FENRAD advocates licensing of local and artisanal refineries – The News Chronicle

The Foundation for Environmental Rights, Advocacy and Development (FENRAD), an organisation working for democracy and ecological rights, has condemned the current pricing system of the oil industry which is a scourge on all Nigerians, especially the poorest.

Currently, in some parts of the country, fuel costs N1,000 or more, with transportation charges increasing sporadically.

Nigerians are already complaining about the hardships caused by the increase in petrol prices and they are facing numerous protests in the near future.

According to the Executive Director of the Abia-based group, Comrade Nelson Nnanna Nwafor, FENRAD, as a keen observer of the industry, laments that the current government is held by people whose understanding of the issue begs the question of whether competence is still the yardstick for choosing who gets what and in what manner.

Noting the confusion prevailing across the oil industry, Nwafor expressed regret over the numerous contradictory policy statements that show no coherence.

“First, the federal government withdrew subsidies on petrol, which caused hardship for all Nigerians. And when it became clear that the federal government was still subsidizing the NNPC through shortfalls, it continued to withhold full details, even after Dangote, a business tycoon, built a 650,000-barrel-a-day refinery, the largest in Africa.

“The government and its agencies seemed to be working against each other.

“First, the government, after Dangote complained that certain difficulties were preventing him from doing business, set up a committee to work out the terms for selling Dangote’s crude oil in naira.

“To date, the committee chaired by the Honourable Minister of Finance, Wale Edun, has not published a single report on how this objective can be achieved. Instead, there have been reports that the Federal Executive Council, FEC, will determine the price of the product in an open market economy like ours. Later, Dangote said that the NNPC will determine the price of its product. But today, the NNPC is saying that the price of the product (from Dangote) will be determined by market forces and foreign currencies. So what did the order to sell Dnagote crude oil in naira mean if market forces and foreign currencies are to determine the price of Dangote product?” he asked.

The foundation noted that Dangote’s investment is located in a free trade zone where Nigerian tax and labor laws do not apply, meaning any purchase made there and transferred to another part of the country is treated as an import attracting fees such as Form M and bill of lading that independent sellers cannot afford, given that they would cover the difference in landing costs.

He noted that without government intervention, no private seller can directly purchase Dangote product.

He said; “NNPC owes its suppliers $6 billion. Oil prices have now fallen below the Federal Government’s budget ceiling, initially $77.96 per barrel, to $70, meaning the revenue shortfall has already crept into the 2024 budget. With the Federal Government now unable to subsidise Dangote, the chances of suppliers buying from it are slim.”

Nwafor appealed to the federal government to allow local players to enter the mainstream local market as this problem cannot last forever.

He also called on the Nigerian government to begin moving away from “Benzilism” towards clean, renewable and smart agriculture.

“The world is not waiting for us, the Foundation says. Let’s expand the landscape of the oil industry by allowing a content monitoring board to license qualified local refiners to help us escape the impending energy crisis in a country whose economic lifeblood is one thing – gasoline.

“The oil sector is the exclusive domain of the federal government, its recovery requires national planning. Let the promised hope begin to flow.” stated the head of FENRAD.

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