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By Obas Esiedesa

Energy experts have called for the removal of price control structure as well as other measures impeding the growth of the downstream sector of the petroleum industry in Africa.

The experts noted that that non-market pricing structures, complex supply chains, smuggling and adulteration of products are amongst challenges facing the sector in the continent.

They spoke at a virtual meeting led by the African Refiners and Distributors Association, ARDA, under the 2021 ARDA Virtual Work Group Workshop Series with this edition focusing on the “Role of Regulators in ensuring Compliance with AFRI Fuels Roadmap.”

The African Union and ARDA are working on the introduction of harmonized, pan-African cleaner fuel AFRI-6 (10 ppm Sulphur) specifications for gasoline and gas oil/diesel across the continent by 2030.

ARDA is encouraging all its members to invest in near-term upgrades for their refineries and associated facilities to enable them meet AFRI-6 specifications directly thereby future-proofing their facilities by ensuring their productions meet global clean fuel specification standards.

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ECOWAS Director of Energy, Bayaornibe Dabire, speaking at the event said that range of fuel specifications in the sub-region spans from 50 ppm Sulphur in some countries to 10, 000 ppm Sulphur in others.

Dabire pointed out that the need for harmonization led to the issuance of ECOWAS Directive C/DIR.2/09/20 last year, which covers exhaust gas and particulate emission limits for two-wheeled, light and heavy vehicles.

He stressed that any improvement in fuel specifications without alignment with vehicle emission limits would not have the desired effect, and stated that “Member States shall prohibit the imports of gasoline and diesel, which does not comply with the harmonized fuel specifications.”

Dabire disclosed that from January 1, 2025, only gasoline and diesel that meet the harmonized fuel specifications can be marketed within the ECOWAS region.

A waiver would be provided for refineries within the region to remain operational while they introduce measures to comply with the Directive, he added.

On his part, ARDA’s Executive Secretary and Chief Executive Officer, Anibor Kragha said that effective regulatory frameworks remain critical for development of the sector, especially as Africa’s population is projected to increase significantly over the next two decades.

Kragha noted that the growth in population would in turn lead to increase in demand for petroleum products.

According to him, “The workshop attendees were able to see how a strong regulator like National Petroleum Authority, NPA, in Ghana has used data-driven decisions to effectively regulate the Ghanaian market and facilitate key reforms in the area of cleaner fuel imports, while lack of clarity on the ownership, roles and responsibilities of regulation activities has led to sub-optimal regulations in other countries like Ethiopia and Niger.”

Also speaking, Head Strategy and Business Development, Rainoil Limited, Emmanuel Omuojine said that price controls in Nigeria had resulted in lost investments in the downstream sector while smuggling of petrol had persisted due to significant price differences between Nigeria and its neighbouring countries.

Omuojine said the opportunity cost of funds used for subsidies had detracted from funding of other key areas of the Nigerian economy like healthcare, education, transport and power.

He, therefore, called for deregulation of the downstream sector in Nigeria to maximize benefits from the industry.

Vanguard News Nigeria


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