Oil & Gas
Petrol Crisis: Trucks stranded at depots as NNPCL, Dangote tango over pricing
Oil marketers have yet to commence the loading of Premium Motor Spirit, popularly called petrol, despite assurances by the Federal Government that the commodity will be available this weekend.
Saturday PUNCH gathered that though some PMS vessels had arrived in the country at the NNPC’s Apapa and Port Harcourt depots, loading by independent marketers had yet to begin.
As a result, petrol queues in major cities persisted on Friday despite the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, earlier promising that the product would be massively available before the weekend.
But the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria, Mustapha Zarma, said on Friday that the loading of products at depots had yet to commence, stressing that the queues could last till Monday.
“Maybe the improvement in supply will start tomorrow or Sunday but as of yesterday (Thursday) and today (Friday), there has not been much loading of products. And even if there has been loading today, I don’t think it is much.
“That is why the queues are still visible. We cannot confirm the massive release of products as announced by the minister until maybe Monday,” Zarma stated.
On whether the petrol being expected was the one from the Dangote refinery, Zarma replied, “I am not in a position to answer that. It is NNPC that should answer that.”
NNPC earlier stated on Thursday that it would start lifting products from the Dangote refinery on September 15, 2024.
Zarma had told our correspondent on Thursday that about 2,000 petrol tankers were still at various NNPC depots waiting to lift products.
He said, “The queues in Abuja are heavy. Nobody is loading. Right now, most of the tickets of independent marketers, which had been paid for since the last three months have not been cleared to load.”
The President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, also confirmed that marketers had yet to start lifting petrol as required.
“We are aware of what the minister said, but we don’t have products yet. We have not started lifting the product as it is supposed to be and that is why the cost is very high in filling stations that have it.
“People struggle so much to get the product to sell to keep their businesses running. Once the products are readily accessible, the price will stabilise and the queues will clear. That is the situation.”
Presidential aide attacks Dangote
Meanwhile, a presidential aide said the Dangote Refinery was running away from pricing in order not to look bad to Nigerians.
The official, who spoke on condition of anonymity because of the sensitivity of the matter, noted that the refinery was the sole determinant of pricing, adding that it could not sell fuel below its cost price.
“The petrol price cannot be less than N1,000; that was why Dangote decided to push it to the government. So, if the price is determined by the Federal Government, people can attack the government. How does a private company ask the government to fix its price?” the official stated.
In a statement on Thursday, the Dangote Group Chief Branding and Communications Officer, Anthony Chiejina, had said the PMS market in Nigeria was strictly regulated and the refinery would wait for relevant government agencies for the price.
He said, “The PMS market is strictly regulated, which is known to all oil marketers and stakeholders in the sector, hence we cannot determine, fix, or influence the product price, which falls under the purview of relevant government authorities.”
However, the NNPC, in another statement by its spokesman, Olufemi Soneye, made a contrary claim about the price.
The company held that the PMS market had been deregulated and market forces would determine the price of the product.
Soneye was quoting the Executive Vice President of Downstream, NNPC, Adedapo Segun, saying Section 205 of the Petroleum Industry Act, which established NNPC Ltd, stipulated that petroleum prices were determined by unrestricted free market forces.
“Additionally, the exchange rate plays a significant role in influencing these prices,” the NNPC submitted.
Market forces
Experts told our correspondent that if the NNPC and the Federal Government allowed market forces to determine the price of Dangote petrol, it might be as high as N1,000 per litre.
“Can Nigerians buy petrol at N1,000 or N1,100?” a depot operator queried, asking the government to intervene to ensure affordable energy for Nigerians.
Speaking with our correspondent, an energy consultant and expert, Henry Adigun, said the cost of producing a litre of PMS is an average of N750, without any additional cost.
According to Adigun, this could rise to N800/litre when other margins are added, which will also increase when it gets to the filling stations.
He stated that the NNPC could decide to buy from Dangote and sell at a subsidised rate to the masses. The consultant, however, called for transparency in the entire process.
“Anybody that is expecting N400 or N500 petrol is just wasting his time. It won’t happen,” Adigun added.
Similarly, Professor Emeritus, Wumi Iledare, held that the PIA did not empower anyone to set the price of petrol, saying it should be determined by the forces of demand and supply.
Iledare stated that the Nigerian Midstream and Downstream Petroleum Regulatory Authority had the responsibility to ensure there was no price gouging.
The don advocated for a willing seller, willing buyer arrangement, saying the NMDPRA should not allow the NNPC to be the sole buyer of Dangote PMS.
