Page 6 - DMEA Week 33 2019
P. 6
DMEA PoliCy DMEA
Nigeria prepares for audit of downstream sector
aFriCa
THE government of Nigeria is gearing up to conduct a wide-ranging audit of the country’s downstream oil and gas infrastructure.
in a statement, the Petroleum Products Pricing Regulatory Agency (PPPRA) said that it intended to launch the probe before the end of the year. “Oil and gas processing, storage and distribution facilities, jetties downstream and pipelines, retail outlets for oil and gas, etc., will be the focus of the survey,” it said.
“All oil and gas depot owners, marketers, retail outlets and LPG plant owners are stake- holders in this exercise,” it added. Regular assessments help these stakeholders collect accurate data and ensure steady deliveries of fuel to the market, it asserted. ey also make the Nigerian downstream sector more attractive to investors, it quoted PPPRA’s Executive Secretary Abdulkadir Saidu as saying.
e audit will review the impact of the gov- ernment’s policies and regulations on the viabil- ity and operating environment of downstream operators, the statement said. it will also seek to identify gaps in existing infrastructure and to determine whether the relevant parties have closed previously identi ed loopholes, it noted.
Fuel smuggling
PPPRA did not say whether the probe would also assess reports of fuel smuggling into
neighbouring countries.
O cial data from the Department of Petro-
leum Resources (DPR) show that Nigeria cur- rently consumes around 52mn litres per day of gasoline. But the Guardian, a local newspaper, reported last week that domestic consumption levels appeared to be closer to 45mn lpd, with the remaining 7mn lpd being transported illegally across the border to buyers in Chad and other neighbouring states.
if smuggling is taking place at this level, Nigeria would forego significant amounts of revenue from gasoline sales, the newspaper remarked. it speculated that the country might be losing as much as NGN1.085tn ($2.983mn) per day, assuming that black-market fuel is being traded at a price of NGN300 ($0.82) per litre, or NGN115 ($0.32) per litre above the domes- tic level. (Nigeria’s government subsidises fuel prices below world market levels.)
Losses from fuel smuggling are likely to have a negative e ect on the Nigerian economy as a whole, an industry expert told the Guardian. “How can Nigeria survive when it pays for the petroleum consumption of more than ve coun- tries? if the prevailing price of crude oil remains below $70 [per barrel] by the end of this year, Nigeria will slip back into recession by the end of the rst quarter of 2020,” said the expert, who was not named.
P6
w w w . N E W S B A S E . c o m Week 33 22•August•2019
