On the cusp of momentous strides

• Published date: 09 January 2023
• Publication title: Nigeria - The Nation

The continuing implementation of the Petroleum Industry Act (PIA), decisive decisions around petroleum subsidy, deregulations, a defining restart of crude refining, further privatisation and reforms set the energy sector on a year that promises much challenges. John Ofikhenua and Ambrose Nnaji report.

Domestic refining of crude oil is the greatest expectation that will redefine the Nigerian downstream petroleum sector in 2023.

With the completion of 650,000 barrels per day Dangote Oil Refinery and a few new modular refiniries that are expected to come on stream in 2023, the petrol market will no doubt record a very drastic change.

There is however some degree of uncertainty about how the market would thrive amid partial regulation. In as much as the Federal Government is still adamant over the removal of the Premium Motor Spirit (PMS) petrol, there are doubts about the pricing of the emerging markets.

Would Dangote consent to selling under a regulated price regime? Although the government has pegged this year for the removal of the subsidy, it is still hazy whether the refineries will delay their take off till the phase out of the subsidy. Thus, the government has to come out clear on the terms of engaging the private refineries before subsidy removal.

There will be a change of government administration this year. Interestingly, most of the presidential candidates have vowed to remove the subsidy. Should the next government stop the subsidy, Nigerians shall live to tell new tales of a liberalised market.

Meanwhile, this year will confirm how far the gains from pipeline surveillance recorded last year can endure. With accusation and counter accusation among the military and the cabal in the industry, 2023 shall tell whether the next administration will have the political will to sustain the battle against crude oil theft.

From the upstream, it is still very unclear what the multinationals have up their sleeves in terms of investments in 2023. Had COVID-19 pandemic and Russian Ukraine war not altered their plans, their energy transition plans would have brought the hydrocarbon industry to its kneels last year.

Therefore, it is uncertain how willing they would be about oiling oil and gas investments. The next few weeks would however tell a lot about their thinking or rethinking of the industry as their indication of interest in the seven offshore blocks of the Nigerian Upstream Petroleum Regulatory Commission (NURPC) is on course.

Besides, more tales about the Kolmani milestone will shape the industry this year as it is to spur oil find and prospecting in other basins in the country.

Electricity reforms

There may be a renewed electricity market this year as the next administration is likely to come up with its reforms aside the expected assent to the 2021 Electricity Sector Bill. Already a candidate to beat in the February election has vowed to stop estimated billings in the Nigerian Electricity Supply Industry (NESI).

Metering which remains a...