Natural Oil, Gas Suppliers Seek Five-month Licencing Window for Diesel Importation

*Members to meet Buhari on forex scarcity, tax relief, others*PMS consumption: House demands details of seized, auctioned products from Customs

Emmanuel Addeh and Udora Orizu

The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), a body of organised suppliers, stakeholders and practitioners in the nation’s oil and gas sector, yesterday called on the federal government to allow its members a five-month window to import diesel to stabilise supply and prices.

This was just as the House of Representatives’ Ad-hoc Committee investigating the ‘actual daily consumption of petrol in Nigeria, yesterday demanded full details of all the petroleum products seized and auctioned by the Nigerian Customs Service (NCS).

In a communiqué read by the National President of NOGASA, Mr. Bennett Korie, after the 2nd annual National Executive Council (NEC) and Stakeholders meeting in Abuja, NOGASA said it was planning to meet President Muhammadu Buhari to table its demands soon.

Manufacturers and consumers alike have been bearing the brunt of the diesel price increases from an average of N250 per litre late last year to over N800 in some parts of Nigeria currently.

The challenge was worsened by the Russia-Ukraine war, the current global energy crisis, plus local structural defects and deficiencies in the Nigerian oil sector, wherein all the fuels consumed in-country are imported.

But the body stated that the only temporary measure to tackle the rising price of diesel which has affected the economy negatively was for the federal government to give licences to its members to import the product between now and December to cool prices.
In addition, the group urged the federal government to allow them access to the official foreign exchange window, lamenting that part of the current challenges is that its members source dollars from the black market.

The association, a network of suppliers, marketers, distributors and other related enterprises in the sector’s business environment, further called on the National Assembly to enact a law that will provide for an energy bank  like in some other sectors.
“We resolved that the association should pay a courtesy visit to the President of the Federal Republic of Nigeria (FRN) to outline some of the issues below and the way forward.

“The association urges the National Assembly to review the policy of taxation, that is, Value Added Tax (VAT) as it affects petroleum product supply and distribution chain.

“The association urges the National Assembly and relevant sectors to enact a bill for the establishment of an energy bank for easy transaction in petroleum products and oil and gas sector,” the group said.

The association also urged the federal government to fix the four refineries in Nigeria with a view to reducing the dependency on importation of refined products to ease the high cost of petroleum products in the country.

Furthermore, NOGASA resolved that through its business arm, the organisation should be given all necessary assistance by the Central Bank of Nigeria (CBN) to import diesel and other products into the country at competitive prices.

“The association appeals to the Federal Inland Revenue Service (FIRS) to ensure that suppliers are given a tax relief to avert multiple taxation and refund where necessary. It appeals to FIRS to use its discretion to apply relief on petroleum product,” it stated.

It urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to approve NOGASA as the umbrella body of all oil and gas associations in Nigeria, and thereby collaborating in licencing petroleum products in Nigeria.

NOGASA also called on the federal government to encourage the establishment of modular and private refineries like the Dangote and Watersmith facilities.
President of the group, Korie, noted that given the importance of the upcoming Dangote refinery to the nation’s economy, the government and banks should find a way to raise funds to complete the Dangote project.

“Dangote needs money to complete that refinery project and we are pleading with the government and the banks to lend him money,” Korie added.
With rising recurrent costs, the group stated that it would be left with no option than to begin laying off workers, insisting that as of now, some depot owners spend as much as N80 million every month as diesel costs to keep their operations going.

While acknowledging the recent hike in the bridging fund paid to fuel transporters, Korie explained that other administrative charges were killing the businesses of its members.

Meanwhile, the House of Representatives’ Ad-hoc Committee investigating the ‘actual daily consumption of Premium Motor Spirit (PMS) in Nigeria, has demanded the full details of all the petroleum products seized and auctioned by the Nigerian Customs Service (NCS). The lawmakers also demanded the value of the products and the auctioneers.

Issuing a 7-day ultimatum, the Chairman of the Committee, Hon. Abdulkadir Abdullahi directed the Clerk of the Ad-hoc Committee to write the NCS Comptroller-General, Col. Hameed Ali on the request.

He said: “Give us the full details of the products seized, auctioned, the auctioneers, the volume, the value and any other related matters to this application. As at February, the actual landing cost they are putting it around four hundred and something thereabout.

“The market in the international market affects the subsidy, the higher the crude oil in the international market the higher the subsidy, but then, let’s have the volume and then if you even go further, if you want to impress us, you can even go further and give us the prevailing crude oil price.”

Earlier, Ali, who was represented Deputy Comptroller General in charge of Enforcement, Investigation and Inspection, Mr. Etim Edorhe explained that the Customs always obtain court injunction before auctioning all the seized items except for petrol which he said was highly inflammable.

He further disclosed that total crude oil exported from Nigeria between January 2015 and June 2022 stood at 876,801,931.515 (1,296 vessels) while total PMS imported into the country was 2,380,814,974.418 Metric Tonnes / 3,703 vessels (2,380,814,974,418 litres) for the period under review.

He said: “It is very easy for people to easily ascribe whatever comes in into the country as being taken out by way of smuggling, it may not be in what I have given to you but I just decided to take records of petroleum products that we seized, that were attempted to moved out in from January to December 2021 across the country. Because I saw the direction this discussion is going, issue of smuggling or no smuggling, so Customs is not folding its hands, we are doing our work, the borders are there. We have the joint border patrol in place.

“Yes, we are daily intercepting these items as they attempt to move out. Some of them in tankers, some of them in drums, then in jerry-cans and some of these smugglers have this ingenuity of having petroleum products in polymer bags that you would not know. But daily we seize them. We are always ahead of whatever method they adopt. I just told you, I took record of what happened in 2021 which I am going to give to you. In 2021, a total of 2,278,297 litres and with a duty paid value to N501,514,178,692.50.

He further said, “When you make arrest of inflammable products, you don’t keep them because of the possibility of fire around the premises. So, such items are auctioned and the money paid into the federation account. I’m going to give you that, I will get back with the figure on 2015 to 2021. I will give to you for 2021 you asked a question also about ascertaining the products. Before they are given out must be condemned by a court of competent jurisdiction. That is normally done. No, no, no, they are inflammable, you cannot keep inflammable”.

Reacting, a member of the Committee, Hon. Uzoma Nkem-Abonta said details of all the products seized should be made available to the committee.
“That is what I want to point out, Mr. Chairman, we also need the records of those auctions, the Auctioneers… so we can satisfy the public that these things were properly managed. I want you to rule on that, the product seized, the auctions, the payments and the auctioneers, and those who bought (the auctioned petroleum products), should be made them available to us.

“We don’t want to leave any stone unturned. So that we can look at these things critically and positively. He came with the list of the seized products but he didn’t give us orderly, so I ask that he gives it to us. So we can also cross-check. He may wish to tender that”, Abonta said.