AMCON May Take Over Dangote Refinery As Liabilities Swell

Africa’s biggest oil refinery and the world’s largest single-train facility, Dangote Oil Refinery may run into a deep financial crisis from rapidly increasing interests amounting to millions of dollars indicating a possible takeover of the  project by the Assets Management Corporation of Nigeria (AMCON).Dangote Oil Refinery, a 650,000 barrels per day (BPD) integrated refinery project under construction in the Lekki Free Zone, Lagos, Nigeria, was expected to commence production in 2016 with $3.3billion financing secured in 2013.With the refinery now projected to commence operations in 2025, Dangote Group’s indebtedness to the financial institutions is estimated to hit $8.4billion by 2025. Presently, this debt burden has risen to 7billion dollars with debt servicing of almost 700million dollars per annum.The completion date of the refinery had been moved eight times. Whilst some might say this is not in the character for Dangote Industries and their numerous projects across different sectors, the problem is deeply rooted.A contractor at the delayed refinery project, speaking under the condition of anonymity, said that poor planning, underpayment of contractors, and a lack of proper project management with over 40 contractors on site has led to most of the delays. He also added that of the 40, none is willing to commission as there is no clear delegation of duty and over-decentralization leading to absolute chaos.With these incessant delays, some financing banks are already calling in their loans amid fears of liquidity crisis, while others are elated by the guarantee of huge interests to be recouped as soon as the refinery comes on stream.Dangote has been able to restructure the facilities from various local and international banks twice so far, most banks have totally refused to restructure for the third time with principal repayment also falling due as well as the annual interest payments.The Nigerian National Petroleum Corporation (NNPC) has made available $3.8billion as part of federal government’s 20% equity in the project, providing $1billion cash, while the remaining $2.8billion will be in crude supply.However, analysts have pointed out that NNPC’s 20% equity at $3.8billion makes the Dangote refinery overvalued at $19billion.When Aliko Dangote unveiled early plans for the refinery in September 2013 and announced that he had secured about $3.3 billion in financing for the project, the refinery was estimated to cost about $9 billion, of which $3 billion would be invested by the Dangote Group and the remainder via commercial loans, and begin production in 2016.However, after a change in location to Lekki, construction of the refinery did not begin until 2016 with excavation and infrastructure preparation, and the planned completion was pushed back to late 2018.In July 2017, major structural construction began, and Dangote estimated that the refinery would be mechanically complete in late 2019 and commissioned in early 2020. Experts, however, posit that the construction would likely  take at least twice as long as Dangote publicly stated, with refining capability not likely to be achieved until 2025.Meanwhile, last week the Minister of State for Petroleum Resources, Timipre Sylva, reiterated that Federal Executive Council (FEC) approved the acquisition of 20 per cent minority stakes by the NNPC in the Dangote Petroleum and Petro-Chemical Refinery.Sylva, while briefing State House correspondents after the virtual FEC meeting presided by Vice President Yemi Osinbajo on Wednesday at the Presidential Villa, said that the acquisition was in the sum of $2.76 billion.“The Executive Council also approved the acquisition of 20 percent minority stakes by the NNPC in the Dangote Petroleum and Petro-Chemical Refineries in the sum of $2.76 billion,” he said.This development has been described by industry observers as strange because $2.76 billion falls short of 20 percent of the Dangote project valued by the sponsor at $16 billion. Using the $16billion value, 20 percent should be $3.2billion and analysts have expressed dissatisfaction at the disparity in the project’s value and NNPC’s funding.Speaking with MMS Plus on the complexities with funding Dangote refinery, the Managing Director of Cowry Assets Management, Mr. Johnson Chukwu argued that the banks wouldn’t have any challenge from the financing because Dangote would have to pay the interests.“I don’t see the banks being unable to meet their liquidity because of the monies tied down in the Dangote refinery. Ultimately, if the investment is economically viable, when it starts operation it should be able to meet up the arrears. I believe the banks that went into this project understood some of these constraints and didn’t break their balance-sheets in the move to finance Dangote refinery. I don’t envisage any bank having a liquidity challenge as a result of investing in Dangote refinery. If there is any challenge it would come from Dangote, but it should be resolved when the project takes off,” he said.Commenting on the possibility that NNPC over-valued or under-valued the project in its 20% equity, Chukwu opined that NNPC may be looking at an enterprise valuation while the other value could be the net value.“The enterprise value could be higher than the amount Dangote has invested in the project. However, I wasn’t involved in determining that, so anything I say will be purely speculative,” he said.Despite the massive support of the federal government on the refinery project, things have gotten so bad for the billionaire that even income from his other businesses may not be enough to cover the interest rates, talk less of the principal.The $8.4billion debt represents 75% of Dangote’s net worth at $11.1billion and Africa’s richest man has to seek innovative ways to prop up his business now as the refinery project continues to be consistently delayed.In a related development, Nigeria’s controversial PIB Amendment and the crude swap saga has been described by industry observers as another attempt by the federal government to give a monopoly of importation for petroleum products into the country to Messrs Dangote.

