By Lateef Adegbite
The Nigerian National Petroleum Corporation, NNPC, now baptized, Nigerian National Petroleum Company Limited, NNPCL, with the passage of Nigerian Petroleum Industry Bill, PIB, passed by the 9th National Assembly, and signed into Law by former President Muhammadu Buhari, appears to have practically withdrawn from importation of Premium Motor Spirit, PMS, popular, petrol from offshore refineries in Malta Island into the Nigerian Market.
The Nigerian oil company may have changed its stand to continue importation of petrol from the offshore refineries as the oversea suppliers are no longer finding funny to sell the product on credit to the oil octopus over unsettled North American country of the United States , US$6 billion debt .
Babatunde Fashola, a former governor of Lagos state and immediate past minister of Works under the Buhari’s Administration, had said that importation of petrol and other petroleum products into the country was due ‘’to lack of critical infrastructure like petroleum refinery ’’.
The former minister of Works had said that importation of petrol, over the years into Nigeria, which is a member country of the Organization of Petroleum Exporting Countries, OPEC, had accounted for about 30% of the country’s forex demand.
He had said that this can be reduced to a manageable level of 10%, once the NNPCL, operate and maintained refineries, in PortHarcourt, Warri and Kaduna, with a processing capacity of 445000b/d, and the US, $20 billion Dangote refinery with a processing capacity of 650,000b/d and local refineries that had been licensed starts humming in readiness to start production of petroleum products to be sold in the local market.
Given that NNPCL, which has Mele Kolo Kyari, as the Group Managing Director, GMD,may no longer make much demand for much forex, to use for importation of petrol into the country, since Dangote refinery has started producing petrol and other petroleum products that are being sourced locally, financial a itnalysts are optimistic that will stabilize the value of the naira in the country’s Autonomous foreign exchange rate market.
Energy analysts believe that NNPCL, had laid the foundation to stop importation of petrol from the offshore refineries in Malta Island since 2023, as it was said to have concentrated much of its efforts on the rehabilitation of the PortHarcourt, Warri and Kaduna, Refining and Petrochemical plants as well as monitoring the level of work at the multi-billion dollars Dangote refinery to ascertain when it will begin production
As a prelude to solving the country’s lingering fuel scarcity may have informed why the Nigerian Government to had planned to engage the services of companies in the private sector to take over the operation and maintenance of the country’s three refineries currently undergoing Turn Around Maintenance, TAM.
At the instance of President Bola Ahmed Tinubu, who incidentally was a former Lagos state governor, Mele Kolo Kyari, led NNPCL, was said to have invited companies ‘’to bid for the operation and maintenance of the refineries last February.
The oil Company may be looking for reputable and credible companies to operate and maintain its operated refineries, which are currently works in bits and fits to ensure reliability and sustainability towards petrol supply and other petroleum products obligations but that was how far it could go.
Energy experts believe that if the NNPCL Authorities had succeeded in getting companies that are interested in taking over the operation and maintenance of the government owned three refineries, the terms of contract, would have covered a wide range of refinery business processes, including and product storage crude oil receipt, storage, refining and product storage, distribution and maintenance of the refinery as at and when due.
They noted that NNPCL, may not have gotten the companies that would take over the operation and maintenance of the local refineries because of the conditions that had been spelt out that interested Companies must have a minimum annual turnover of at least US $2 billion in five fiscal years period, starting from 2019, 2020, to 2023. This may have informed why Companies, both foreign and Local, which may have been interested in bidding for the refineries were said to have declined.
Zacch Adedeji, Chairman, Federal Inland Revenue Service, FIRS, and member of the Presidential Committee on the sale of Crude Oil and Refined Products in the country may have gladdened the heart of Nigerians when he said on Friday, September 13, 2024 that NNPCL, will begin loading of petrol from the Dangote refinery on Sunday, September 15, 2024.
The FIRS, boss, had said that the NNPCL, which has been importing petrol into the country and selling to the marketers will still serve as ‘’ the sole off-taker from the Dangote refinery’’, with the major and Independent Petroleum Marketers Association of Nigeria, IPMAN, members, sourcing the product from the national oil company.
The company on its own part, according to the FIRS, helmsman, will be supplying approximately 3385,000b/d of Crude oil to the refinery , with payments made in the local currency. There are indications that all other regulatory costs will also be paid by the company in naira, as the government had directed that all transactions within the country must be made in the local currency and not US, dollar or any other foreign currency.
This may have informed why the Nigerian Government has jerked up the pump price of petrol from the original N600.00 to the market rate of N897.00, to meet Dangote ‘s demand , in order to remain in the business and still make profit .
. Going by the government directive on the use of naira in domestic transactions, may have encouraged officials of the Dangote refinery to have agreed to supply petrol and other products to NNPCL, for sale in the domestic market and payments made in naira.
Although, AGO, DPK and Aviation fuel, produced from the Dangote’s multi-billion dollars refinery , would be sold to directly to the marketers but the Leadership of IPMAN, are still pushing that the sales of petrol from the refinery should be open for all in line with in line with ‘’ the willing –buyer and willing-seller’’ policy earlier agreed with NNPCL.
The recent remarks by Adedeji, the Crude Oil Sales Technical Committee member, that the President, who also serves as the the country’s minister of Petroleum Resouces, has given the nod to NNPCL, to start loading petrol from Dangote refinery and sell to other marketers, may have been seen by motorists and commuters as a big relief.
on Saturday, September 14, 2024, over 100, trucks, belonging to the NNPCL, had arrived at the Dangote refinery at LFTZ, in preparation for the scheduled petrol lifting on Sunday, September 15, 2024 with the initial 25 million litres. An elated Adedeji, had said that all agreements relating to the price have been completed and loading of the first batch of petrol from the Dangote refinery will commence on September as agreed by the parties.
He may have gladdened the heart of Nigerians when he said that the agreement that had been reached between NNPCL and Dangote refinery will ease the lingering fuel crisis across the country and probably bring down the pump price of price petrol from the present N897.00. At present, NNPCL, according to an inside is buying the product at N776.00 per litre from the Dangote refinery.
Fahola, a former Lagos state may have given an insight on how the pump price of petroleum products, particular, petrol, will drop, insisting that this will be made possible as such costs like shipping, insurance and port charges would have been eliminated now that NNPCL, is lifting the product directly from Dangote refinery .