He rejected the payment of shortfalls on PMS, nothing that the sale of petrol to all marketers in naira would crash the price.
Until the market becomes fully deregulated with many participants, Iledare suggested that Nigeria should practise what he called price modulation with a committee looking at important determinants of demand and supply to agree on a price to be reviewed as the situation changes.
OPS warns NNPC
The Organised Private Sector on Friday warned that allowing market forces to determine the prices of fuel would bring about more volatility in the sector.
In a statement made available to Saturday PUNCH, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, Dele Oye, said the chamber condemned the recent announcement by the Minister of State for Petroleum, Heineken Lokpobiri, that the Federal Government would no longer interfere in the pricing of PMS in the country.
He said NACCIMA was particularly alarmed by the potential impact of this decision on businesses, consumers, and the overall economic landscape, adding that the deregulation of PMS prices, coupled with the influence of foreign exchange illiquidity, was likely to result in significant volatility and unpredictability in fuel prices.
“The possibility of a sharp increase in fuel prices, potentially exceeding the initial rise from N600 to N800 at NNPC stations is a grave concern. This will undoubtedly lead to a surge in inflationary pressures, eroding the purchasing power of consumers and putting immense strain on businesses already struggling to navigate the challenging economic environment.
“A more gradual and well-planned approach to PMS pricing is essential to ensure stability, predictability, and sustainable economic growth in Nigeria,” he stated.
In an interview with our correspondent, the President of the Manufacturers Association of Nigeria, Francis Meshioye, said the Federal Government should examine the underlying factors causing the price hikes before attempting to address the problem, noting the need to devise long-term solutions.
He said, “The effort to control fuel prices has been largely sabotaged, and the cost of goods has also increased. The government should take the time to examine the root of the issue. There are underlying factors causing these problems, and they cannot be addressed without tackling the fundamental issues that led to the price hikes. It’s time to stop with superficial solutions; what we need are quick and effective measures. They must identify what triggered the increases and devise a strategic plan to address the underlying problem. The key concern is that the government should focus on long-term solutions because energy supply is crucial to manufacturers.”
Meshioye added that the inconsistencies in the energy sector were adversely affecting the operational strategies employed by manufacturers, as they were constantly required to plan in alignment with the current economic realities in the country.
According to the MAN boss, the Federal Government should engage the services of patriotic experts and stakeholders in the energy sector, whose recommendations would be adopted for implementation after brainstorming on how to get lasting solutions to the problem.
Also, the Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said fuel scarcity results in profiteering, and the only way the government can stop it is to ensure the availability of the product and promote competition.
“Generally, three critical factors determine the prices of petroleum products: procurement costs, logistics costs, and product availability. The different prices we are currently witnessing are consequences of these factors. If the conditions around these variables improve, we would see a moderation in prices as well as less variability. It is product scarcity that results in profiteering. The way to tackle this exploitative practice is to ensure product availability and promote competition,” he stated.
TUC considers strike
The Trade Union Congress criticised the increase in fuel prices, saying it undermined the new minimum wage of N70,000.
The TUC revealed that it would convene to discuss potential strike action, noting that “with the current situation, anything can happen.”
In an interview with Saturday PUNCH, the National Deputy President of the TUC, Tommy Etim, expressed concerns that the hike would lead to higher costs for goods and services.
He stated, “Our focus right now isn’t just on whether we are considering a strike. Given the current circumstances, anything is possible. It may not even originate from us. For instance, the #EndBadGovernance protest wasn’t initiated by us, it was a response to pressing economic issues.”
Etim emphasised that any decision regarding a strike would depend on the positions taken by individual labour centres.
“Once the various labour unions have made their decisions, we will formulate a unified stance for organised labour,” he added.
But the Nigeria Labour Congress reiterated that it would meet to give direction on how to engage the Federal Government on the fuel hike.
Spokesperson for the NLC, Benson Upah, said the appropriate organs of the body would meet and take decisions.
Nigerians trek, ride bicycles
Following the hike in fuel prices, which has increased the cost of transportation across the country, some Nigerians have resorted to the use of bicycles for interstate movement.
Our correspondents, who travelled to major cities in the country on Friday, reported that some Nigerians opted for trekking and cycling.
Some residents of Ogun State said they had abandoned their cars in favour of public transport, coupled with trekking, to cope with the unbearable hardship caused by the fuel crisis.
A senior health worker in the state, Mrs Fauziyah Adesola, said she had dropped her car and cut down on unnecessary journeys.