Is this a ploy to ensure Dangote can make the excessive and extra profits he needs to manage his rising debt profile for the refinery under the guise of ongoing refinery projects? Nigerians will bear the brunt of the higher costs in petroleum products at a time when subsidies are reduced, analysts posit.Meanwhile, in a bid to address the flaws in the PIB, Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) have noted some downstream observations and recommendations for the Senate and House Committee reports on the PIB.A copy of this report obtained by MMS Plus last week, pushed for the deletion of some clauses in the PIB such as; Clause 317 (8),  (1-3)The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining. To support this, license to import any product shortfalls shall be assigned only to companies with active local refining licenses and Import volume to be allocated between participants based on their respective production in the preceding quarter.Commenting on this, the groups noted that a licensing regime for importation be included in section 174 and the conditions for licensing be open and transparent, ensuring free market competition and a level playing field for all parties to enhance market efficiencies.The groups also highlighted Clause 317 (8)(4) “Such import to be done under NNPC Limited Direct Sale/Direct Purchase (DSDP) scheme” as a provision that should be deleted as it will destroy the private businesses that currently supply the market (through importation) diesel, Aviation fuel, Kerosene, Base oil, LPG etc, adding that the job and taxation losses will be huge.Meanwhile, Clause 317 (8) (5) “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” was also recommended to be deleted because technical specification for products are better not hardwired in legislation, should be done through regulation by the Authority.“A holder of a license or permit shall not, without the prior written consent of the Authority, assign or transfer its License or Permit or any right or obligation arising from the license or permit,” on Clause 117 (1) was also recommended to be expunged as it would amount to over-regulation of the downstream. This was a provision carried forward from the upstream due to its nature and implications for national security.Other parts of Clause 117 from 2-7 were highlighted for deletion; (2)An application for assignment or transfer of a license or permit shall be made to the Authority, which may require the applicant to publish a notice of the application in the form, manner and time prescribed by regulation under this Act. (3)The Authority shall, in the determination of whether a license or permit is to be assigned or transferred, (a) follow the same procedure with appropriate modifications; (b) apply the same rules and criteria; (c) consider the same issues as if the party to whom the License or Permit is being assigned or transferred is applying for a new License; and (d) consider the representations made to it by third parties in respect of the application.On the aspect that the Authority shall, subject to subsection (3) of this section, communicate in writing, its approval or refusal of an application for assignment or transfer of a license or permit within the time prescribed by regulation under this Act. (5)Where the Authority does not approve or refuse an application and fails to communicate its decision to an applicant for the assignment or transfer of a license or permit within the prescribed time, the application shall be deemed to be approved.Where the Authority refuses the grant of an application for an assignment or a transfer of a license or permit, it shall communicate to the applicant the reason for the refusal and shall give reasonable time within which further representation may be made by the applicant or by a third party in respect of the application. (7) Where the Authority grant consent to an assignment or transfer of a license or permit, it shall notify the applicant in writing, subject to any condition it may consider appropriate.

Nigeria consumes 38.2m litres of petrol daily — DPR

After many years of opacity and difficulty in determining the country’s actual fuel consumption, the regulatory authority of the Nigerian petroleum industry, the Department of Petroleum Resources, DPR, yesterday, put national demand for Premium Motor Spirit, also known as petrol, at 38.2 million daily.

Determining Nigeria’s actual fuel consumption had over the years, been a herculean task, especially as the figure remains critical in determining the country’s revenue, as well as the amount the country is spending on fuel subsidy.

