LAGOS, JULY 13, 2017 – The introduction of the Direct Sale Direct Purchase (DSDP) fuel import model by the Federal Government will boost the economy if properly implemented, Prof. Wunmi Iledare has said.
Iledare, the Vice President, International Institute of Energy and Law, said the initiative would spur the growth of the downstream subsector of the petroleum industry if the idea is well implemented.
He told The Nation on the phone that the idea was a temporary measure introduced by the government to ease fuel supply, stating that the government has a long-term plan to fully develop the industry by bringing more investors into it.
He said: “The government has plans to attract investments into the industry in the future, in order to galvanise its potentials. As part of efforts to achieve this goal, the government has introduced DSDP model through which it would bring foreign crude oil refiners into the country to invest for growth.
However, the success of the idea is dependent on the ability of the government to provide infrastructure in the sector. The oil refining companies abroad are exposed to better facilities and would like to work with similar facilities in Nigeria. The government would decide whether it wants the refiners to stay in the country or not.
“It is a fact that the four government-owned refineries are unable to operate at full capacities, the issue has resulted in poor operation of the refineries and its inability to guarantee supply nationwide. But if the government can implement the DSDP model well by making infrastructure available, which the foreign crude oil refiners would work with, the better for the country.”
He said the initiative is better than ‘SWAP’ because it would help in attracting investors in refineries into the country in the future. SWAP, which was introduced in order to swap crude oil for petroleum products, has been abandoned by the government.
On the take-off of DSDP model, NNPC’s spokesman, Ndu Ugbamadu, said he would clarify the time from the management, adding that the decision to implement the idea lies with the government. He said NNPC would leverage the idea to promote investments whenever the government begins the implementation.
He said the intention of the government was to open its door to investors through DSDP model, stressing that any attempt by the foreign crude oil refining companies to invest in Nigeria, is line with the policy of the government to grow the economy.
He said the government would not prevent any foreign crude oil refiner that operates under the Direct Sales Direct Purchase import model from investing in refineries in Nigeria, adding that such ideas would help in encouraging economic growth.
He said the government has been calling for local and foreign participation in the economy, stressing that the oil and gas sector would help in achieving that goal.
It would be recalled that some local and foreign oil companies have submitted bids in order to be able to operate under the DSDP model. The approval of the bids lies in the hands of the Federal Government, which would allocate crude oil to the winners of the bids whenever the model takes off.
Through this means the government hopes to lessen the burden of sourcing for fuel abroad and improve the participation of operators at the downstream subsector of the industry.