Tinubu’s subsidy removal paying off, says Mohammed

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has called on the private sector to pump an additional $30bn to $50bn into the midstream petroleum sector.

The Chief Executive of NMDPRA, Saidu Mohammed, who spoke after concluding his three-day tour of facilities in Rivers State at the weekend, also said President Bola Ahmed Tinubu’s bold move of removing petroleum subsidies had rejuvenated the sector.

Mohammed said, “I said two days ago that the midstream sector alone will require about 30 billion to 50 billion dollars investment. And those investments can only come from the private sector, not the government anymore.

“So, as an authority, as a regulator, what we will do is to make sure that we lay down the desired enablers for them to operate and attract the investment that Nigeria needs.

“But first of all, we have to improve how we do things, and the improvement can be seen here in a world-class facility being operated by Nigerians, and that is the way to go”.

Mohammed said the authority was impressed to see fully integrated facilities designed, built, operated, and fully funded by Nigerians.

The Chief Executive, who toured Aradel Holding PLC, lauded the company for meeting the standard, saying the firm’s fully integrated facility was a demonstration that Nigerians could play a big role in the sector.

Speaking about Aradel’s operation of full Nigerian content, he said: “They have been sending gas to NLNG for about 13 years now. They have also built a refinery of about 11,000 barrels per day. And we have also seen what they have done with the gas in terms of a virtual pipeline, where they are getting compressed natural gas that is taken from here and serves many parts of Nigeria.

“So, holistically, we look at the energy requirement, and a lot of energy requirements have been met by this single asset here. So what we desire to see is more and more of this kind of assets, and that’s what I keep on saying that the midstream sector is”.

Mohammed said the country required more refineries to meet not only local demands but also serve the entire African continent, the United States of America, and Europe.

He said beyond the fuel and the AGO, the companies were expected to convert gas to other valuable products like LPG, adding that the goal was to have the entire petroleum value chain run by Nigerians.

“Nigeria has enough market for petroleum products, they have enough market for the gas, and we need cleaner and cleaner energy”, he said.

Mohammed noted that the country was not far away from affordable energy, adding that the goal was to ensure an ample supply of petroleum products.

He said, “I don’t think Nigerians are very much away from affordable energy, but what we are trying to do is to make sure that an ample supply is there. Ample supply, as basic economics says, the more supply you have, the lower the price it becomes. And that’s where we desire to be.

“You can see how we demonstrated it on PMS. You can see how prices of PMS have gone from 1,000 something to today, we are getting it at about 800, and what have you. And that is what competition brings.

“That as long as we are not subsidizing any segment of the uh business, we will get the desired goal. And the desired goal is to make sure that we have an ample supply of whatever commodity it is. Whether it is gas or gasoline at an affordable rate, and the affordable rate can only come through competition”.

Mohammed observed that President Tinubu’s bold move of removing subsidies has propelled the astronomical growth of the sector.

He said, “No more subsidy has propelled the private sector to come in. And we will continue to build on that. So, the support of Mr. President and governors and all other government agencies is not in doubt anyway”.

In his remarks, the Managing Director and Chief Executive Officer of Aradel Holding PLC, Mr Adegbite Falade, said the visit of NMDPRA was the biggest encouragement the firm could get as an operator.

He said, “As operators, we are not overwhelmed. We see the demand; we see the market, and all we are trying to do is to continue to make those investments that allow us to meet the demand. And the demand is huge. And we have received support from the regulator. We have seen all kinds of support that continues to make our operations grow from one stage to another.

“It is a great and worthy space for fellow investors and operators to come into. And the more we are, the more we build on the redundancy and the resilience of our energy security as a nation.

“We are committed to that course. We are looking at our capacity, and we are just projecting to grow it from one level to another. We are not overwhelmed, but we are doing our best to be part of that solution for energy security.” (The Nation)