PENGASSAN Tells FG to Increase Your Stake in Dangote Refinery

The Nigerian National Petroleum Company Limited (NNPC Ltd) has been requested by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to ensure that its interest in Dangote Refinery and Petrochemicals is increased from the existing 7% to at least 45% by the Federal Government.

It said that doing this will give the public even more energy security and assurance.

Additionally, it recommended that the Federal Government establish strategic petroleum product reserves and collaborate with private sector entities to preserve the existing petroleum product storage in the nation’s six geographic zones.

When it’s operational, it says that petroleum products will be kept there and made available only when there’s a scarcity.

It was suggested that this would assist in removing the poor roads and severe erosion-caused recurring shortages that frequently cause long lines at gas stations around the nation.

Comrade Festus Osifo, the President of PENGASSAN, made these remarks on Tuesday in a media briefing in Lagos. The association’s communiqué and the suggestions from the third PENGASSAN Energy and Labor Summit (PEARLS 2024) were the topics of the briefing.

Osifo and Comrade Lumumba Okugbawa, Secretary-General of PENGASSAN, jointly signed the communiqué.

Osifo demanded that local petroleum product production be increased. Additionally, he contended that President Bola Tinubu’s elimination of the gasoline subsidy on May 29, 2023, was not necessarily the reason for the high cost of petrol at the pump; rather, it was largely caused by the naira’s devaluation due to its floating value.

Additionally, he contended that it resulted in significant revenue production for government agencies and parastatals as well as the Federation Allocation Accounts Committee.

“We need to step up our efforts to get the four refineries in the country operating. Once they are, the government should sell off the majority of its shares and hold no more than 49% of the total.” The 51% share in NLNG will be taken by core investors, if applicable.

“National pipeline network expansion to facilitate the delivery of refined petroleum products, as this will lessen the strain that trucks transporting these goods place on our roadways.”

Additionally, he demanded that greater infrastructure for compressed natural gas (CNG) be provided nationwide.

According to him, CNG is the most reasonably priced and environmentally friendly energy source needed to run an automobile in the nation.

Regretfully, this product’s infrastructure is dispersed unevenly throughout the nation. The government should expand the reach of these facilities into every Nigerian city in collaboration with its partners.

“Affordable energy is necessary for energy security to be achieved. The government must make every effort to stabilize the exchange rate in order to guarantee affordability, as Nigerians’ ability to afford electricity will be severely hampered by the Naira’s ongoing decline.

The country’s oil and gas value chain needs to be strengthened and developed, according to the summit, in order to guarantee a more dependable and effective downstream distribution system.

Without such a system, the nation would be forced to deal with frequent gasoline shortages because its truck-based distribution system is insufficient and unable to satisfy Nigerians’ needs given the country’s susceptibility to disruptions from bad roads, flooding, and impromptu logistics plans.

In order to guarantee strong energy security, Nigeria’s energy demands necessitate a multidimensional strategy with a diverse Energy Mix comprising all accessible energy sources.

In order to improve Nigeria’s energy security, the summit stressed the necessity to find the ideal balance between utilizing our abundant hydrocarbon resources and embracing renewable energy.

Nigeria’s primary energy source is currently fossil fuels; as the globe moves toward greener energy, the Nigeria Energy Transition Plan’s implementation was looked at.

The summit came to the conclusion that Nigeria’s energy mix has not been improved in any significant way. This is necessary since it is getting harder to finance energy related to fossil fuels globally.

In order to encourage international and indigenous oil and gas companies to invest in increased crude oil production over the next five years, he continued, “the government should offer more incentives.”

The investment of 50% of the accruable revenue in renewable energy sources, such as solar, batteries, wind, hydrogen, hydropower, etc., is recommended.Currently, the majority of IOCs are working on creating greener energy enterprises and strategies worldwide. They need to collaborate with the Nigerian government to figure out how to deepen and expedite this in the domestic market.

He insisted that the Nigerian government create an energy mix policy as soon as possible that is both workable and feasible.

“This will establish the direction of policy and serve as the starting point for discussions with stakeholders and institutions that want to make investments in various energy sources.”
IOCs had already agreed to sell their crude in advance, according to Osifo, and they would not be required to stop selling the crude they had already promised to sell and provide to Dangote Refinery.

“What those companies said is that Dangote should pay some premium if it wants them to supply them immediately,” he stated. Therefore, the initial discussion over the Dangote Refinery and the claim that they weren’t providing the refinery with oil was sparked by the premium issue.

Regarding the NNPC Ltd., it possesses its own crude. The Buhari administration took out a loan from Afreximbank a few years ago. Repayment of the crude was linked to some of the crude.

Dangote ought to have initiated a conversation about crude supply five years prior, to be exact. Six months into production, you don’t start talking about crude supplies.

Five years ago, you started it and signed contracts. You are aware that we wish to proceed in this manner. Thus, that was a missed chance at first.Furthermore, as Nigeria, the crude was already dependent on loan repayment.