WIEN Writes NASS, Calls For More Transparency In Oil And Gas Sector

The Women in Energy Network (WIEN) has written to the National Assembly, calling for greater transparency, better efficiency, and a level playing field in the oil and gas industry. 

The Network in its Position Paper on the Downstream Oil Sector which was addressed to the Chairman,

Senate Joint Committee on Petroleum Resources stated that improved governance and transparency would strengthen public and investor confidence in the sector, saying for instance, presently, the indices used for computing the guiding pump prices petroleum by the PPPRA are not known to anyone outside the agency. 

The Position Paper which was signed by President of the Network, Mrs Funmi Ogbue expressed concern that since the discovery of crude oil in Nigeria, several issues have plagued the industry from dwindling oil and foreign exchange reserves, lack of clear or consistent fiscal strategy, lack of critical investment into the sector, exacting rules on tax jurisdiction, among others. 

“WIEN joins other industry stakeholders to advocate for an open, transparent, and free market environment with clear rules and regulations guiding competition, consumer protection, health, safety, quality, and the protection of the environment,” the letter stated.

The WIEN said coronavirus pandemic clearly brought to light a reality that has been quite often ignored, that developments in the oil and gas sector impact on all aspects of the Nigerian economy and all groups in the society

The Network said it recognizes that the Federal Government and its relevant Ministries, Departments, and Agencies (MDAs) have recently taken some laudable steps towards repositioning the downstream sector for greater efficiency. 

However, WIEN urged the National Assembly to work with the Executive towards the full deregulation of the Downstream Sector

It stated that there is an urgent need for necessary changes to existing laws and legislation in the oil and gas sector

Some of the existing laws include section 6(1) of the Petroleum Act 1969, as well as Section 7(a) and (d) of the Petroleum Products Pricing Regulatory Agency (PPPRA) Act 2003.

The Network said it is worrisome that despite the Nigeria’s significant oil wealth and production capacity, the country imports around 90% of the refined Premium Motor Spirit (PMS) that is sold to consumers at petrol stations around the country, as it does not have refineries capable of meeting anything but a minute portion of Nigeria’s domestic demand. 

The Network stated that, “It is extremely rare for major oil producers to import PMS in such quantities. Nigeria is one of the only members of OPEC (besides the Republic of Congo and Equatorial Guinea) that imports any such products at all. Nigeria’s four refineries have been poorly maintained for decades and operate at a fraction of their actual capacity. The refineries have originally installed capacity to refine 445,000 barrels per day but are currently running at about 2% of that. Three of the four refineries are currently shut down and the fourth is running at 8.7% of its capacity. It is believed that it would be more efficient to build new refineries than to fix the existing ones.Taking 2007 as the year the privatization of the refineries was reversed, the losses borne by NNPC refineries alone between then and now exceed the $9 billion estimated cost of the Dangote refinery in the Lekki Free Trade Zone. 

“We ask that the Federal Government should not spend any additional funds on repairing or maintaining the refineries but should undertake road shows, investment drives, and other necessary actions to facilitate the outsourced management, privatization or outright sale of the existing refineries while seeking to attract or promote investments in new refineries (such as the upcoming Dangote Refinery). 

“The privatization of Eleme Petrochemical and the attendant turnaround shows that the refineries are better managed by the private sector. In addition, government should explore the encouragement of modular refineries as a means of boosting local refining capacity.

“Particularly, government should pursue a deliberate policy of encouraging women participation in local refining by mandating 20-30% women participation in the shareholding structure of modular refineries”

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