Lagos, Nigeria – The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has called on the Federal Government to increase its shares in the Dangote Petroleum Refinery from the current 7% to at least 45%. PENGASSAN President, Festus Osifo, made this recommendation during the presentation of a communique at the association’s Energy and Labour Summit in Lagos on Tuesday.
Osifo highlighted that a higher government stake in the refinery would enhance energy security, ensuring energy affordability, accessibility, and availability for Nigerians. He also suggested partnering with the private sector to maintain petroleum product storage facilities across the country’s six geopolitical zones. This would help manage supply shortages and reduce the impact of poor road conditions and erosion, which often lead to fuel scarcity.
To further strengthen energy security, Osifo proposed the expansion of pipeline infrastructure to facilitate the efficient delivery of refined petroleum products nationwide, reducing the reliance on trucks and minimizing road pressure. He emphasized the importance of stabilizing the exchange rate, noting that the devaluation of the naira has made Premium Motor Spirit (PMS) unaffordable for many Nigerians.
“Had the exchange rate remained at N450 to the dollar, PMS would be selling for around N320 or N350 per litre. The real issue is not the removal of subsidies but the impact of devaluation,” Osifo stated.
PENGASSAN also urged the government to revive the nation’s four refineries and subsequently divest majority shareholdings, allowing core investors to take a 51% stake. This move, according to Osifo, would attract investment and improve the efficiency of local production.
He expressed regret that the Nigerian National Petroleum Company (NNPC) could only secure a 7.2% stake in the $20 billion Dangote Refinery, despite earlier plans to acquire 20%. Osifo noted that Dangote was open to selling a larger share, but the government lacked the financial capacity to take advantage of the offer.
The association also addressed the ongoing trend of divestment by International Oil Companies (IOCs) and the need for a strategic framework under the Petroleum Industry Act (PIA) to manage asset divestment. PENGASSAN warned that divestments could lead to reduced foreign direct investment and technical expertise, potentially affecting production levels.
To mitigate these risks, PENGASSAN recommended the development of a job protection system to safeguard Nigerian workers post-divestment and called for a Memorandum of Understanding (MOU) between divesting companies and trade unions to ensure job security and welfare.
The association concluded that a robust and efficient oil and gas value chain is essential for stabilizing the downstream sector and reducing Nigeria’s vulnerability to fuel shortages caused by logistical challenges and infrastructure deficiencies.
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