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Tag: NNPC Limited

  • NNPC makes fresh delivery of crude oil to Dangote Refinery

    NNPC makes fresh delivery of crude oil to Dangote Refinery

    The Nigerian National Petroleum Company (NNPC) Limited has disclosed it would be supplying a total of 17.6 million barrels of crude oil to Dangote Refinery between September and October 2024 as part of the federal government’s push to drive local production of petroleum products.

    TheNewsGuru.com (TNG) reports NNPC Limited to have said this month alone, the Dangote Refinery will be receiving 6.3 million barrels of crude oil in 7 cargoes and that in the month of October the refinery will receive another 11.3 million barrels of crude oil in 13 cargoes.

    “We have supplied about 30 million barrels of crude oil to Dangote Refinery so far, and this month alone, we will be providing 6.3 million barrels of crude oil to the refinery in seven cargoes. In October, we will be providing another 11.3 million barrels of crude oil to Dangote refinery in 13 cargoes. We are doing everything possible to ensure this situation normalises,” the NNPC said.

    Mr Adedapo Segun, the Executive Vice President, Downstream, NNPC Limited, who made this known in a statement on Thursday, noted that this is in addition to the 30 million barrels of crude oil that had earlier been supplied to the Dangote Refinery.

    He also noted that the current fuel scarcity is expected to ease off in a few days as more stations will begin selling the product and that foreign exchange (forex) illiquidity has been a significant factor influencing the fluctuation in prices of petrol occasioned by unrestricted free market forces.

    Segun said Section 205 of the Petroleum Industry Act (PIA 2021), which established NNPC Limited, stipulated that petroleum prices were determined by unrestricted free market forces.

    He said that the NNPC Ltd. has about 1,000 fuel stations nationwide and was collaborating with marketers to ensure that stations opened early and close late to maintain adequate fuel supply to meet the needs of Nigerians.

    “We are also engaging relevant authorities to ensure products diversions are prevented and timely deliveries to all stations are ensured. The scarcity should ease in the next few days as more stations recalibrate and begin operations.

    “The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices,” he said

    On the commencement of lifting PMS from the Dangote Refinery, Segun said that the NNPC Ltd. was awaiting the September 15 timeline provided by the refinery.

  • NNPC: From monopoly to monopsony – By Etim Etim

    NNPC: From monopoly to monopsony – By Etim Etim

    By Etim Etim

    Very few business organizations are as lucky as NNPCL, Nigeria’s state-owned oil company, founded over 50 years ago. Since its founding, the corporation has consistently failed to perform its basic functions and meet its organizational objectives; and rather than being liquidated or put up for sale for these failures, NNPC routinely undergoes some form of moulting, shedding its skin and assuming a new look. The façade might look brilliant, but it’s only skin-deep. NNPC was founded about the same time, or earlier than successful global state-owned oil companies like Saudi Aramco, owned by Saudi government; Petronas (Malaysian government; Equinor ASA (formerly Statoil, owned by Norway) and Petrobras, owned by Brazil. While these other ones have grown into transnational giants with oil fields and refineries across the globe, NNPC has become a cesspool of corruption, incompetence and decadence. But the corporation is very adept at playing games and worming itself into the heart of politicians, just to stay alive. This month, the government changed its status as a monopolist, responsible for sole importation of petroleum products, to a monopsonist, the sole buyer of Dangote Refinery’s petrol. NNPC is the ultimate amoeba of Corporate Nigeria, and the implications are worrisome.

    It was Aliko Dangote himself that announced that the federal government has mandated the NNPC to be the sole off-taker for petrol from his refinery. It has many implications for availability and pricing of the product. After many years of operating as an inefficient, corruption-ridden monopolist, exclusively importing fuel for years, the corporation has just turned a monopsonist – a single buyer of Dangote’s petrol. In many economies, monopolies enjoy high profits and sometimes efficiency due to lack of competition, but in the case of NNPC, Nigerians were served with persistent fuel scarcity; inefficient business models and opacity in operations. If the corporation could not deliver imported fuel to Nigerians, what’s the guarantee that it will manage the distribution of Dangote petrol without hiccups? How did NNPC incur a $6 billion indebtedness to its offshore petrol suppliers when its local customers were even paying in advance for the products? This indebtedness has cut off petrol supplies into the country and led to the acute scarcity we have today. What is the guarantee that NNPC will not owe Dangote and mess up fuel distribution in the country?

