A Review of the Nigerian Energy Industry

Speaker says it’s “illegal” to refine Nigeria’s oil abroad

Speaker of the House of Representatives, Yakubu Dogara.
Speaker of the House of Representatives, Yakubu Dogara.

*Lists hindrances to subsidy removal

Oscarline Onwuemenyi

14 July 2015, Sweetcrude, ABUJA – Speaker of the House of Representatives, Yakubu Dogara, has said it was illegal for the crude oil produced on the shores of Nigeria to be refined outside the country.

The speaker, who stated this while addressing National Executive of Independent Petroleum Marketers Association of Nigeria, IPMAN, led by its President, Chinedu Okoronkwo, expressed regrets over the failure of past administration to encourage domestic refining of the nation’s crude oil.

He said that singular act by the previous administration could make the country a laughing stock among the comity of nations.
According to him, “I don’t know if there is any country that produces the kind of oil that is produced in Nigeria that refines outside its products own shores.

“For me, it is kind of illegal. This is most inexcusable because we have turned this nation into a laughing stock.”
Dogara decried the perennial fuel scarcity in the country, saying the problem would have been mild were the country refining crude for domestic consumption.

He said, “It is inexcusable that we cannot refine our crude in Nigeria for own consumption.
“We need your expertise (IPMAN) to deal with this national shame.

“Why is it that we can’t refine this oil here? Why is it that in an oil producing country our brothers and sisters have to queue for nine hours to buy a product that should just be there? This is something that I believe that with your expertise you need to leverage on.”

On the removal of oil subsidy, the speaker said, “As a legislator, I can tell you there is something about subsidy removal that we are not looking at.

“There is a Price Control Act; if you look at the PCA, section 4 talks about regulating or controlling the prices of products that are listed in the first schedule of that act.

“One of the products listed in the first schedule is petroleum products, so by law in this country, we must control the price of petroleum products.

“But the law as passed by parliament gives a window and prescribing, vesting the responsibility of adding up items on the schedule of the giving items to the price regulating board and I am not sure we have that board in place.”

He noted that the only legal way the Federal Government could permanently remove the subsidy on petroleum products was to initiate an amendment to the Price Control Act or have it repealed entirely by the National Assembly.

He noted that in the schedules to the Act, petroleum products were listed among the items to be regulated through pricing.
Dogara also stated that an alternative was for the government to inaugurate the price control board provided for under the Act so that the board, in performing its functions, could remove petroleum products from the list.

“This is the most legal way to do it so that subsidy can go permanently.

“Its is not by policy pronouncements alone; so it is for the government to quickly put the board in place and this issue can be done with once and for all,” the speaker added.

Okoronkwo earlier informed the speaker that IPMAN planned to build two refineries in the country, one each in Bayelsa and Kogi States.

He explained that the refineries would not only secure employment for Nigerians, but also help in reducing the frequency of fuel scarcity.

Okoronkwo added that IPMAN was also seeking the approval of government to engage in the swapping of crude oil for refined products as an interim solution to the scarcity of products.
According to him, the marketers were prepared to bring in such products at “no cost to government.”

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