“With the fuel subsidy removal and the price rising from N200 to N600 per litre, I initially tried to stubbornly use my personal car, but I found out that it was a battle I couldn’t win. I was burning so much on fuel, children’s school bills were skyrocketing, and the cost of food and many other things were rising, yet the salary remained unchanged.
“So, I switched to using public transport when going to my workstation outside Abeokuta, and I added a bit of trekking. I have since found peace. I have also cut down on unnecessary journeys and social engagements,” she lamented.
Another resident, Mr Kola Adio, said he had also parked his car and embraced public transport and trekking to manage the burdensome cost of transportation.
He said, “I stopped taking my car to work in January, and I have noticed that many people in my neighborhood have done the same. I now use public transport to work, which costs me an average of N2000, compared to the N10,000 I was spending daily.”
A man, David Michael, said he now uses commercial motorcycles, popularly called okada, to get to work.
He said, “Is it not better to spend N1,200 on a bike to work daily than about N5,000 or even more driving myself? It is common sense. What I do now is just to take my car to church when the whole family is involved.
“I have also learnt to trek for at least 10 minutes from my house to the junction to get a bike to my work station. Many people are doing the same because this economy is harsh. It is terrible. None of us prepared for this situation, but God will see us through.”
In some parts of Delta State, a similar trend is observed as some Nigerians in Asaba trekked to work, while others used bicycles for movement within the state capital on Friday.
A resident in the city, Mr Monday Iwu, said he resorted to using a bicycle because he could not afford to buy fuel at the exorbitant price.
“I have a car, but since the fuel hike, I have parked my car and have been using a bicycle to work. However, our problem is the road. There are no proper roads, and cars, trucks, and even tricycles don’t allow us on the road; they harass us with their big vehicles. That’s our only fear, but we have no other options.”
Speaking with our correspondent, a young woman residing in the Ekeki axis of Yenagoa, Bayelsa State, Tarindo Mike, said she had reduced her movements due to the increase in transportation fares caused by the fuel price hike.
He said, “I’m just managing. Like today, where I used to pay N100, they now charge N150. I waited for two or three Keke before the last one carried me, and the rider said, ‘You know that fuel is high, and I’m just carrying you for N100.
“The situation is depressing. As a seller, I sample the prices of intend to buy the next day, but when I go with the money, I’m told the price has increased, and it makes me sad.”
In Ibadan, the Oyo State capital, a middle-aged woman” who identified herself only as Funke, said she trekked from Ring Road to the Challenge area of the city on Friday because she could not afford the high fares that motorists demanded due to the fuel price hike.
Similarly, a resident in the Odo-Ona Elewe area of Ibadan, who simply gave his name as Mr Luku, said, “Most of the people living in this community often trek long distances to major roads where they can then board Keke Maruwa (tricycle) or Micra taxi cabs when they have business in other areas of Ibadan.
“This is how we have been trying to cope with the fuel situation since Tinubu removed the subsidy on petrol. Many people in this community don’t go out except for important reasons.”
Also, a commuter in Abia state, said, “We have decided to trek so that instead of paying N400, we can now pay N300. Honestly, this fuel hike is changing the attitude of residents of the state. We now engage in trekking to cushion the effect of the hike.”
When our correspondent spoke to a bicyclist, he said, “I decided to fix my abandoned bicycle so I wouldn’t need to pay N400 from Douglas Road to Orji. Did you notice that passengers have resorted to trekking? There’s always a way out.”
Heineken Lokpobiri, minister of state for petroleum resources (oil), says Nigeria will conform with the production quota set by the Organisation of Petroleum Exporting Countries (OPEC).
On June 2, OPEC extended Nigeria’s production quota of 1.5 million barrels of crude per day (bpd) to 2025.
OPEC said Nigeria should maintain the production level till December 31, 2025.
The oil cartel increased Nigeria’s production level to 1.5 million bpd for 2024 at its ministerial meeting on November 30, 2023.
However, Nigeria has been producing below the quota.
Speaking after OPEC’s 56th joint ministerial monitoring committee (JMMC) on October 2, the minister said Nigeria remains fully committed to the objectives of the body’s declaration of cooperation (DoC).
“Nigeria remains fully committed to the objectives of the DoC, and I can confidently confirm that our country is in conformity with the agreed production limits,” he said.
“While we continue to ramp up production in line with our national interests, we are doing so within the framework of OPEC’s guidelines, as we remain committed to balancing responsible production with our economic goals, and continue to meet our obligations under the DoC.”