Prior to the administration of President Muhammadu Buhari, Nigeria’s fuel consumption figure had been put at between 30 million and 35 million litres. It later rose to 60 million litres per day, 55 million litres, while until today, no one actually knows the country’s daily fuel consumption.

As a result of this, the Federal Government set up a committee to determine Nigeria’s actual fuel consumption using advanced information and communication technology, as well as improved surveillance.

In its National Stock Reports released Wednesday, the DPR stated that as February 25, 2020, the cumulative stock of PMS at depots across the country was 915.772 million litres, dropping by 3.15 per cent from 945.6 million litres recorded February 24, 2020.

The DPR disclosed that the PMS stock was owned by the Petroleum Products Marketing Company, the downstream subsidiary of the Nigerian National Petroleum Corporation, NNPC; as well as major and independent oil marketers.

The DPR attributed the decline in national PMS stock levels to vessel discharges and truck out activities across the depots.

It said “As at 25th February 2020, the cumulative depot stock of PMS at the depots was  915,771,566 litres (combined PMS stock owned by PPMC, major and independent marketers) vis-à-vis  945,604,305 litres on 24th February 2020 indicating a decrease of depot PMS stock due to vessel discharges and truck out activities (Table A and B) respectively at the depots.

“Applying the estimated daily national demand of 38,200,000 (thirty-eight million two hundred thousand) litres, available depot PMS stock of 915,771,566 litres is sufficient for 24 days.”

The DPR report further stated that as at February 25th, 2020, stock levels in 40 depots in Lagos stood at 539.99 million litres; while in Calabar/Eket, 82.97 million litres of PMS were available in 11 depots across the state.

In Warri, Port Harcourt, Umuahia and Kaduna, PMS stock levels stood at 146.94 million litres, 129.19 million litres, 6.99 million litres and 9.68 million respectively.

Furthermore, the report disclosed that on February 25, 2020, as at 600hours, seven vessels discharged 61.055 million litres of PMS at depots in the Lagos Zone, bringing PMstock levels in Lagos to 537.95 million litres after daily truck out.

In its 2019 Benchmarking Exercise Report, released weekend, the Nigeria Natural Resource Charter, NNRC, confirmed the difficulty that had persisted in determining Nigeria’s actual fuel consumption and also highlighted recent efforts by the government to reverse this trend.

It said, “In addition, steps were observed to increase the monitoring of the supply and distribution of refined petroleum to have a fair assessment of the country’s consumption level. In October 2019, the government reportedly launched the automated Downstream Operations and Financial Monitoring Centre (DOFMC) through NNPC.

“According to the public affairs unit of the NNPC, DOFMC is part of a five agency operation to ‘monitor products supply and distribution across the country and check unwholesome practices with a view to authenticating the actual volume of products imported and consumed in the country.’”


DPR, operators agree to sell petrol at approved depots for N148.17

The Department of Petroleum Resources (DPR) has signed an agreement with over 27 operators in the downstream sector to check fluctuations in the pump price of Premium Motor Spirit (PMS), otherwise known as petrol.

Depot facility operators, union leaders of retail outlets and other downstream operators agreed that petrol would be sold at the stipulated ex-depot price of N148.17 per litre.

Port Harcourt Zonal Operations Controller of DPR, Bassey Nkanga, told The Guardian that the move would end an unnecessary hike in prices of petroleum products.

Retail outlets at the meeting organised by DPR in Port Harcourt, blamed the staggering prices of petrol on failure of depot operators to sell the product at a uniform price, stressing that the development forced operators to sell according to how they buy the product.

“It is time to bring all stakeholders together to operate on the same page. The Federal Government has not increased the price of petrol, and as such, anyone who contravenes the rules will be sanctioned. With the agreement to sell petrol at N148.17, no retail outlet should sell petrol above N165,” he said.

After the stakeholders signed the agreement, Nkanga said: “By this, we have agreed to sell petrol at depot price of N148.17. So, you are mandated to supply the product at approved price and if pumps dispense with 0.1 per cent difference at retail stations, we will shut down such stations.

“This time it became necessary because of speculations around the price of petroleum products. We really needed to bring ourselves together to be on the same page, because the Federal Government has not increased the price of petroleum products. 

“Marketers are sabotaging the system. So, since the Federal Government has not increased the price of petrol, nobody has the right to sell above the former price.” 