    The inefficiencies inherent in its operations would greatly impede NNPC’s capacity to purchase and distribute products to other retailers. How would the transactions be funded? Credit sales? Bank credit? IOUs? Is the corporation credit worthy? Note that the Dangote Group is still indebted to the tune of about $3 billion to some Nigerian banks, being part of the loans secured to fund the construction of the complex. Can the Group therefore afford to be further weighed down with an indeterminable exposure to a dysfunctional state enterprise? In its 2023 audited annual report, the corporation announced that it spent a whopping N7 billion on unspecified items lumped as ‘’others’’, while N10 billion was spent on NNPC Foundation. What constitutes the ‘’others’’? Such opacity is not permitted in modern business practices driven by good corporate governance.

    As a sole off-taker, NNPC has become a major determiner of petrol price at fuel stations across the country. This is why Mr. Dangote could not announce the price at which his product would be selling at the pumps. ‘’That depends on NNPC’’, he told reporters last Monday when asked the retail pump price, adding, ‘’the Federal Executive Council has asked the NNPC to determine the price’’. In other words, the country is still in a situation in which the government, instead of the market, remains the fixer of petrol price. That puts the Tinubu administration in a bind, with the immediate consequence being that the government will continue to face the wrath of labour unions whenever prices move up.

    Petrol subsidy was expected to die a natural death as full deregulation kicks in once the Dangote Refinery commences production. The government was expected to completely hand off price-fixing duties; and allow the regulators to oversight the business, the way the CBN manages the banking industry.  But since NNPC is still involved as a buyer’s monopoly (another name for monopsony), the refinery might be ‘squeezed’ to settle at a controlled price. Alternatively, the government may continue to subsidize the product – buy high from the refinery and sell lower to Nigerians. Either way, a pricing dispute between the refinery and NNPC is inevitable, and that would be bad for Dangote. In trying to fend off pressures from labour and motorists, the government may shift the blame on Dangote for being excessive in its pricing, instigating the regulators in the mid-stream and low-stream segments of the market (who had never been particularly fond of Aliko Dangote and his refinery) to clamp down on the business mogul. I pity Aliko Dangote. His patriotism has become his albatross. He can’t say ‘’No’’ to this government; and the President, being the Minister of Petroleum, doesn’t brook disagreement. Interesting days are ahead!

    My take is that NNPC should no longer enjoy any monopolistic or monopsonist status because it is incapable of managing its own affairs. Its bloated, inept, crooked and opaque.  Dangote Refinery should be allowed the freedom to appoint as many off-takers or distributors as possible.  In fact, there’s no reason why the refinery cannot even own its own filling stations either solely or in partnership with existing outlets, and sell directly to Nigerians, as it happens in other countries. Nigerians have expected that the new refinery will end perennial fuel scarcity and long queues. My hope has been that petrol would hover between N500 and N700 per litre at the pumps. But with this new arrangement of inserting NNPC into the mix, the prospects are daunting.

  • JUST IN: NNPC opens up on when Dangote petrol will be available

    JUST IN: NNPC opens up on when Dangote petrol will be available

    The Nigerian National Petroleum Company (NNPC) Limited has disclosed that it is awaiting the timeline provided by Dangote Refinery to make its petrol available for Nigerians.

    TheNewsGuru.com (TNG) reports Executive Vice President of Downstream, NNPC Limited, Mr. Adedapo Segun made the disclosure on Thursday.

    Mr Segun disclosed that Dangote Refinery had given a timeline of September 15th and that the current fuel scarcity is expected to “subside in a few days as more stations recalibrate and begin selling PMS”.

    He stated that foreign exchange (forex) illiquidity has been a significant factor influencing the fluctuation in prices of petrol, which Segun said are governed by unrestricted free market forces, as provided for in the Petroleum Industry Act (PIA), 2021.

    Speaking on TVC News’ “Journalists’ Hangout” show, Segun explained that Section 205 of the PIA, which established NNPC Ltd., stipulated that petroleum prices were determined by unrestricted free market forces.