OPEC RETAINS PRODUCTION OUTPUT POLICY
At the meeting, the oil cartel and its allies, known as OPEC+, retained its oil output policy, including a plan to start raising output in December.
According to a statement by OPEC, the group reviewed the crude oil production data for the months of July and August 2024 as well as current market conditions.
“During the meeting, the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation confirmed that they had achieved full conformity and compensation according to the schedules submitted for September,” the oil cartel said.
OPEC said the three countries reiterated their resolve to maintain full conformity and compensation throughout the remaining period of the agreement.
Final estimates of September’s crude oil production levels, according to the oil cartel, would be based on authorised secondary sources that would be accessible by the second week of October.
The oil alliance added that it will provide production figures for the nations that are part of the declaration of cooperation (DoC).
“The committee noted the three separate technical workshops between representatives from the Republic of Iraq, the Republic of Kazakhstan, and the Russian Federation and the secondary sources,” OPEC said.
“The meeting was aimed at discussing September production details and submitting their revised compensation plans that include the August overproduction as per the submitted plans to the OPEC Secretariat while also emphasising the need for some members to make further cuts to compensate for overproduction.
“The JMMC emphasised the critical importance of achieving full conformity and compensation. It will continue to monitor adherence to the production adjustments agreed upon at the 37th OPEC and non-OPEC Ministerial Meeting (ONOMM) held on 2 June 2024.
“The Committee will also continue to monitor the additional voluntary production adjustments announced by some participating OPEC and non OPEC countries as agreed upon in the 52nd JMMC held on 1 February 2024.”
Furthermore, according to OPEC, the committee would continuously assess market conditions.
OPEC said the next meeting of the JMMC is scheduled for December 1, 2024.
Petroleum marketers have raised an alarm that the Nigerian National Petroleum Company Limited, NNPCL, portal used for the purchase of Premium Motor Spirit (Petrol) has been shut down against dealers, making it impossible to apply for the commodity.
The spokesperson of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike disclosed this in a statement on Wednesday.
According to him, marketers have more than 2,000 pending tickets for the purchasing of 45,000 liters of petrol.
He hinted that the situation may lead to another round of fuel scarcity nationwide.
“I can’t confirm the price now because the portal is still shut down.
“We have more than 2,000 tickets for 45,000 liters (of petrol). That is 45,000 multiplied by 2,000, you can now know the number of million liters it will be. This is just an estimate, you know I don’t work with NNPCL and I don’t know what is on their system,” Ukadike stated.
He added that a 45,000-litre truckload of PMS is around N39.5 million, making N79 billion when multiplied by 2,000.
Reacting to the development, the spokesperson of NNPCL, Olufemi Soneye admitted that the state-owned firm has a significant backlog to address.
He said that the portal closure was intended to prevent the company from holding marketers’ funds for an extended period.
Soneye assured that the portal would soon be reopened; however, he failed to state the date when it would happen.
“We have a significant backlog to address. The closure is intended to prevent us from holding marketers’ funds for an extended period,” Soneye had explained.
“It will be reopened once the backlog has been sufficiently reduced. We are working to address it as soon as possible,” he stated.
The development comes as Nigerians struggle with high energy costs.
Recall that NNPCL in September 2024 announced a fresh price increase for petrol nationwide after lifting the product from Dangote Refinery.
Nigerians currently buy petrol between N950 and N1,100 per liter nationwide.
The import of Automotive Gas Oil (Diesel) into Nigeria increased by 22.66 percent to 4.94 billion liters in 2023 from 4 billion liters in 2022.
The National Bureau of Statistics disclosed this in its latest Petroleum Products Distribution Data released recently.
The data also showed that 109.39 million liters of Diesel were locally produced in 2023, compared to 102.47 million liters reported in 2022.
This represents a 6.76 percent growth rate in locally produced diesel in Nigeria.
Comparatively, Nigeria heavily depends on the import of diesel to meet its consumption demand based on the NBS data for 2023.
On the other hand, the Data also showed that the import of Premium Motor Spirit (petrol) dropped 13.77 percent to 20.30 billion liters in 2023 compared to 23.54 billion liters in 2022.
Recall that in April 2024, Dangote Refinery commenced the domestic sale of diesel in Nigeria.
The Nigerian National Petroleum Company (NNPC) is prioritising supplying naira-denominated crude oil to the Dangote Refinery in the first phase of a naira-for-crude scheme, a development expected to positively impact the domestic fuel supply chain and enhance transparency.