Nkanga added that depot operators should not sell above stipulated ex-depot price to marketers and retail outlet operators should not also sell beyond what they are supposed to sell to members of the public.

“Since the N148.17 has been stipulated, there will be no increase. The Federal Government has restated that it has not increased and so we expect everyone to sell at the stipulated price,” he stressed.

He also frowned on hoarding, stressing that any person or retail outlets caught hoarding the products would be dealt with accordingly.

“We talked about selling products to unlicensed facilities. We earlier sent out letters to depot operators to alert them that we will not tolerate any form of disguise in selling petroleum products to unlicensed persons,” he added.

Diesel price soars to N250/litre, businesses groan

The price of Automotive Gas Oil, also known as diesel, has risen to a high of N250 per litre, with businesses taking a beating on the back of rising energy costs.

Our correspondent observed that some filling stations in Lagos had increased the price of the product to N250 per litre, while many others sold it at between N220-N245.

Northwest Petroleum along the Oshodi-Apapa road increased the pump price of diesel to N250 per litre; AP (Ardova Plc), along Airport road, Ikeja, N248; and Oando, along Acme Road, N240.

The National Bureau of Statistics, in its AGO price report on Tuesday, said the average price paid by consumers for diesel increased by 0.22 per cent to N224.86 per litre in January 2021 from to N224.37 in December 2020.

It said states with the highest average price of diesel were Adamawa (N268.33), Zamfara (N262.78) and Kebbi (N257.50).

“States with the lowest average price of diesel were Osun (N194.60), Anambra (N195.83) and Enugu (N198.24),” the NBS added.

Crude oil price accounts for a large chunk of the final cost of petroleum products, and the deregulation of the downstream oil sector by the Federal Government means that the pump prices of the products will reflect changes in the international oil market.

The international oil benchmark, Brent crude, has risen by more than 25 per cent this year from the $51.22 per barrel at which it closed last year. It rose to $65.25 per barrel as of 6:30pm Nigerian time on Tuesday.

Diesel is mostly used by businesses to power their generators amid a lack of reliable power supply from the national grid.

The President, Association of Small Business Owners of Nigeria, Mr Femi Egbesola, lamented that the recent increase in the price of diesel was taking a heavy toll on businesses, especially Small and Medium Enterprises.

“The cost of diesel and raw material is giving us a nightmare. The price of diesel has been skyrocketing in a way that creates fear in particularly manufacturers,” he told our correspondent on Tuesday.

According to him, it is difficult for businesses to factor all the increase in diesel price in their final product prices.

Egbesola said, “That is why a lot of companies are downsizing and are making sure that they only produce products that they are so sure will sell in the market.‌

“Many companies have reduced their product lines significantly just to be able to cope. And that is not good for us because by the time this goes on, unemployment will increase. I believe government should be able to do something about this.”

He said although the downstream petroleum sector had been deregulated, there should be checks and balances.

Egbesola said many small businesses’ savings had been eroded already because ‘we keep spending our savings to make sure we don’t close shop’.

He said, “If things continue this way, there is no way we are not going to close shop. We are still struggling with the recent increase in electricity tariff.

“Many small businesses still depend so much on diesel generators because there is no alternative power supply. It is only the big players that have the facilities to use gas. And we cannot use solar installation because it is very expensive.”

Nigeria, Africa’s largest oil producer, relies largely on importation for petrol and other refined products as its refineries have remained in a state of disrepair for many years.

Copyright PUNCH.

Oil surges near $67 a barrel as traders say price could top $80

Brent Oil jumped towards $67 a barrel Tuesday with investment banks and traders predicting the market will tighten further and push prices higher. Futures in New York jumped 1.6% on Tuesday after climbing more than 4% in the previous session. The market is heading toward what could be the tightest quarter since at least 2000

Source: Business Day


The Nigerian National Petroleum Corporation (NNPC) has assured Nigerians that there is no plan to increase the price of Premium Motor Spirit (PMS) otherwise known as petrol in the month of February 2021.

This comes after the reported rumour of plans to increase the price of petrol due to the continuous rise in the price of crude oil in the international market and the reported hoarding of the product by some depot owners and marketers.

NNPC Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru who reacted to speculation of petrol selling above the official N162 per litre, said that there was no imminent upward review. 

