If the new provision on fuel imports inserted by the Senate in the Petroleum Industry Bill is adopted by the House of Representatives and the President, only active refinery licence holders will be allowed to import petroleum products into the country when the bill becomes a law.
Companies holding refining licences in the country include Dangote Oil Refinery Company, Waltersmith Refining & Petrochemical Company Limited, OPAC Refineries, Niger Delta Petroleum Resources, BUA Refinery & Petrochemicals as well as Edo Refinery and Petrochemical Company Limited.
On February 28 that Dangote Group had suggested for inclusion in the PIB a provision that the licence to import petroleum products should be assigned only to companies with active refining licences, saying this would encourage investment in local refining.
Currently, all companies duly registered under the Corporate Affairs Commission as providers of goods and services in the downstream sector of the Nigerian oil and gas industry are eligible to apply for petroleum products importation permit, subject to having access to appropriate storage facilities which could be owned or leased from third parties, according to the Department of Petroleum Resources.
A new provision (subsection (8) of section 317) introduced by the Senate into the PIB said the Nigerian Midstream and Downstream Petroleum Regulatory Authority shall apply the backward integration policy in the downstream petroleum sector to encourage investment in local refining.
It said, “To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences. Import volume to be allocated between participants based on their respective production in the preceding quarter.
“Such import to be done under NNPC Limited Direct Sale/Direct Purchase scheme. To safeguard the health of Nigerians, imported petroleum products shall conform to the Afri-5 specification (50ppm sulphur) as per the ECOWAS declaration of February 2020 on adoption of the Afri-Fuels Roadmap.
Under the DSDP scheme, which was introduced by the NNPC in 2016, selected companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the corporation.
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The Senate and House of Representatives, according to copies of the passed bills seen by our correspondent, said in section 317 that from the effective date of the bill, the government, on behalf of the federation, may request the services of NNPC Limited as supplier of last resort to ensure adequate supply and distribution of Premium Motor Spirit for a period not exceeding six months.
“All associated costs shall be for the account of the federation,” they added.
Subsection (1) of section 205 provides that “subject to the provisions of this Section, wholesale and retail prices of petroleum products shall be based on unrestricted free-market pricing conditions.
The President of the Senate, Ahmad Lawan, had last Tuesday named a seven-member committee to harmonise the different versions of the PIB recently passed by both chambers of the National Assembly, after which it would be sent to the President, Major General Muhammadu Buhari, for his assent.