Oil transactions in Nigeria are often conducted in US dollars, given the international nature of the oil market and the global reliance on the dollar for such trade.
However, the Federal Executive Council recently adopted a proposal by President Bola Tinubu to sell crude to Dangote refinery and other upcoming refineries in naira.
The federal cabinet approved that the 450,000 barrels meant for domestic consumption be offered in naira to Nigerian refineries, using the Dangote refinery as a pilot. The exchange rate will be fixed for the duration of this transaction.
Eche Idoko, publicity secretary of CORAN said the federal government had promised to only supply crude oil to the Dangote refinery as it was the “only refinery producing petrol”.
“We were present at the inaugural meeting where the federal government did make us understand that they would want to start the naira sales in phases. That they would start with refineries that are producing PMS first and extend it to other refineries and that’s where they are right now and we can say the first phase of the naira sales will start in October,” Idoko said.
“No other refinery (apart from Dangote refinery) is selling petrol at the moment but I know that there are other refineries working on their plants that would be producing petroleum like the Clairgold refinery which intends to produce PMS.
“There is also Aradel which is working on their PMS plant. There is also Azikel Petroleum Refineries, which is also working on producing PMS.
“The last I heard with respect to that arrangement, the October date still remains and we have spoken with people at Dangote and they said conversations are ongoing.”
However, he said the details of the transactions would be made known when the federal government makes the announcement.
“For instance, are they going to discounts as in the normal practice when you are selling crude to the international traders? If there is going to be a discount, that is what will guarantee the reduction in price of petroleum products,” Idoko said.
“We also want to know at what rate is the exchange rate pegged. Is the federal government intending to maintain the N1,600 exchange rate?”
He said Nigerians would know the potential price of petroleum products when all the details are unveiled.
On September 13, 2024, the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency announced that the Federal Executive Council under the leadership of President Bola Tinubu approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira.
“From October 1, NNPC will commence the supply of about 385kbpd (385,000 barrels per day) of crude oil to the Dangote refinery to be paid for in naira,” the committee had declared.
The chairman of the Technical Sub-Committee is Zacch Adedeji, who doubles as chairman of the Federal Inland Revenue Service.
Dare Adekanmbi, the special adviser on media to the FIRS Chairman told Journalists that the committee is working day and night to ensure that things go according to plans.
The panel explained in September that this initiative would help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country.
“Since then, the implementation committee chaired by the Minister of Finance and we, the technical committee, have worked intensely with NNPC and Dangote refinery to fashion out the details of the modalities for the implementation of the FEC approval,” Adedeji had stated.
While stating that crude would be sold to Dangote in naira from October 1, the committee chairman and FIRS boss said, “In return, the Dangote refinery will supply PMS (petrol) and diesel of equivalent value to the domestic market to be paid in naira.
“Diesel will be sold in naira by the Dangote refinery to any interested off-taker. PMS will only be sold to NNPC. NNPC will then sell to various marketers for now. All associated regulatory costs (NPA, NIMASA, etc.) will also be paid in naira. We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative.”
Adedeji explained that the technical committee that worked to flesh out the initiative would transition to an implementation execution and monitoring committee working out of Lagos for the next three to six months.
The committee, which includes Lydia Jafiya; the permanent secretary of the Federal Ministry of Finance; the FIRS boss, as well as representatives from NNPC, Central Bank of Nigeria, AfreximBank, and the Nigerian Upstream Petroleum Regulatory Commission, was set up to craft a robust template that will ensure the successful implementation of the initiative.
THE Nigeria Extractive Industries Transparency Initiative (NEITI), says outstanding collectible revenues due to the Federal Government in the oil and gas industry have risen to 6.071 billion dollars and N66.4 billion as at June 2024, respectively.
According to the News Agency of Nigeria (NAN), NEM disclosed this on Thursday in Abuja at the public presentation of its 2022 and 2023 Independent Oil and Gas Industry Reports.
The News Agency of Nigeria (NAN) reports that the report is being prefered by the NEITI Board and the National Stakeholders Working Group (NSWG).
The report was unveiled by Mr Ola Olukoyede, Chair-man, Economic and Financial Crimes Commission (EFCC), alongside Senator George Akume, Secretary to the Government of the Federation and Chairman, NSWG, NEITI and other dignitaries.
He promise to address the findings that the industry owed the government $6 billion and N66 billion.
He disclosed that he has authorised the transfer of over #1 billion of funds recovered funds through previous NEITI audits, into the Federation Account.
“Over the years, as an anti-corruption agency in the country, we are part of the success of the work of NEITI.