Obateru also assured that the corporation had enough stockpile of petrol to keep the nation well supplied for about 40 days. 

He urged petroleum products marketers not to engage in the hoarding of PMS in order not to create artificial scarcity and unnecessary hardship for Nigerians.

He said;  

“NNPC has not increased its ex-depot price. I am certain that NNPC is not likely to increase its ex-depot price in February.

“We have sufficiency for almost forty something days. If people are hoarding or increasing their prices that one is for the DPR to look into.”


Petrol subsidy may hit N11.2bn per week

The subsidy on Premium Motor Spirit, popularly known as petrol, may have gulped at least N11.20bn in one week as the rise in global oil prices pushed up the landing cost of the product.

On February 5, when oil price neared $60 per barrel, the expected open market price of petrol rose to over N200 per litre, based on the petrol pricing template of the Petroleum Products Pricing Regulatory Agency.

The product is currently being sold at between N160 and N165 per litre at many filling stations in Lagos.

Using an expected open market price of N190 per litre of petrol and an average current pump price of N162 per litre indicates a subsidy of N28 per litre.

With a daily petrol consumption of about 57 million litres and a subsidy of N28 per litre, it means subsidy gulped N1.60bn in a day and N11.20bn in a week (February 5 to 12).

The PUNCH had reported last week that the landing cost of petrol rose to N179.67 per litre on February 5 from N158.53 per litre on January 7, with the expected open market price (pump price) of the product increasing to N202.67 per litre from N181.53 per litre.

Crude oil price accounts for a large chunk of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.

The rising price of crude oil pushed the cost of petrol quoted on Platts to $543.25 per metric tonne (N157.99 per litre, using N390/$1) last Friday from $480.25 per MT (N139.67 per litre) on January 7.

The international oil benchmark, Brent crude, extended its rally on Monday, rising by $0.88 to $63.31 per barrel as of 7:10pm Nigerian time.

The Nigerian National Petroleum Corporation, which  has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, said last week that Nigerians should prepare for the pain associated with the increase in crude oil price.

According to him, as desirable as the increase in oil price is, it has serious consequences as well on petroleum product prices.

“So we want to take the pleasure and we should as a country be ready to take the pain. Today, the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy. So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it.”

“As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices.”

The NNPC said in its latest monthly report that to ensure continuous increased PMS supply and effective distribution across the country, a total of 1.72 billion litres of PMS, translating to 57.44 million litres per day were supplied in November.

The corporation said it had continued to diligently monitor the daily stock of PMS to achieve smooth distribution of petroleum products and zero fuel queue across the nation.

Source: Punch

Bayelsa Oil, Gas Park Ready Q4 2022, Says Wabote

The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, has disclosed that the Nigerian Oil and Gas Park in Emeyal 1, Bayelsa State, would be completed in the fourth quarter of 2022.

Speaking after inspecting the construction work at the project site alongside senior management of the board, Wabote said his assessment visit was a prelude to the planned tour by the Minister of State for Petroleum Resources, Chief Timipre Sylva, to the board’s major projects.

A statement from the NCDMB stressed that the oil and gas park projects at Emeyal 1 and Odukpani in Cross River State and the Composite Gas Cylinder Manufacturing facility at Polaku are some of the projects to be visited.

Wabote expressed delight over the quality and speed of work by the wholly Nigerian contractors, noting that their work compared favourably with similar jobs across Nigeria and was evidence that NCDMB was always acting in accordance with its guidelines on patronage of local service companies.

The park is expected to create a low-cost manufacturing hub that will produce equipment components and spare parts to be utilised in the nation’s oil and gas industry when completed.

The board stated that the project started with a ground-breaking ceremony on April 27, 2018, and has now reached about 68 percent completion, with four major structures nearly completed, while foundation work was starting on some buildings and parts of the project.

“We did the ground-breaking ceremony in 2018 and we were practically inside water; but today, we are seeing structures coming up. We still have a long way to go because most of the buildings are getting to the finishing stages while some are just starting. We believe that we will complete this project by Q4, 2022,” the NCDMB boss said.

Explaining the benefit of the park scheme to the nation’s economy, Wabote hinted that the facility would stimulate the manufacturing of oil and gas components in-country and reverse the current trend whereby the sector depended on importation for most of its finished products.

He added that the park would also save the much-needed foreign exchange for the nation and create jobs for the Nigerian people.

