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FG Disburses N173bn for Uniform Fuel Price Nationwide

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The Federal Government disbursed about N173.2bn for the equalisation of over 11.6 billion litres of Premium Motor Spirit, popularly called petrol, between 2019 and 2022, data obtained from the Federal Ministry of Petroleum Resources on Tuesday showed.

PMS price equalisation is done by the Federal Government through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, in which the NMDPRA ensures price uniformity of petroleum products via the reimbursement of marketers for trucking products to filling stations anywhere in Nigeria.

A document obtained by our correspondent from the FMPR in Abuja, on the scorecard of the ministry since 2019, showed that over N173.2bn had been disbursed to equalise the cost of petrol nationwide.

But despite the hundreds of billions spent on PMS price equalisation, the cost of the commodity has hardly been equal in various states, outside Lagos and Abuja.

Currently, for instance, the price of petrol at mega stations owned by major marketers in Abuja and Lagos hovers between N179 and N180/litre, but the cost of the commodity in many independent retail outlets in other states is usually higher than N250/litre.

The price disparity across states has lingered for years, as one hardly gets the commodity at the same cost in all 36 states and the Federal Capital Territory.

In fact, in some retail outlets operated by independent marketers in major cities like Abuja and Lagos, the cost of PMS is over N200/litre, whereas the approved rate is N179-N180/litre. This, however, is despite the equalisation fund being disbursed by the government.

Providing a progress report on efforts to eradicate the smuggling of PMS across Nigerian borders, the Minister of State for Petroleum Resources, Chief Timipre Sylva, stated in the document that a total of 255,659 truck-outs were equalised during the review period.

He said “11,622,926,494 litres (of PMS was) equalised. N173,200,284,779 (approx.) equalisation paid. 1,277 supplying vessels tracked. 25,525,688,042 litres of total PMS discharged.”

The minister explained that 66.7 million litres of PMS was the average daily sufficiency during the period, adding that the total truck-out volume was 24,346,614,589 litres.

He also stated that the target of the FMPR was to ensure energy sufficiency in power and petroleum products, as well as reduction in the volume of smuggled PMS through improved technology.

Others include PMS equalisation to close differential cost, and to undertake routine end-to-end tracking of petroleum products cargos using  Lloyds List Intelligence and Refinitiv.

Sylva, however, stated that the key challenges to achieving these targets were market infractions, defaulting marketers, delay in submission of out-turn forms by marketers, arrival/discharge quantity variation, and sharp practices by operators.

On the support that was required, he said there was a need for full system automation, review of existing policies, ensure strict compliance with regulations and strong inter-agency collaboration and transparency for petroleum product supply value chain activities around the border.

On the gas flare commercialisation programme, the document stated that the government had identified 48 flare sites, adding that the plan was to allocate them this year.

“48 flare sites have been identified. Six of them have been taken out of the basket because they are not commercially viable  (because the flare volumes are minimal). The plan is that these flare sites will be allocated by Q4 2022,” the petroleum ministry stated.

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Economy

FG Spends $600m on Fuel Importation Monthly, Says Finance Minister Wale Edun

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The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has disclosed that the country currently spends $600m on fuel importation monthly.

The minister revealed this during an interview on AIT’s Moneyline programme on Wednesday.

He said that the high import bill is due to neighbouring countries, up to Central Africa, benefiting from the country’s fuel imports.

Edun explained that the situation was the reason President Bola Tinubu removed fuel subsidy, as the country does not know the exact amount of fuel consumed internally.

According to a report by the National Bureau of Statistics (NBS), the country’s petrol import was reduced to an average of one billion litres monthly after President Bola Tinubu removed the fuel subsidy on May 29 last year.

He said, “The fuel subsidy was removed May 29, 2023, by Mr President, and at that time, the poorest of 40 per cent was only getting four per cent of the value, and basically, they were not benefitting at all. So it was going to be just a few.

“Another point that I think is important is that nobody knows the consumption in Nigeria of petroleum. We know we spend $600m to import fuel every month but the issue here is that all the neighbouring countries are benefitting.

“So we are buying not for just for Nigeria, we are buying for countries to the east, almost as far as Central Africa. We are buying. We are buying for countries to the North and we are buying for countries to the West. And so we have to ask ourselves as Nigerians, how long do we want to do that for and that is the key issue regarding the issue of petroleum pricing.”

The minister also clarified that the N570bn fund release to state governments was implemented last year December.

