May 30, 2024

Criteria for importation of petrol is beyond willingness, interested companies must show credibility to be trusted with products – Dr. Fatona

Oredola Adeola

Dr Lai Fatona, Managing Director, Niger Delta Exploration & Production Plc has cautioned the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) against indiscriminate issuance of licences for the importation of Premium Motor Spirit (PMS), also known as petrol, to companies that do not possess the right infrastructure, credibility and trust to import the products.

The MD of Niger Delta E&P made this known in a chat with EnergyDay while reacting to the statement credited to  Engr. Farouk Ahmed, Chief Executive Officer of NMDPRA, in respect of the criteria that would be required by importers to qualify to import petrol to Nigeria.

The NMDPRA’s Chief Executive on Tuesday after a meeting with President Bola Tinubu in Abuja said that conditions which must be met by importers of diesel and jet-kero will also be applicable to marketers willing to import petrol.

In his reaction to the statement credited to the NMDPRA’s boss, Dr Fatona said that everyone cannot qualify as a refined petroleum product importer. He noted that the requirements for the importation of the petrol are beyond the willingness to import.

He revealed that the existing laws limited those who can bring products into the country, (referring to the provision of section 197 (2) of the Petroleum Industry Act (PIA) 2021, which states that only companies that are lessees producing crude oil and/or condensates or who are holders of crude oil refining licences are eligible to supply wholesale petroleum liquids (including petrol importation).

Dr. Fatona further noted that the prospecting importer must possess the technical expertise and credibility to be trusted with products.

He said, “The importer must demonstrate investment capacity in logistics or transportation, handling and storage required to import the product.

“The regulator must maintain checks and balances to prevent the import of out-of-spec products into the country,” the MD NDEP said.

Dr. Fatona, therefore, emphasised that the investors must have a firm belief in domestic refining with a level of commitment.

He further disclosed that the removal of subsidy on petrol has reduced the limitations facing the downstream sector, adding that marketers and the downstream investors should expect a decent reward for investment in domestic refining of petroleum products.

“This is the right time for those right and qualified investors to be prepared to take on the responsibilities presented by these new investment opportunities in the interest of Nigeria and our society, ” the MD Niger Delta E&P said.

EnergyDay checks showed that the Niger Delta E&P is the owner of the 11,000 barrel per stream day Ogbele refinery complex in Rivers State, which successfully produced 152.84 million litres of diesel, kerosene, naphtha in 2022, which represented an increase of 105 per cent from its output level in 2021.

Currently, the Nigerian National Petroleum Company (NNPC) is the last-resort supplier, tasked with importing refined petrol to ensure adequate supply and distribution in the country.

The NNPC has been exporting crude oil and exchanging it for refined petroleum products, through the direct sale, direct purchase (DSDP) scheme which commenced in 2016, replacing the erstwhile 2015 crude oil Offshore Processing arrangement (OPA) contracts.

The full deregulation of the downstream sector has therefore offered petroleum products marketers and investors the opportunity to apply for licences to import refined petrol into the country.