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‘PIB Restricts Petroleum Products Import To Refinery Owners’

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The Senate’s decision to award just three per cent to oil-bearing communities may not be the only controversial clause in the Petroleum Industry Bill (PIB) as a closer check has shown that the Upper Chamber also provided that petroleum products can only be imported by refinery owners in Nigeria.
While the bill expectedly removed price controls on petroleum products in Section 205, the Senate version of the bill has a clause that constrains market competition by restricting the importation of products to only players with local refining capacity.
This clearly counters the provision of 205(1), “Subject to the provisions of this Section, from the effective date, wholesale and retail prices of petroleum products shall be based on unrestricted free-market pricing conditions.”
The inserted Section 317 (8) in the Senate bill states, “(1) The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining.
“(2) To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences.
“(3) Import volume to be allocated between participants based on their respective production in the preceding quarter.
“(4) Such import to be done under NNPC Limited Direct Sale/Direct Purchase (DSDP) scheme.
“(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”.
The decision by the Senate to impose restrictions on what is supposed to be a deregulated downstream sector of the petroleum industry raised eyebrows among experts who called for the provisions to be expunged.
When contacted, yesterday, energy expert and former President of the Society of Petroleum Engineers (Nigerian Council), Engr. Joseph Nwakwue, expressed concern that the provisions will create a duopoly in a price deregulated environment thereby destroying the Nigerian downstream industry as we know it today.
According to him, “It restricts importation of all petroleum products, including PMS, diesel, aviation fuel, lubricants, and base oil – products which are already deregulated, to only players with local refining capacity.
“In the near term, only the NNPC and Dangote will have domestic refining capacity for PMS for instance, so, they will be the only importers. This takes the industry back and could not have been the intention of the bill.
“Moving from a state-owned monopoly in a price regulated market to a duopoly in a price deregulated market is not what Nigeria needs now as it takes the industry backward and exposes Nigerians to exploitation and further hardship. This, in my humble view, is not reformatory”.
He pointed out that “rather than seek to protect refiners, we should rather seek to protect the consumers by liberalizing and expanding petroleum product supply sources. That is the only way prices will be ‘market-determined’ and consumers made to pay fair value for the products they buy.
“The viability of local refining is not determined or enhanced by locking out competition, it is rather achieved through price deregulation which has been done in Section 205.
“This clause gives statutory unfair advantage to private players rather than through market competition.
“Indeed, the law and the authorities have an obligation to protect the market (other players including Nigerian entrepreneurs) and the consumers rather than to encourage monopoly/duopoly by locking out competition.
“This clause does not create a level playing field for all players in the sector, and can, indeed, destroy existing Nigerian businesses that engage in importation of other petroleum products like diesel, LPG, Aviation fuel etc. with attendant loss of jobs and more economic misery for Nigeria and Nigerians”, he added.
Nwankwue pointed out that governments all over the world “do not create and encourage monopolies or duopolies and that is why anti-trust laws are enacted and enforced to protect industries and consumers.
“Nigeria should not be doing the reverse. A case can always be made about protectionist policies for nascent or pioneer industries, but this is not the case with a long-established, once-thriving Nigerian downstream.
“This clause needs to be expunged from the PIB. The downstream regulator – Authority should be left to develop regulations that are fair, inclusive and transparent for petroleum product importation that ensures open and diverse market supply and hence competition, only then would the objectives of the bill be achieved.
“It is worth repeating that as price control is being removed, supply must be competitive, inclusive, transparent and seen to encourage efficiency. Then, and only then will Nigerians and Nigerian win”, he added.
Also in his remarks, energy expert, Ademola Adigun, said the provision was clearly put in place to favour certain players in the industry.
According to him, “It is a clause designed to give an advantage to Dangote. It’s not a fair clause based on current realities and is capable of creating an oligopoly in the market.
“It’s very unfair and seems inserted to please a certain group”, he added.
Also, a document detailing industry players’ position on the PIB stated this about the section, “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. This will enhance market efficiencies”.
The Senate and the House of Representatives had, last Thursday, set-up conference committees to harmonise both versions of the PIB.
The committees are expected to meet, today.
The harmonized version is also expected to be passed by both chambers before the National Assembly proceeds on its annual break on Thursday.

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FG Targets Production Of Locally Made Vehicles By Dec

