REVEALED: Petroleum Industry Bill Would Permit Only Dangote Refinery, NNPC To Import Fuel If Passed Into Law

If handed in its present type, the Senate model of the Petroleum Industry Bill will solely allow two entities to import petroleum merchandise into Nigeria: those that personal energetic refining licenses and the Nigeria National Petroleum Corporation Limited.

However, the legislation makes it unattainable for even modular refiners like Walter Smith to import the product, as a clause within the involved part supplies that licenses be given based mostly on the refining file of the allow holder.

REVEALED: Petroleum Industry Bill Would Permit Only Dangote Refinery, NNPC To Import Fuel If Passed Into Law 2

By the time the invoice turns into legislation, the Dangote refinery, which has a 650,000-barrel per day refining capability, can be in operation, making him the one license holder that might be capable to import any substantial quantity of petrol.

The legislation additionally supplies for the continuation of the NNPC’s Direct Sale Direct Purchase contract, which specialists have questioned for being fraught with inconsistencies.

Having supplied for the introduction of a free market in Section 205 a, the Senate model of the PIB goes forward to contradict this stance in Section 317h.

The first subsection says, “The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining.”

Backward integration primarily refers to a transfer by firms to supply supplies they imported prior regionally.

Within the context of this invoice, nonetheless, the Senate states what it considers as backward integration;

“To support this, license to import any product shortfalls shall be assigned only to companies with active local refining licenses.”

The legislation additional goes forward to rule out small gamers.

“Import volume to be allocated between participants based on their respective production in the preceding quarter.”

Experts really feel modular refinery license holders are excluded from importing like the remainder of the nation with this clause.

“I believe this must have been as a result of a deal between Dangote and the NNPC,” claims a supply near the event and consideration of the invoice who spoke with SaharaReporters.

“Players like Walter Smith, who are just doing about 5,000 liters of diesel, will get little or no quota if they have to import PMS based on their production in the previous quarter.”

An power lawyer, Chiagozie Nwokonko, questioned who the senators had in thoughts when writing within the clause. “From an economic point of view, why should you limit the importation of petrol to only those who have active refining licenses? Who are you protecting? Is it the national economy or consumer welfare?”

“This is just vested interest; it means they are going to be subsidizing the high cost of production.

“If you’ve somebody with a refinery whose price is just too excessive, the particular person might go to Ghana the place it’s cheaper and convey within the product, successfully leaving his plant moribund. Everybody must be allowed to import.”

However, the source, close to the workings of the Senate, asked the National assembly to consider allowing the downstream regulatory authority, which will be created when the bill comes into law, to create impartial regulations to guide any future importation of petrol.

“I believe the provisions above will create a duopoly in a worth deregulated surroundings, thereby destroying the Nigerian downstream trade as we all know it right now,” the source said.

“The legislation and the authorities ought to shield the market (different gamers together with Nigerian entrepreneurs) and the shoppers quite than encourage monopoly/duopoly by locking out competitors.”

Despite its potential move to eliminate competition and create a duopoly, Section 317 h. of the Senate PIB version commits to ending the sale of dirty fuel in Nigeria.

The fifth clause in the sections says;

“To safeguard the well being of Nigerians, imported petroleum merchandise shall conform to the Afri-5 specification (50ppm – particles per million sulfur) as per the ECOWAS declaration of February 2020 on the adoption of the Afri-Fuels Roadmap.”

Right now, Nigerians purchase petrol that accommodates at the very least 3,000 sulfur ppm.

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REVEALED: Petroleum Industry Bill Would Permit Only Dangote Refinery, NNPC To Import Fuel If Passed Into Law

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