·As FG commits to adequate crude supply
THE Nigerian National Petroleum Company, NNPC Limited, yesterday, said it reduced its stake in the $20 billion Dangote Petroleum Refinery to 7.2 per cent, from the initial 20 per cent, to enable it invest in Compressed Natural Gas, CNG.
CNG Initiative is promoted by the President Bola Ahmed Tinubu administration directed at providing succour to the masses occasioned by the transitive hardships of the fuel subsidy removal policy of the Federal Government of Nigeria.
NNPC's spokesperson, Femi Soneye, disclosed this during a Brekete Family programme on Monday, adding that the company does not have any issues with Dangote refinery.
He also said that NNPC did not team up with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to distabilise the refinery operations as earlier speculated.
He said: "The reason for reducing our stake in Dangote refinery is because we wanted to invest in CNG. We observed that CNG is very cheap and all over the world, people are investing in clean and cheaper alternative energy.
"That is why the NNPC is building different CNG stations everywhere. We understand that with N10, 000, Nigerians can fill their cars and use it for two weeks. We realised that gas is cheaper in Nigeria, why don't we invest in it since this is what people are doing all over the world?
"We want all Nigerians to know that the NNPC does not have any issue with the Dangote Refinery. We are part of the owners of the Dangote refinery and we don't want it to collapse.
"We invested billions of naira into the Dangote refinery. As of today, we have a 7.2 per cent stake in the refinery. So, why would we want to sabotage such a company?"
Enforcement of PIA essential
Management of Dangote Petroleum Refinery, which had earlier indicted some parties, especially the International Oil Companies, IOCs, for starving it of adequate crude supply, weekend, urged the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), to enforce the domestic crude supply obligation as specified in the Petroleum Industry Act (PIA), insisting that refineries in Nigeria should be allowed to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen, as enshrined in the PIA act.
Spokesperson of the Dangote Group, Anthony Chiejina said last night: "We are in receipt of NUPRC's statement that they have facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals, we would like to thank them for this allocation but at the same time we wish to let them know that we are yet to receive these cargoes.
"Aside from the term supply we bilaterally negotiated with NNPCL, so far NUPRC has only facilitated the purchase of one crude cargo from a domestic producer. The rest of the cargoes we have processed were purchased from international traders.
"All we are asking for is for refineries in Nigeria to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen. This is specified in the PIA. Unfortunately, the NUPRC has effectively admitted in their statement, that they will be unable to enforce the domestic crude supply obligation as specified in the PIA citing "sanctity of contracts.
According to Chiejina, "Our attention has been drawn to reports alleging that the Dangote Refinery has backtracked by acknowledging that NNPC supplied about 60 per cent of the 50 million barrels we lifted.
"To clarify, we have never accused NNPC of not supplying us with crude. Our concern has always been NUPRC's reluctance to enforce the domestic crude supply obligation and ensure that we receive our full crude requirement from NNPC and the IOCs.
"For September, our requirement is 15 cargoes, of which NNPC allocated six. Despite appealing to NUPRC, we've been unable to secure the remaining cargoes. When we approached IOCs producing in Nigeria, they redirected us to their international trading arms or responded that their cargoes were committed.
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"Consequently, we often purchase the same Nigerian crude from international traders at an additional $3-$4 premium per barrel which translates to $3-$4 million per cargo
"We therefore still insist that we are unable to secure our full crude requirement from domestic production and urge NUPRC to fully enforce the domestic crude supply obligation as mandated by the PIA."
NUPRC commits to meeting target
However, the Commission said that the Federal Government and Crude Oil Producers in the country have committed to a sustainable supply of crude oil to Nigerian refineries under a market-determined pricing system.
The producers under the aegis of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce Industry (LCCI) at the instance of the NUPRC agreed to concede to a framework that would be mutually beneficial with a focus on ensuring that the local refineries are not strangulated with off-the-curve prices.