    According to him, “The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.”

    On the commencement of lifting PMS from the Dangote Refinery, Segun said that the NNPC Ltd. was awaiting the September 15th timeline provided by the Refinery.

    Segun, who said no right-thinking individual would be comfortable with the current fuel scarcity, added that the NNPC Ltd. has nearly a thousand filling stations nationwide and was collaborating with marketers to “ensure that stations open early, close late, in order to maintain adequate fuel supply to meet the needs of Nigerians.”

    He assured Nigerians: “We are also engaging relevant authorities to ensure products diversions are prevented and timely deliveries to all stations are ensured. The scarcity should ease in the next few days as more stations recalibrate and begin operations.”

  • “I’m loyal, sir” – By Pius Mordi

    “I’m loyal, sir” – By Pius Mordi

    By Pius Mordi

    These are unusual times for Nigerians. Having been reduced to the nadir of multi-dimensional poverty, the government now holds the key to healthy living. It no longer matters if there is paid employment or a thriving business. Its either you are an elected official in the legislative arm or angle for an appointment by the executive arm. Having a business, even a flourishing at the time, is no longer good enough. Businesses are dead anyway. It is a matter of getting a plumber job which only qualification to security it is to be in the good books of the head of the executive branch or pledge loyalty and allegiance to number one man, his road map or whatever he stands for.

    As an appointee, the true oath of office is undiluted loyalty to the head of the government. The official oath of office where allegiance is pledged to the state is just academic. Job security is guaranteed by the extent to which the appointee demonstrates loyalty and protects the interests of the boss. Inventiveness is tolerated only to the extent that it is deployed to advance the cause the boss is known to be pursuing.

    It does not matter if you are in the legislative branch, the judiciary or any of the security agencies, your activities and actions must align with the interests of the boss.

    Walter Onoghen as Chief Justice of the Federation when Muhammadu Buhari as president underestimated the limitless application of the president’s executive powers. Being the co-equal to another arm of government, he thought the rule of law and the constitution would prevail. We know how it ended. But Godswill Akpabio knew the practical rules that apply. The path to his emergence as President of the Senate and head of the National Assembly was paved by Aso Rock, not by the democratic consensus of his colleagues at the red chamber. Akpabio did not need to be prodded to acknowledge where the power in his emergence flowed from. When he had to appear in a public event with President Bola Tinubu, he could not miss the opportunity to let him see that his loyalty to the president was unalloyed. He had Tinubu’s customised design on his cap made for him and he duly wore it.

    Ali Ndume failed to read the script. As Senate Chief Whip, he had the effrontery to accuse the President of having been caged within the walls of Aso Rock Villa. The retribution was swift and decisive. The senator sobered up afterwards and apologised before he was rehabilitated.

    The recent #EndBadGovernance protest in August provided the platform for all the appointees to prove their inventiveness in loyalty. For the federal Attorney-General and Minister of Justice, Lateef Fagbemi, it was easy for him to use the courts to procure whatever injunction he desired. All the heads of security agencies took turns to show how ready they were to deploy their agencies to bully the protesters. Even the Chief of Defence Staff, General Christopher Musa, warned the protest planners that the military will not watch the country “drift towards anarchy under the guise of protest”.

    Kayode Egbetokun waited until calm had returned to the polity before unfurling his own show of loyalty. The people arrested during the protests have been arraigned for not violent conduct and destruction of property as happened in some areas, but treason and mutiny! He even sought to roped the Nigeria Labour Congress into the scheme with an audacious summon of their president before he was forced to change tack after organised labour mobilised to fight back.

    It is a play book developed by political hangers-on and those usually deployed to fight for politicians. When the election has been won, the boys with nothing else forthcoming take turns to hang around the now power wielding politicians to verbally pledge their loyalty in return for whatever crumbs will be thrown at them. Expressions such as “We are loyal”, “The boys are loyal”, “No shaking, we are here” are routinely used while they wait for what cash or patronage will be thrown at them.

