Restrict Fuel Importation To Licensed Refiners Only, Dangote Urges

Nigerian Oil Companies Risk Sanction

Dangote Group has suggested a provision in the Petroleum Industry Bill that will allow only refiners with active licences to import petroleum products into the country.

This was one of the recommendations made by the Chief Strategy Officer, Dangote Group, Aliyu Suleiman, during a presentation when members of the National Assembly’s Joint committee on PIB visited Dangote Refinery project site.

The provision in the PIB, according to Suleiman, will encourage investment in local refining.

Dangote is building a 650,000-barrels-per-day integrated refinery and petrochemical project in Lagos and is expected to be Africa’s biggest oil refinery and world’s biggest single-train facility upon completion.

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

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“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 recommended that the backward integration policy should be applied in the downstream petroleum sector to encourage investment in local refining.

“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,” he said.

 According to Dangote Group, fuel imports into Nigeria are of very low quality, and this has harmful effect on health.

The company stated that the low-quality fuel affects the durability of motor vehicles, especially high-performance cars.

Suleiman recalled that Nigeria and other ECOWAS members signed a declaration in February 2020 to adopt cleaner fuels.

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

The company also raised concern over the provision in the PIB for third-party access to pipelines.

“Section 113(3) mandates the regulator to ensure third party access to facilities and pipelines for midstream and downstream petroleum operations. It is not clear how this would work but it means that a third party could potentially request to use any excess capacity at the refinery, fertiliser or trading facilities,” it said.

The company recommended that if this must be retained, the provision should be for tariffs to be on a willing-buyer, willing-seller basis, adding, “Bill currently attempts to provide a formula for calculating this.”

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