Page 8 - DMEA Week 19 2021

DMEA POLICY DMEA

Nigeria considers domestic LPG subsidy

AFRICA NIGERIA’S government is reportedly consider- We believe that the expansion [of this policy]
ing a plan to subsidise domestic LPG prices. to [cooking] gas, especially now that we are in
According to Ahmed Bobboi, the executive a decade of gas, will add value to the economy.”
secretary of the country’s Petroleum Equalisa- He continued: “If it’s working well for [gaso-
tion Fund (PEF), Abuja sees subsidies as a means line], and the government wants to promote the
of promoting the use of LPG as cooking gas. Tak- use of [cooking] gas. If we can take the practice to
ing this step would complement ongoing efforts gas, we believe that it will add value to the econ-
to encourage Nigerians to phase out the wood, omy in so many ways in the value chain.”
charcoal and other solid fuels, he said at an inter- Expanding the use of LPG will also mitigate
active meeting with reporters last week. some of the problems that can arise from the
Bobboi explained that the government was use of solid fuels, including deforestation and
considering a subsidy similar to the one it already ill health, he added. The African Refiners and
offers to sellers of gasoline. Currently, he noted, Distributors Association (ARDA) estimates that
PEF reimburses fuel retailers for any losses they indoor pollution from burning wood and other
may incur as a result of selling gasoline at the types of biomass contributes to the death of more
prices set by the state. This process, known as than 600,000 Africans each year, he noted.
equalisation, has already served to boost domes- Bobboi did not say when Abuja expected
tic demand for gasoline, and it could do the same wrap up discussions on the proposed LPG sub-
for LPG, he said. sidy. The government is working with represent-
“[LPG] is an essential commodity. If we are atives of the relevant ministries and state agencies
able to make it cheaper and accessible, we will to finalise the details of a policy proposal, and it
be able to improve the economy,” he was quoted will also have to bring that proposal into line with
as saying by The Guardian. “We have been able the Petroleum industry Bill (PIB), which is still
to successfully equalise petrol for over 45 years. being debated in Nigeria’s National Assembly.™

COMPANIES

ADNOC Distribution plans

to cut operating costs

MIDDLE EAST ABU Dhabi’s ADNOC Distribution said this added: “ADNOC Distribution maintains a
week that it was committed to reducing operat- strong financial position, with a robust balance
ing costs despite posting an increase in net prof- sheet at the end of the first quarter of 2021. The
its of nearly 60%. company remains well positioned to expand
The company announced its Q1 results which both its domestic and international portfolio.”
showed a net profit of $172mn, up from $109mn Having opened 64 new fuel stations in 2020
during the same period last year. and a further four opening during Q1 this year,
A 6.5% year-on-year reduction in operat- the firm is expected to continue its ambitious
ing expenditure (opex) and improved margins expansion phase throughout the remainder of
were cited as the main drivers behind its better this year and into 2022.
performance. It said that it “intends to accelerate delivery
In a presentation, the company, which is the momentum and remains on track to meet its
listed fuel distribution subsidiary of Abu Dhabi guidance to open a total of 70 to 80 new stations
National Oil Co. (ADNOC), said: “Reduction in across the UAE and [Saudi Arabia] by year end,
operating costs were achieved despite growth in of which 30 to 35 are expected to be opened in
the company’s retail network and were driven by the UAE”.
management initiatives to optimise opex across ADNOC Distribution was the second of the
business units.” parent company’s subsidiaries to welcome for-
“As part of the company’s ongoing trans- eign investment when a 10% stake was listed
formation, it remains committed to reducing during a late 2017 initial public offering (IPO).
operating costs and ensuring continued com- This followed Baker Hughes acquiring a 5%
petitiveness in the UAE fuel retail and conveni- stake in ADNOC Drilling in October that year
ence store sector,” the company said. A statement for $550mn.™

P8 www. NEWSBASE .com Week 19 13•May•2021