Just In : FG gives fresh update on withdrawal of dormant refining licences
The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority has explained it has no plan yet to withdraw refining licences awarded to companies that have yet to build their refineries.
The NMDPRA said this in reaction to claims by the Dangote Group that out of the 25 companies granted licences to build refineries by the Federal Government, only its company has since delivered.
The Vice President, Oil and Gas at Dangote Industries Limited, Devakumar Edwin, while lamenting that the NMDPRA allegedly granted licences indiscriminately to marketers to import dirty refined products into the country said, “The Federal Government issued 25 licences to build refineries and we are the only one that delivered on our promise. In effect, we deserve every support from the government. It is good to note that from the start of production, more than 3.5 billion litres, which represents 90 per cent of our production, have been exported. We are calling on the Federal Government and regulators to give us the necessary support in order to create jobs and prosperity for the nation.”
But the NMDPRA said Dangote is not the only refinery in Nigeria, saying there are others in various capacities.
Speaking in an interview with our correspondent, the spokesperson of the NMDPRA, George Ene-Ita, told our correspondent that he was not aware of this claim by Edwin, saying he would speak generally instead of reacting to Edwin.
“Is Dangote the only refinery in Nigeria? Refineries are refineries, either regular or modular. The important thing is that alongside Dangote, there are other refineries producing in this country, maybe not at the same capacity as Dangote; but there are other refineries. There are refineries going on, there are refineries before and there are refineries now. So, I don’t understand that claim. There are refineries now operating. We have a refinery in Imo State, we have two in Edo, we have in Delta, we have in Rivers. So, I don’t understand you saying Dangote claimed they are the only refinery that has delivered. Delivered what?” Ene-Ita queried.
Asked if the authority is contemplating the withdrawal of unused refinery licences, Ene-Ita said there was a time frame for doing that, clarifying that the holders of the licences still have time to build their refineries.
“There is a moratorium. When you are given a licence to establish a facility, whatever the facility, there is a condition attached to it. There will be a certain time that if you do not come on board to show intent and capacity, then we will be able to review it; that time has not come. I agree that you cannot give a licence to establish a particular facility and allow it to run ad infinitum. There will be a specified time frame. If you didn’t meet that time frame, we can now withdraw that provisional licence,” he added
Speaking with our correspondent, the Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, said the licences of the prospective refiners should not be withdrawn, opining that they might have reasons for the delay.
“I don’t think the government should withdraw those licences, we need more than one refinery in Nigeria. Those licensees that have yet to build may have their reasons. There are so many things that can be involved, like the issue of the passing of the Petroleum Industry Act and others. Then, total deregulation is very key. No investor will come in an environment where the government is still dictating prices. The government should not withdraw the licences yet,” he stated.
The $20bn Dangote refinery located in Lekki, Lagos State is expected to begin the sale of petrol in a few weeks.
The President of the Dangote Group, Aliko Dangote, said his refinery would stop the importation of refined petroleum products into Nigeria and Africa. However, the company have raised concerns over the alleged refusal of International Oil Companies to sell crude to the refinery.
“It seems that the IOCs’ objective is to ensure that our Petroleum Refinery fails. It is either they are deliberately asking for ridiculous/humongous premium or, they simply state that crude is not available. At some point, we paid $6 over and above the market price. This has forced us to reduce our output as well as import crude from countries as far as the US, increasing our cost of production.
“It appears that the objective of the IOCs is to ensure that Nigeria remains a country which exports Crude Oil and imports refined Petroleum Products. They (IOCs) are keen on exporting the raw materials to their home countries, creating employment and wealth for their countries, adding to their GDP, and dumping the expensive refined products into Nigeria – thus making us to be dependent on imported products. It is the same strategy the multinationals have been adopting in every commodity, making Nigeria and Sub-Saharan Africa to be facing unemployment and poverty, while they create wealth for themselves at our expense. This is exploitation – pure and simple. Unfortunately, the country is also playing into their hands by continuing to issue import licences, at the expense of our economy and at the cost of the health of the Nigerians who are exposed to carcinogenic products,” Dangote’s Edwin stated.
Meanwhile, marketers have urged the Federal Government to ensure the supply of crude to the 650,000-capacity refinery, fearing that importation of crude would make the refined petrol more expensive.