“It will also enhance our capacity and bring about technological innovations because most of those manufacturing will be done here. For the community, it will create a lot of jobs and there will be a spin-off effect to other economic activities. The benefits are enormous,” he noted.

He also assured that shortage of electricity would not affect companies that would set up in the park.

“We have been able to conquer the challenge of electricity at this site. We have built a 10megawatts gas plant to guaranty power to the site,” he explained.

Wabote confirmed that Shell Petroleum Development Company (SPDC) was supporting the oil and gas project through a Capacity Development Initiative (CDI).

Shell’s commitment to the project, he stated, included the construction of effluent treatment plant, fire station and acquisition of two fire trucks and to construct a water treatment plant, sewage systems and piping network for water.

Read the original article on This Day.

Major Marketers Call for Initiative to Mitigate Effect of Petrol Price Hike

Marketers of petroleum products under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) have called for a joint action of stakeholders in the Nigeria economy to find ways to mitigate adverse effects of the imminent increase in the price of petrol price.

The marketers’ cartel also canvassed for the replication of the current measure to cut cost of operation in the nation’s oil and gas industry to the entire spectrum of the economy especially governance.

The Chairman of MOMAN and Managing Director of 11Plc, Mr. Tunji Oyebanji, advanced the positions of the association in a statement he presented at a virtual press briefing hosted in Lagos, with the title, “After Deregulation, What Next”.

He said the removal of petrol subsidy and price control would no doubt lead to challenges for Nigerians, adding that debate among stakeholders should now move from the deregulation of downstream sector to fashioning out solutions to the hardship that would be faced by Nigerians.

He said with a fully deregulated downstream industry, the natural fear and anticipation of Nigerians was the increase in the price of transportation, food items and the attendant economic hardships.

According to Oyebanji, solutions to these challenges can only emanate from a collective resolve by all stakeholders to face up to these challenges together.

“We must as a nation debate and share pragmatic and realistic initiatives to mitigate the impact of a pump price increase which could follow a fully deregulated downstream,” he added.

He explained: “MOMAN is calling for a national discourse among all stakeholders including government, labour, civil society organisations, the organised private sector and operators, not on the merits or demerits of petrol subsidy removal, but on the initiatives that can be taken to ease the impact of the subsidy removal on the most vulnerable in our society.

“MOMAN remains committed to the sustainability and institutionalisation of a viable downstream petroleum industry for the social and economic growth of our Country, Nigeria”.

Oyebanji said the association stands with Nigeria and Nigerians through this difficult time and supports the federal government’s promise to pass the Petroleum Industry Bill (PIB) this year and fully deregulate the petroleum downstream sector.

He pointed out that the benefit of a liberalised downstream was the most visible means of growing the economy in the medium to long term.

He said Nigeria could become the refining hub of West and Central Africa and eventually the whole of Africa if it sticks to the path of investing in new refineries, adopting a cost optimisation initiative, building an environment that promotes competition and creates a sustainable petroleum sector.

“These actions would lead to increased employment, reduced poverty and reduced social inequity. We must take advantage of the opportunities brought by the African Continental Free Trade Area agreement (AfCFTA) and fully benefit from our barrels of crude, getting the maximum value it can bring Nigeria,” he noted.

Oyebanji, however, harped on the need for participants in the fuel supply chain, both operators and regulators demonstrate cost optimisation in every practical and public way possible.

He canvassed for the replication of the current measure to cut cost of operation in the nation’s oil and gas industry to the entire spectrum of the economy especially governance.

He added: “In line with the recently launched Nigerian Upstream Cost Optimisation Programme (NUCOP), efforts must be made to reduce costs of production, administration and governance throughout the petroleum value chain in the Nigerian petroleum sector, (particularly) the downstream, in order to promote efficiency and competitiveness within the industry and ensure value creation for all consumers.

“However, beyond this initiative being limited to the petroleum industry, we believe it is a notion that should be applied to the Nigerian landscape, particularly in the area of governance.

“As promised by the government, a visible and measured reduction in the cost of governance throughout the polity would bring about savings which can be directed toward improving the livelihood of the average Nigerian.

“This cost optimisation initiative would demonstrate to Nigerians the good faith of the decision makers in both the public and private sectors.”

Source: ThisDayLive