. However, there are arguments that the NNPCL spends more than this on PMS importation.

The actualisation of Dangote’s promise is expected to strengthen the naira.
According to industry reports, Nigeria spends at least $10bn annually on the import of PMS, aviation fuel, diesel and other petroleum products.

Analysts believe that not less than one-third of the country’s annual foreign exchange expenditure goes into fuel imports.

Importation stoppage
A reliable source at the Central Bank of Nigeria said that the anticipated commencement of fuel supply by the Dangote refinery in June would herald a positive shift in the nation’s economy.
According to the source, the move to halt fuel imports will lead to a substantial reduction in the demand for foreign exchange, thereby strengthening Nigeria’s economic position.

The source further noted that, with the demands on forex reducing, the naira would regain strength.”As the dollar demand reduces, the naira will rebound and that is good for the economy,” the CBN source said.

Soneye said the NNPCL is no longer a corporation and could not comment on Dangote refinery’s impact.
The Director of Press and Public Relations, Ministry of Finance, Mr. Mohammed Manga, could not be reached for comments on Sunday as calls and messages sent to him went unanswered.
Also, the Director of Corporate Communications, Central Bank of Nigeria, Hakama Sidi Ali, did not respond to calls to her phone. She had yet to respond to a message sent to her line.
But the Director-General of the Centre for the Promotion of Public Enterprise, Dr Muda Yusuf, said the commencement of refining of petrol by the Dangote refinery would be a game changer for the Nigerian economy, especially from the perspective of the effect on the foreign exchange market and domestic energy cost.
Yusuf noted that, currently about 30 per cent of Nigeria’s import bill is on petroleum products.
“This has been estimated at between $10bn and $15bn annually over the decade. This would amount to a substantial easing of demand pressure on the foreign exchange market,” he stated.
Yusuf added further, “Already we have seen the impact of the domestic refining on diesel and aviation fuel importation. Even the prices have dropped. I therefore expect to see a major impact on the exchange rate.
“However, this positive outlook would depend on how much of the feedstock of crude can be sourced locally by the refinery. If the refinery has to resort to crude oil importation, the optimism about the foreign exchange impact may have to be moderated. Because that would imply some significant forex outflows for crude importation.”
He added that Nigeria is likely to see less importation of petrochemical products and other associated by-products from the refining process.
During an energy conference in Abuja recently, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, opined that Nigeria does not need to import fuel, expressing concerns that the bulk of the country’s foreign exchange goes into fuel importation.
“We must find a solution to our forex problem. Nigeria does not need to import fuel. We should free our scarce forex for other sectors of the economy. I am aware that the bulk of our forex goes to the importation of refined oil products.” Lokpbiri stated, expressing optimism that home-based refineries would put an end to fuel importation.

Marketers plan meeting
Meanwhile, fuel marketers said plans had been concluded to meet Dangote for discussions on possible price cuts as his refinery begins the production of PMS next month.

The marketers, under the aegis of the Independent Petroleum Marketers Association of Nigeria, told The PUNCH on Sunday they would meet with Dangote to negotiate a discount through bulk purchases.
Dangote’s 650,000 barrels per day refinery has been trying to secure crude supplies from the United States following the inability of Nigeria to ramp up production.
The refinery, which is the largest in Africa and Europe when it reaches full capacity, has since commenced the sale of diesel and aviation, but its petrol is yet to hit the market.
In April, Dangote crashed the price of diesel from around N1,500 to N1,000 per litre.
But Nigerians are currently eagerly waiting for petrol, which is the major fuel used by transporters, small-scale businesses and individuals for alternative power generation.
The promise of Dangote to end fuel import may be a relief to marketers and Nigerians, who are yet to fully recover from the recent fuel scarcity that nearly brought the economy to a halt in Lagos, Abuja and other parts of the nation.
Speaking in an interview with our correspondent, the National Vice President of the IPMAN, Hammed Fashola, disclosed that the marketers had requested a meeting with the Dangote Group chairman.
According to Fashola, there will be a follow-up to a letter written to Dangote earlier to fast-track a meeting and reach an agreement before the commencement of the sale of PMS.
Fashola had earlier called on the company to consider working directly with the association instead of individuals.
He noted that IPMAN should be a beautiful bride before Dangote for being in control of over 80 per cent of the filling stations in Nigeria.
The IPMAN leader said, “We have our letter with them, we are expecting their response, and we will surely do a follow-up. The letter was sent about a month ago and we are going to follow up. We are just like a ready-made market for Dangote. It is an advantage for him to have us in his programme. I believe that he would like to have us.
He added that the association would request a discount during the meeting with Dangote.“You know when you come together as a group, you have that negotiating power on your strength. There is no way we will not negotiate for a discount. That is why we don’t encourage individual company participation,” he stated.

Source: ThePunch

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