He said, “This actually refers to a reimbursement that they received from December last year onwards and it was a reimbursement I think under the COVID financing protocol but the point is that the states have received more money. They have received more money. Mr President has charged to ensure food production in the states.”

According to him, the recent decision to raise the maximum borrowing percentage in the Ways and Means from five to 10 per cent does not imply that the Federal Government tends to rely on the Central Bank of Nigeria financing.

He also said the welfare of Nigerians remained a key priority for the current administration, particularly ensuring food availability and affordability.

Edun said, “There is a concerted effort to ensure that we have homegrown food available. In the short term, apart from what is being distributed from reserves, there is a window that has been opened for importation because the commitment of Mr President is to drive down those prices now and make food available now.”

He assured all that the measure would not undermine local farmers, as importation would only be permitted after exhausting local supplies.

He said, “So, one of the conditions for this importation will be that everything available locally in the markets or with the millers and so forth has been taken up. We will have auditors that will check that.”

He said these interventions seek to reduce inflation, stabilise exchange rates, and lower interest rates, thereby creating a conducive environment for investment and job creation.

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Economy

FG Dismisses Dangote Petroleum As Inferior, Says Refinery Not Yet Licenced, Completed

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By Eric Elezuo

A Federal Government of Nigeria petroleum regulatory agency, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA), has dismissed petroleum products from the Dangote Refinery as inferior, in the guise of those f4om Watersmith and Aradel, making a case for superiority of imported ones.

The revelation was made by the Chief Executive Officer of NMDPRA, Mr. Farouk Ahmed, while responding to questions from a section of the press, a video of which is trending online, adding that the refinery is only 45% completed, and yet to be licenced for operation by the Nigerian government.

Earlier, the Vice President of Dangote Industries Limited, Devakumar Edwin, had alleged that most fuel products imported into Nigeria are substandard, blaming International Oil Companies (IOCs) of frustrating Dangote’s quest for production.

In the short video, which lasted a little over a minute, Mr. Ahmed debunked theories attached to the functionality of the Dangote Refinery, saying it does not have the capacity to ‘feed’ the nation of its petroleum needs, as it stands. He however, refuted arguments that some elements within the oil and gas sector were trying to scuttle the Dangote Refinery.

A transcript of the NMDPRA’s boss short response is as follows:

“It about concerns of supply of petroleum products acros the nationwide, and the claim that we are trying to scuttle Dangote. That is not so. Dangote Refinery is still in the pre-commissioning stage. It has not been licenced yet. We haven’t licenced them yet. I think they are about 45 per cent completed, or completion rather.

“We cannot rely on one refinery to feed the nation, because Dangote is requesting that we suspend or stop imports, especially of AGO and DPK, and direct all marketers to his refinery. That is not good for the nation in terms of energy security, and it is not good for the market because of the monopoly.

“Dangote Refinery, as well as some modular refineries like Watersmith Refinery and Aradel Refinery, are producing between 650 and 1,200 PPM. Therefore, in terms of quality, their products are inferior to imported ones,” he stated.

It will be recalled that only last Sunday, the President, Dangote Industries Limited, Aliko Dangote, while hosting senior journalists from across various media concerns, revealed that the Nigeria National Petroleum Company Limited (NNPCL) owns only 7.2% of stakes in the refinery, and not 20 percent as widely circulated. He also revealed that the refinery is set to begin fuel supply in August 2024.

Many stakeholders and respondents have alleged that there’s no love lost between the government of the day and the Dangote Group, and that explains the hiccup situation surrounding the takeoff the $19 billion refinery.

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Economy

NNPC Reacts to Owning Only 7.2% Stake in Dangote Refinery

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The Nigerian National Petroleum Company (NNPC) Limited has explained why it holds only a 7.2% equity in the $19 billion Dangote Refinery, instead of the widely speculated 20%. 

A statement released on Sunday by Femi Soneye, the Chief Corporate Communications Officer of NNPCL, addressed the company’s recent decision regarding its investment in the Dangote Refinery.  

Soneye said that the decision to reduce their investment was carefully considered and communicated several months ago to Aliko Dangote. 

Dangote mentioned to newsmen on Sunday that NNPC no longer holds a 20% stake in the refinery.  

He explained that this change occurred because NNPCL failed to pay the balance of their share, which was due in June. 

Reacting, NNPC said:  

“NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals.

“The decision to cap its equity participation at the paid-up sum was made and communicated to Dangote Refinery several months ago,” NNPC said.

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