TheCable

The senate has recommended that the importation of Premium Motor Spirit (PMS), popularly known as petrol, be limited to holders of local refining licence.

This is according to the Petroleum Industry Bill (PIB) passed by the senate.

Holders of crude oil refining licences in Nigeria include Dangote Oil Refinery Company, Waltersmith Refining & Petrochemical Company Limited, OPAC Refineries, Niger Delta Petroleum Resources, BUA Refinery & Petrochemicals and Edo Refinery and Petrochemical Company Limited.

At the moment, companies registered under the Corporate Affairs Commission (CAC) as providers of goods and services in the downstream sector of the Nigerian oil and gas industry are eligible to apply for petroleum products importation permit.

According to the Department of Petroleum Resources (DPR), this is subject to having access to appropriate storage facilities which could be owned or leased from third parties.

But this arrangement may be changed based on a new provision in section 317, subsection 8 of the PIB report released by the senate joint committee on downstream petroleum sector; petroleum resources (upstream); and gas.

According to the section, the red chamber seeks to ensure that petrol importation is restricted to holders of refining licence.

It said the volume of importation will be determined by the production output of such refiner in the preceding quarter.

“The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining,” the document reads.

“To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences.

“Import volume to be allocated between participants based on their respective production in the preceding quarter.

“Such import to be done under NNPC Limited Direct Sale/Direct Purchase (DSDP) scheme.

“To safeguard the health of Nigerians, imported petroleum products shall conform to the Afri-5 specification (50ppm sulphur) as per the ECOWAS declaration of February, 2020 on adoption of the Afri-Fuels Roadmap.”

Although the bill is subject to the approval of the president, the senate noted that for proper implementation, the minister of petroleum resources will establish a transition plan within 60 days of the effective date of the act to prevent disruptions of the industry operations.

“From the effective date, the Government on behalf of the Federation may request the services of NNPC Limited as supplier of last resort to ensure adequate supply and distribution of Premium Motor Spirit (PMS) for a period not exceeding 6 months,” the document added.

“All associated costs shall be for the account of the federation.”

The PIB report also notes that holders of crude oil refining licences in Nigeria will pay for domestic crude oil supply in Naira.