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The Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite, has affirmed that Nigeria now has the capacity and materials to manufacture Made-In-Nigeria cars for local use and export.
With the enabling environment being provided by the government, she said manufacturers should be held responsible if the cars are not rolling out by December 2024.
Currently, Nigeria produces less than 10 per cent of the vehicles used in the country.
Last year, Nigeria’s vehicle assembling industry, estimated to be worth around N302billion, tanked to a new low due to increasing production costs and weakened demand for locally assembled automobiles.
According to the Manufacturers CEOs Confidence Index, activities of motor vehicles and miscellaneous assembly deteriorated further below the benchmark (50 points) from 48.6 to 46.7 points.
But speaking at the Automotive Component Manufacturers meeting in Abuja, she noted that the automobile industry is faced with both challenges and opportunities.
A statement issued last Friday by the Director of Information and Public Relations, Adebayo Thomas, said, “In a significant move aimed at fostering sustainable growth and development in Nigeria’s automobile industry, the Federal Government has issued a clarion call to all stakeholders, including manufacturers, dealers, regulatory bodies, and other players in the automobile ecosystem.
“The call comes as part of a broader strategy to enhance the sector’s contribution to the nation’s economy.”
Encouraging the stakeholders to key into the Nigerian Automotive Development Policy, the Minister said, “As far as we are concerned, the auto industry is now set to go.
“We are counting on all stakeholders to make that happen. If we do not produce made-in-Nigeria cars before the end of this year (December), it will be your fault, because I am sitting down here giving you all the assurances that this administration has created the enabling environment to make sure that the auto policy kicks off.”
Anite emphasised the need for collaboration among manufacturers, dealers, regulatory bodies, and other players in the automobile ecosystem, saying by working together, they can address challenges, streamline processes, and drive innovation.
She also urged stakeholders to maintain high-quality standards across the board, including vehicle manufacturing, safety features, emissions control, and after-sales services.
Stringent adherence to quality, she said, will boost consumer confidence and attract investment.
The minister assured all that the government would continue to encourage increased investment in research and development, adding that, innovations in electric vehicles, fuel efficiency, and alternative energy sources are critical for long-term sustainability.
On local content, she also emphasised the importance of promoting local content by sourcing materials and components locally.
By doing this, she said, the sector can create jobs, reduce import dependency, and contribute to economic diversification
In his introductory comments, the ministry’s Permanent Secretary, Nura Rimi, emphasised the significance of team action and shared vision as outlined in the Nigerian Automotive Development Policy.
He also urged stakeholders that the country “will overcome obstacles and unleash the full potential of Nigeria’s automotive component sector.”
He encouraged NADDC and other stakeholders to use the chance to form alliances, explore new areas of collaboration, and devise ways to catapult the automotive components manufacturing industry to new heights of success.
The statement added, “The government’s charge underscores the pivotal role stakeholders play in shaping its trajectory. Their commitment to sustainable practices will drive Nigeria’s automotive sector towards a brighter and more prosperous future.
“Environmental Responsibility: Stakeholders are reminded of their environmental responsibilities. Sustainable practices, recycling, and eco-friendly manufacturing processes are essential for a greener future.”

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Waive Tax On Electronic Imports, Women Engineers Appeal To Tinubu

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The Association of Professional Women Engineers of Nigeria (APWEN), Lagos Chapter, has called on President Bola Tinubu to exempt the importation of electronic components from taxation for inventive engineers.
Chairman of APWEN, Ms Atinuke Owolabi, said this a in statement yesterday in Lagos, in commenration of the 2024 World Creativity and Innovation Day, with the theme: “Step Out and Innovate”.
The Tide source reports that World Creativity and Innovation Day is a global UN Day, celebrated on April 21, to raise awareness about the importance of creativity and innovation in problem solving.
This is with respect to advancing the United Nations’ sustainable development goals, also known as the global goal.
Owolabi explained that such a measure would significantly enhance technological progress, support local innovators, and elevate Nigeria as a leading hub for innovation globally.
She stated that in a world marked by dynamic challenges and unprecedented opportunities, creativity and innovation stand as the driving forces behind progress and transformation.
According to her, women engineers recognise the critical role that innovation plays in shaping our societies and driving sustainable development.
”On this occasion, we affirm our commitment to fostering a culture of creativity and innovation within our organisation and the broader engineering community.
”Together, let us step out, innovate, and inspire the next generation of women engineers to reach even greater heights of achievement and impact.
”We believe that by stepping out of our comfort zones and embracing new ideas, technologies, and approaches, we can unlock innovative solutions to the complex challenges facing our world today,” she said.
According to her, the theme: ‘step out and innovate’, serves as a call to action for women engineers everywhere to break barriers, challenge conventions.
She noted that it would also pioneer groundbreaking solutions that would propel them toward a brighter and more sustainable future.
Owolabi disclosed that in celebration of the World Creativity Day, APWEN Lagos had inaugurated an artificial intelligence club tailored for female engineering students and young engineers.
She said that the proactive initiative aimed to inspire and equip young engineers with cutting-edge technological insights.
Th chairman said, “Additionally, we already have a 200-capacity hall to set up a resource, technology, and innovation hub to empower women and girls in engineering.
”This endeavour serves as a catalyst for encouraging aspiring female engineers to embrace innovation and stay abreast of emerging trends in the field.
”APWEN Lagos stands united in its dedication to promoting diversity, inclusivity, and excellence in engineering.
“We encourage all female engineers to seize this opportunity to unleash their creativity, explore new frontiers, and make an indelible mark on the world.”

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Pan-Igbo Group Hails Dangote Group For Reducing Diesel Price

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A pan-Igbo group, Ndigbo Unity Forum (NUF), has commended the Chairman of the Dangote Group, Alhaji Aliko Dangote, and his management for reducing the price of diesel from N1,600 to N,1000 per litre.
The Tide’s source reports that diesel is the major fuel used by heavy duty vehicles and generating sets to transport goods as well as run industries across the country.
The President of NUF, Mr Augustine Chukwudum, told The Tide’s source in Enugu, yesterday, that Dangote’s timely response to suffering masses of Nigerians, going through hell to get a meal a day, “is highly commendable”.
According to Chukwudum, Nigerians need to appreciate the patriotism of Dangote since what he has done will go a long way in reducing prices of goods, especially food stuff which has gone out of the reach of the poor.
He called on Nigerians, who wish and pray always for the betterment of the country, to appreciate and thank God for answering their prayer through Dangote’s move.
“It is clear that if Dangote Refinery starts fully and gets all the crude oil needed from Nigeria, the prices of petrol, kerosene and diesel will further reduce.
“We commend President Bola Tinubu for being a listening President and supporting the Dangote Group on our crude oil needs.
“We appeal to Tinubu to encourage Dangote by providing the company with crude oil at a reduced rate as we have been demanding,” he said.
Chukwudum said that this move and subsequent further reduction, would bring industries in comatose back to life, jobs created for unemployed youths and reduction in crime as well.
“We call on governors of oil-producing Anambra, Imo and Abia States to bring investors, who shall build refineries in each of the states to refine thousands of barrels of crude in commercial quantities,” he said.

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