Dangote wants only refinery licence holders to import fuel

*Group says fuel imports into country of low quality, and harmful to health

DANGOTE Group has said giving licence to import petroleum products to only companies with active refining licences will encourage investment in local refinery.

The group, therefore, advised the National Assembly to include a provision that will ensure this in the Petroleum Industry Bill under consideration and due for passage, according to the Senate, before the end of April.

The Chief Strategy Officer, 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, highlighted several recommendations by the company.

He 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 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.

“It also impacts performance and durability of vehicles, especially high performance cars. ECOWAS members (including Nigeria) signed a declaration in February 2020 to adopt cleaner fuels,” it said.

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 adoption of the Afri-Fuels Roadmap.

The company described the provision in the PIB for third-party access to pipelines as a source of concern. 

“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.”

The Dangote group is building a 650,000-barrels-per-day refinery in Lagos.

The Chairman Senate Committee on Upstream, Senator Bassey Akpa has said the  ninth Assembly will pass the Petroleum Industry Bill (PIB) before the end of April 2021.

Akpa gave the assurance at the inauguration of the Nigerian Upstream Cost Optimisation Programme (NUCOP), in Abuja two weeks ago.

He said that the senate had given itself a timeline to ensure that the bill was passed because of its importance to the growth of the oil and gas sector in the country.

“We believe as members of the National Assembly that the real essence and what we must come to terms is to pay greater attention to the passage of the PIB.

“I want to assure this gathering that this 9th Assembly headed by Senator Ahmed Lawan will pass the PIB before the end of April 2021.

“We have set this timeline for ourselves as a body and we have provided everything that will help us achieve this target,’’ he said.