Oil & Energy
Experts Demand Refinery Operators’ Compliance With Extant Laws
Indigenous petroleum products refiners have been cautioned over attempts by some operators to monopolise the downstream petroleum sector operations.
Key industry experts and advocacy groups said monopolistic practices would destroy the industry and promote inefficiency and further drive costs to high levels.
The industry analysts were reacting to recent misunderstanding of the position of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) with regard to implementation of existing regulations to provide clement environment suitable to investors.
They also expressed concern at the cost of importation of Premium Motor Spirit (PMS) also known as petrol, which is raising fear of possible adjustment of pump price by marketers.
They also cautioned that expected downward pricing of refined products from Dangote refinery may not be feasible as cost of crude whether supplied locally and in local currency would be priced in relation to international benchmark.
Speaking on the sidelines of a one-day roundtable on “The Midstream and Downstream Petroleum Industry in Nigeria: The Roles of NMDPRA in ensuring Energy Security”, held in Lagos, at the Weekend, one of the discussants and energy expert, Henry Adigun, said “as at Wednesday July 31, 2024, landing cost of petrol is N1,100 per liter aside from associated costs of trucking the product to dispensing outlets”.
Adigun insisted that Nigerians should not expect a low priced product from Dangote Refinery given that the quality of products from the facility is of high premium with the crude pricing supply to the refinery not lower than what it is sold in the international market.
According to him, the Nigerian National Petroleum Company Limited (NNPCL) is not going to sell crude below cost of production and since crude is an international product, Nigeria must be guided by international best practices.
He also warned about ongoing subsidy on petrol which has made the market uncompetitive, which he also said would continue to create disruptive supply arrangements.
In his submission, Adigun called for a substantial review of fiscal policies that will entrench competition and strong regulatory environment.
Earlier in his review of the Downstream market, another industry expert, Taiwo A. Ogunleye, said petroleum has remained an important part of both the world’s energy mix and the global economy and keystone of our modern energy system helping to drive the global economy.
He noted that petroleum plays an essential role in shaping our lives from fuelling vehicles and generating electricity to producing a wide range of everyday products and involves a wide range of commercial activities from the exploration of reserves deep in the ground to the sale of the final product to the end customer.
The industry is frequently shown in the form of a ‘value chain’, specifically a set of activities performed sequentially in order to deliver a final product, and includes upstream, midstream and downstream sectors.
Ogunleye also noted regulatory issues as key to creating efficiency and transparency in the value chain.
Citing a Report issued by the Oil, Gas, and Mining Policy Division of the World Bank, he agreed that “Inadequate regulation and enforcement can also harm the efficiency of fuel supply.
“Sector regulations that have not been updated in decades, lack sufficient coverage, or list outdated fuel specifications may deter entry of experienced operators adhering to high standards”.
He stated that an efficient legal framework for the downstream petroleum sector requires legislation that clearly defines and limits the role of the government in order to avoid undue interference and establishes principles and rules for the private and public participants in the supply chain in order to create a level playing field and promote fair, transparent, and healthy competition.
The Federal Government and key Petroleum Products marketers have proposed new measures to help curb rising cases of road accidents involving petrol tankers.
This followed recent incidents of road accidents resulting in cremation of hundreds of lives and causing extensive damage to properties.
Speaking at the Discourse organised by Mejor Energy Marketers Association of Nigeria (MEMAN) in Lagos, Thursday, with the theme “Improving Safe Transportation of Petroleum Products”, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, noted with dismay the number of casualties the country recorded recently due to tanker accidents.
Lokpobiri stressed the need for an enhanced training for tanker drivers, installation of detection leak devices as well as other safety systems that can assist drivers.
He called on Marketers and Federal Road Safety Commission (FRSC) to strengthen collaboration with stakeholders, especially in the training of tanker drivers.
On his part, the Minister of State for Petroleum Resources (Gas), Ekperikpo Ekpo, reaffirmed government’s commitment to providing enabling environment to ensure safety of petroleum products transportation.
Ekpo, who was represented by Engr. Abel, said consideration should be given to more safety means of transporting products like the pipelines and railway line.
He stressed the need for better training for drivers and implementation of safety regulations within the industry.
Earlier, Chairman, MEMAN, Huub Stokman, said the Association has elaborate training manual for members truck drivers.
Stokman insisted that more training programmes and consistent adherence to safety measures would help to curb road accidents involving tanker drivers.
Also speaking, the National President, Nigerian Association of Raod Transport Owners (NARTO), Yusuf Lawal Othman, called for support.
The Chairman, National Gas Expansion Programme (NGEP), Prof. Mohammed Ibrahim, has said that the production of coal bed methane, an unconventional form of natural gas extracted from coal, is set to begin in Benue State.
Prof. Ibrahim staed this while addressing newsmen at the end of a joint meeting of the National and State gas expansion committees with Benue State Governor, Hyacinth Alia.
He said the Federal Government is committed to expanding gas availability in Nigeria for domestic use and mobility.
Ibrahim added that extracting gas from unconventional coal sources rather than traditional hydrocarbon reserves is a way to boost gas availability.
“Essentially there are four areas of implementation that the committee has identified. One is to pioneer the production of gas from what you call coal bed methane, which means that Benue is going to pioneer in the country the production of gas not from conventional hydrocarbon, but from non-conventional coal just so that the nation will have an alternative source to gas availability”, he said.
Also speaking, the Chairman, Benue State Gas Expansion Programme, Dr. Emmanuel Chenge, said the gas expansion initiative would contribute to the economic transformation of Benue State.
“The good news is that Benue is set to join the league of gas-producing states and if we are conversant with what being a member of the gas-producing state is, it shows that Benue State will start getting derivatives from that sector of the economy”, Dr Chenge stated.
The National Gas Expansion Programme (NGEP) was established to boost the exploration and utilisation of gas in Nigeria and make Nigeria a gas-based industrial nation by increasing the use of gas for transportation, cooking, and industrialization.
The Nigeria National Petroleum Company Limited (NNPCL) has said there was no explosion at the newly refurbished Warri Refining and Petrochemical Company (WRPC).
NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, made this known in a statement issued on Friday night.
Soneye said reports claiming that there was an explosion at the Warri refinery were false and should be ignored and disregarded by the public.
According to him, the refinery was undergoing routine maintenance.
His statement read, “NNPC Ltd. wishes to clarify that there was no explosion at the Warri Refining and Petrochemical Company (WRPC). Any reports suggesting otherwise are completely false.
“On January 25, 2025, operations at WRPC Area 1 were intentionally curtailed to carry out necessary intervention works on select equipment, including field instruments that were impacting sustainable and steady operations.
“These intervention works are essential to ensure the production of on-specification finished and intermediate products, particularly Automotive Gas Oil (AGO) and Kerosene (Kero).
“The routine maintenance is progressing as planned, and Area 1 will be back in operation within the next few days.
“Despite ongoing interventions, over the past 11 days, AGO loading has been maintained at an average of eight trucks per day, with a sufficient supply available to sustain ongoing truck load-out operations”.
Soneye added that the NNPCL was committed to ensuring an uninterrupted supply of petroleum products from the refinery.
He said the company “appreciates the patience and cooperation of all stakeholders as it completes these essential maintenance activities”.
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