Where the work stops at the level of presenting this report, then we take off from there to ensure that the recommendations therein and revelations therein particularly as relates to criminal infractions, and violation of our financial laws, it is taken up seriously.
“I am also happy to announce to you that as of yesterday (Wednesday), I still approved that over a billion so remitted to the Federal Government account as a result of the work of the last report of NEITI.
“Since then we have been making recoveries. We have cases in court we are prosecuting and with this report 2022 and 2023. We are also going to do everything within our power, deploying all our resources to ensure we implement the recommendations therein,” EFCC boss he said.
The breakdown of the report showed that outstanding liabilities were 6.049 billion dollars and N65.9 billion in unpaid royalties and gas flare penalties, due to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as collectible revenues by Aug. 31, 2024.
It also provided a detailed analysis of the information and data regarding who owes what in outstanding revenues due to the government.
A further breakdown showed outstanding petroleum profit taxes, company income taxes, withholding taxes, and Value Added Tax (VAT), due to the Federal Inland Revenue Service (FIRS), amounting to 21.926 million dollars and N492.8 million as of June 2024.
On fuel importation, the latest NEITI report disclosed that a total of 23.54 billion litres of Premium Motor Spirit (PMS) were imported into the country in 2022, while 20.28 billion litres were imported in 2023.
This represented a reduction of 3.25 billion litres, or a 14 per cent decline, following the removal of the fuel sub-sidy.
A detailed 10-year trend analysis (2014-2023) in the NEITI report showed that the highest annual PMS importation into the country, 23.54 billion litres, was recorded in 2022, while the lowest, 16.88 billion litres recorded in 2017.
The NEITI report also disclosed that a total of N15.87 trillion was claimed as under-recovery/price differentials between 2006 and 2023, with the highest amount, N4.714 trillion, recorded in 2022.
On crude production, fiscalised crude production in 2022 stood at 490.945 million barrels, compared to 556.130 million barrels produced in 2021, representing an 11 per cent decline.
However, in 2023, NEIT’s independent report revealed total fiscalised production of 537.571 million barrels, and 46.626 million-barrel or 9.5 per cent increase from total production recorded in 2022.
A 10-year trend (2014-2023) of fiscalised crude oil production in Nigeria showed the highest production volume of 798.542 million barrels was recorded in 2014, while the lowest, 490.945 million barrels, was recorded in 2022.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has advised the Federal Government to increase its stake in Dangote Refinery to 45 per cent from the current seven per cent.
Its President, Mr Festus Osifo, made the call yesterday while presenting a communique and recommendations from the third edition of the “PENGASSAN Energy and Labour Summit” in Lagos to newsmen.
This, PENGASSAN said, is in order to foster product availability to meet local demand and ensure energy assurance and security for the citizens.
The union said the refineries should be modeled after the Nigerian Liquefied Natural Gas (NLNG), which appears to have been successful.
He said: “Ramping up efforts to make the Nation’s four refineries work; once operational, the government should divest majority shareholdings.
“And own at most 49per cent of the shareholding in the four refineries. Core investors will be brought in to take the 51per cent as applicable in NLNG.”
Bemoaning a situation whereby the inter land petroleum depots in six geopolitical zones of the country are dilapidated, Osifo stressed the need for the government to get the depots fixed in collaboration with the private sector so as to ensure smooth distribution of petroleum products and enhance the national strategic reserve.
PENGASSAN also called for the expansion of pipelines that could be used in the delivery of refined petroleum products across the length and breadth of the country as this would reduce the pressure put on the roads by trucks carrying the products.
The group also recommended digital intervention to curtail crude oil theft; reengineer security architecture; and ensure ease of doing business, by reducing bureaucracies or complex regulations that make the gas investment unattractive to investors, among others.
Osifo said those caught for crude oil theft should be punished severely by competent courts of jurisdiction to serve as a deterrent to others.
He said participants were worried that three years after the passage of the PIA the section of the act had not been implemented at all.
The act stipulated that three per cent of the operational revenue of the oil companies should be contributed to the host community fund.
He enjoined the government to also create a business friendly environment by creating incentives for more investors to tap into the nation’s abundant gas resources.
In the upstream, it suggested an amendment of the PIA to include the divestment framework, noting that the previous divestments are not yielding results as the companies lack financial capacity to sustain and expand the divested oil wells.
The group also enjoined the Nigerian energy sector to leverage Artificial Intelligence (AI) advancement to improve productivity and sustainability, tackle oil theft and smuggling.
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