Page 9 - DMEA Week 34 2022

DMEA REFINING & FUELS DMEA

Small modular plants are feasible, and there are produce up to 1,000 barrels [per day] to 20,000
legal options for local organisations looking for barrels per day” of petroleum products, he said.
a way to get involved in the processing of crude Nigerian authorities are paying close atten-
oil, he said. “[Modular] refineries can be con- tion to the matter, he added, as about 700,000
structed, and [NNPC Ltd] has a framework for barrels per day (bpd) of the country’s crude oil
supporting those who want to do modular refin- production never reaches the market due to
eries,” he stated. theft, sabotage and breakdowns. Breakdowns
Kyari also pointed out that modular plants and shutdowns probably account for most of
had the potential to have significant impact on these volumes, or around 500,000 bpd, while
local fuel markets. “That’s why there are licences direct theft may make up only about 200,000
given out for modular refineries, and they can bpd, he added. ™

Ahmed: FEC has approved plan for summit

meeting on Nigeria’s gasoline subsidy

AFRICA NIGERIA’S Minister of Finance and National NGN3.35 trillion ($7.96bn) for the first half
Planning Zainab Ahmed said on August 18 of 2023. (According to previous reports, this
that the Federal Executive Council (FEC) had year’s bill is expected to reach NGN 6.72 trillion,
approved the National Assembly’s proposal for equivalent to $15.97bn.)
a summit meeting on the planned elimination of Currently, Ahmed continued, Abuja is
domestic gasoline subsidies. spending about NGN18.6bn ($44.19mn) per
Speaking to members of an ad hoc commit- day to keep domestic gasoline prices artifi-
tee set up by the House of Representatives to cially low. This amounts to a subsidy of around
investigate the subsidy policy, Ahmed said that NGN283.2 ($0.67) per litre, she stated, calling
the FEC had endorsed the plan drawn up by the this level of spending unsustainable.
National Assembly and that arrangements were The gasoline subsidy has been a drag on the
being made to convene the meeting. Nigerian government’s finance for years, not
As suggested by members of Parliament, least because the country remains dependent
those invited to the event will include represent- on imported petroleum products despite its
atives of the federal government, all of Nigeria’s own position as the largest crude oil producer
political parties, and all relevant stakeholders, in sub-Saharan Africa. However, the extent of
she said. this drag grew significantly in recent months, as
“When we engaged with the leadership of rising oil prices pulled fuel prices to new heights.
the Parliament, they recommended a national Nigeria’s government has been urged repeat-
stakeholders forum that will bring all major edly by international financial institutions (IFIs)
stakeholders together, including all political such as the World Bank to eliminate the subsidy
parties’ leaders,” Ahmed was quoted as saying by regime, and it was supposed to do so in February
Premium Times. “We reported that at the Fed- 2022 in line with the provisions of the Petroleum
eral Executive Council, [and] we got approval Industry Act (PIA) adopted in August 2021.
that it should be arranged, and the government Early this year, though, Abuja opted to extend
is looking at that.” the subsidy for another 18 months, apparently
She went on to say that she saw the meeting as out of concern that this politically unpopular
necessary to the country’s fiscal and political move might trigger social unrest and labour
stability, owing to the high cost of subsidies on stoppages. ™
gasoline, known local as premium motor spirit
(PMS).
“There is a need to have this as a national
discussion,” Premium Times quotes Ahmed
as saying. “If we all as a nation agree that this
PMS subsidy should go, then we all agree that
it should go. It is not the president alone that is
deciding. It is not the Ministry of Finance that is
suggesting. I hope this is done very soon, that we
take that decision.”
Nigeria’s federal government spent no less
than NGN6.3 trillion ($14.97bn) on gasoline
subsidies between 2013 and 2021, the finance
minister added, and has budgeted another Nigeria will spend nearly $16bn on gasoline subsidies in 2022 (Image: NNPC Retail)

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