The Federal Government appears to have reversed the exclusive petrol importation rights for holders of local refining licence to import petroleum products, following the signing into law of the Petroleum Industry Act, PIA.
According to the upper chamber’s committee report on the PIA, the legislators had intended to limit the importation of petroleum products to local refining licence holders. This, however did not go down well with industry stakeholders.
Section 317 (8) of the senate version of the report noted that petrol importation licence will be restricted “only to companies with active local refining licences”. “The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining,” the senate version read. “To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences. “Import volume to be allocated between participants based on their respective production in the preceding quarter.”
Consequently, ‘qualified’ refiners or companies can now participate in the importation of petroleum products.
According to the Act, Section 317 (8), petrol importation licence will be granted to holders of refining licence or companies with “proven track records of international crude oil and petroleum products trading”.
“Pursuant to subsection (8), licence to import any product shortfalls may be assigned to companies with active local refining licences or proven track records of international crude oil and petroleum products trading.
“Import volume to be allocated between participants shall be based on criteria to be set by the Authority taking into account their refining output in the preceding quarter, the share of active wholesale customers competitive pricing and prudent supply, storage and distribution track records,’’ it reads.
Source: Vaguard
