The Petroleum and Natural Gas Senior Staff Association of Nigeria has called on the Federal Government to increase its stake in the Dangote Petroleum Refinery from the current 7% to at least 45%.
This move, according to the association, is essential for ensuring greater energy security and stability for Nigerians.
Accordingly, PENGASSAN’s President, Festus Osifo, made this statement during the presentation of a communiqué in Lagos, which included recommendations from the association’s recent Energy and Labour Summit.
He emphasized that Nigeria’s energy security hinges on significant government involvement in the refinery, explaining that, “energy security is cardinal for the survival of any nation, and Nigeria is not an exception.”
He also pointed out that citizens require energy that is not only affordable but also accessible and readily available.
Osifo further suggested that the government should collaborate with private sector players to enhance and maintain petroleum product storage facilities across Nigeria’s six geopolitical zones.
He said, “When operational, petroleum products will be stored there and only made available when there is a shortage in supply.”
He added that this would help prevent fuel shortages that are exacerbated by poor road infrastructure and erosion, which often cause long queues at petrol stations.
Additionally, Osifo advocated for the expansion of pipelines for transporting refined petroleum products across the country, highlighting that this would reduce the burden on roads that are currently overused by trucks carrying these products.
He stressed that a stable pipeline network is vital to achieving efficient energy distribution nationwide.
To ensure the affordability of energy, PENGASSAN urged the government to stabilize the exchange rate. Osifo warned that the continuous depreciation of the naira threatens the affordability of energy for Nigerians, emphasizing, “The continuous slide of the naira will greatly hamper the affordability of energy in Nigeria.”
On the topic of local refining capacity, Osifo pushed for the immediate rehabilitation of Nigeria’s four refineries. Once operational, he suggested the government should divest a majority shareholding, retaining at most 49% ownership, while core investors should be allowed to acquire a 51% stake.
This, he believes, would invite private sector expertise and capital into the refining process, enhancing efficiency.
Reflecting on the government’s investment in the Dangote Refinery, Osifo lamented that the NNPC could only secure a 7.2% stake in the $20 billion refinery, despite Dangote’s earlier willingness to sell up to 20%.
“Dangote is open to conversations on selling the stake… but unfortunately, they could only afford seven per cent,” he said.
Osifo also addressed the impact of naira devaluation on the affordability of Premium Motor Spirit.
He explained that the major factor driving up PMS prices was not merely the removal of subsidies but rather the drastic devaluation of the currency.
“If, for example, our exchange rate was at N450 to a dollar, PMS would be selling for around N320 or N350 per litre,” Osifo noted, adding that the “real problem is devaluation.”
In addition to its focus on energy security, PENGASSAN urged the government to enhance Nigeria’s oil and gas value chain.
This, the association said, would create a more efficient and reliable distribution system in the downstream sector, as the current reliance on truck-based distribution is vulnerable to disruptions caused by bad roads, flooding, and other logistics challenges.
The association also touched on the recent trend of divestment by International Oil Companies noting that while these moves present risks, they also offer opportunities for local empowerment and innovation.
Osifo explained that this divestment was driven by factors such as global energy transition goals, financial strategies, and evolving regulations.
However, he cautioned that these changes could lead to reduced foreign direct investment and a potential dip in production levels, adding that Nigeria must manage the situation carefully.
To safeguard against the negative impact of divestments, PENGASSAN called for the full implementation of the divestment framework under the Petroleum Industry Act.
“A comprehensive divestment framework under the PIA should be strictly adhered to and implemented,” Osifo stated.
He also urged the government to develop a job protection system to ensure that Nigerian workers are not displaced post-divestment, and suggested that Memorandums of Understanding be signed between trade unions and divesting companies to secure jobs and improve employee welfare.
SOURCE: News Hub Creator