The Petroleum and Natural Gas Senior Staff Association of Nigeria has called on the Federal Government to raise its stake in the Dangote Petroleum Refinery from 7% to at least 45%.
They argue that this increase would enhance energy security and assurance for citizens, ensuring more stable access to vital resources.
This was disclosed by the PENGASSAN President, Festus Osifo during the presentation of its communique and recommendations from the recent edition of the association’s Energy and Labour Summit in Lagos on Tuesday, according to The Punch.
He emphasized that a higher stake in the refinery would strengthen energy security, which is crucial for any nation’s survival, including Nigeria. Citizens are demanding energy that is affordable, accessible, and available, highlighting the importance of reliable energy resources for national stability and growth.
Osifo also suggested that the government collaborate with private sector players to maintain existing petroleum product storage facilities across the six geopolitical zones. This partnership would help ensure effective management and distribution of petroleum products throughout the country.
“When operational, petroleum products will be stored there and only made available when there is a shortage in supply. This will help in eliminating the bad roads and severe erosion-imposed perennial shortages that often lead to queues at petrol stations across the country,” he said.
Osifo emphasised the expansion of pipelines that could be used in the delivery of refined petroleum products across the length and breadth of the country to reduce the pressure on roads by trucks carrying these products
He pointed out that to achieve energy security, energy must be affordable, hence in ensuring affordability, the Government must do all it can to stabilise the exchange rate as the continuous slide of the Naira will greatly hamper the affordability of energy in Nigeria.
To boost local production of petroleum products, he urged the federal government to intensify efforts to operationalize the nation’s four refineries. This would enhance self-sufficiency and reduce reliance on imports.
He emphasized that once the refineries are operational, the government should divest the majority of its shareholding, retaining no more than 49%. This approach would allow core investors to acquire the 51% stake, fostering efficiency and expertise in refinery operations.
He regretted that the NNPC could only buy a 7.2 per cent stake in the $20bn refinery.
“Dangote is open to conversations on selling the stake. He was ready to sell 20 per cent earlier and we were also pushing for the government through NNPC to get the 20 per cent, but unfortunately they could only afford seven per cent, “ he said.
Osifo pointed out that the devaluation of the naira is a key reason for the rising cost of PMS, highlighting that no government should allow its currency to float above 100%. This situation significantly impacts affordability for Nigerians.
“If, for example, our exchange rate was at N450 to a dollar, PMS would be selling for around N320 or N350 per litre. So, the main issue wasn’t the removal of subsidies. The main issue was that devaluation. The real problem is devaluation,” he stated.
The association urged the government to develop and strengthen Nigeria’s oil and gas value chain, aiming for a more efficient and reliable downstream distribution system. This would enhance overall effectiveness in the sector and benefit consumers.
PENGASSAN emphasized that without a robust distribution system, Nigeria will continue to experience recurring fuel shortages. They criticized the reliance on a truck-based distribution system, which is vulnerable to disruptions from bad roads, flooding, and inadequate logistics, making it insufficient to meet the demands of citizens.
The association mentioned that the recent trend of divestment by the International Oil Companies necessitated a strategic shift to accommodate local empowerment, innovation and harnessing potential and latent talents, adding that the divestment trend was driven by the combination of global energy transition goals, financial prudence, portfolio rationalization and evolving regulatory environment.
PENGASSAN cautioned that divestments could pose both risks and opportunities for Nigeria. They highlighted concerns about potential reductions in foreign direct investment, loss of technical expertise, and a possible decline in production levels, emphasizing the need for careful management of these transitions.