    Aso Rock may not have scripted Egbetokun’s resort to charging arraigned protesters with treason and mutiny. He had to impress and demonstrate his loyalty to the establishment. It guarantees the safety of his job, moreso now that his service period has been extended by additional three years beyond when he ought to have retired. He is expected to serve a stern warning to all who may be harbouring thoughts of organising fresh protests over the perversive hunger in the country. Make no mistake about, more of such show of loyalty will be coming not just from the Police.

    It is no longer “Loyalty to the nation all the time, loyalty to the government when it deserves it” as Mark Twain admonished. To get a job and keep it, it’s about “I’m loyal, sir”.

    Postscript

    NNPCL’s voodoo economics

    Give to Mele Kyari. The group managing director of Nigeria’s state oil behemoth must be a super wizard. Two weeks ago, he gleefully announced to the country that NNPCL under his watch recorded a net profit of N3.297 trillion from its “audited financial statement” at the close of December 2023.

    In the course of making the financial claim, petrol scarcity had already set in with Kyari assuring that the nightmare would soon be over. September has just set in and Kyari and his people have changed the story. Now, NNPCL is owing marketers up to $6 billion. According to Reuters, the debt is such that continuous supply of refined products can no longer be guaranteed.

    Although NNPCL is yet to yet give details on how it debt accumulated, it is a situation it can no longer defend or justify. How does an oil company transit from N3.297 trillion profit at the end of December 2023 to declare a debt of $6 billion almost overnight.

    So what changed? How did Kyari and his crew contrive to accomplish this? For an “audited” financial report, no economics class can explain this phenomenon. It is truly an unusual phenomenon. If its not voodoo economics, it could be voodoo accounting. Mele Kyari qualifies to grant a paid lecture at Harvard on how he managed such transition.

  • Why NNPCL’s decision to lease instead of sell refineries spells doom – By Magnus Onyibe

    Why NNPCL’s decision to lease instead of sell refineries spells doom – By Magnus Onyibe

    For a long time, I have advocated for the federal government to privatize the oil and gas sector, which has been tightly controlled since oil was first discovered in commercial quantities in 1956 in Oloibiri, now in Bayelsa State. I reiterated this point in my column last Tuesday, August 27th, in an article titled “Understanding the Toxic International Petrol Politics in Nigeria,” where I shared the following perspective: “Currently, there are five fully operational modular refineries: Aradel in Port Harcourt, WalterSmith in Imo State, Edo Refinery and Duport Midstream in Edo State, and OPAC in Delta State, with a combined processing capacity of less than 20,000 barrels per day.”

    I further noted: “These smaller refineries are expected to benefit from President Bola Tinubu’s recent directive to sell the 445,000 barrels per day of crude oil, previously reserved for local refining, in naira. This crude oil reserve was intended to supply the four NNPCL refineries, which have been non-functional for over a decade despite consuming over $25 billion in turnaround maintenance without producing even a single liter of petrol.”

    I concluded my appeal with advice that the refineries should be transferred to the private sector, as NNPCL lacks the capability and efficiency to operate them profitably: “Hopefully, the current administration will recognize the wisdom in my advocacy for selling the struggling government-owned refineries to private sector players who can operate them more efficiently, as I have argued in numerous media interventions over the past decade.”

    I have consistently argued that the government has no business-in-running- businesses. Following the commissioning of the Dangote Refinery by former President Muhammadu Buhari on May 22 of last year, I wrote an article advocating for the sale of the struggling NNPCL-owned refineries. The article, titled “Tinubunomics: Time To Sell The Petroleum Refineries,” was published on August 15, 2023, and directly addresses the current situation.

    If NNPC Ltd had fully committed to selling its controlling interest to private investors, it would demonstrate that the nation’s leadership is serious about truly opening up the oil and gas sector. Beyond that, the move would have alleviated the burden on ordinary Nigerians who have long suffered from fuel shortages, a crisis that has plagued the sector since its inception and even to date that queues have returned to petrol stations again causing avoidable anguish on motorists.

    In the piece, I made the case as follows:

    “The universal principle that government has no business in business is crucial in solving the current energy crisis affecting both our leadership and citizens. It’s unnecessary to reiterate that government operations are inherently inefficient due to the bureaucratic hurdles typical of public sector governance. Such complex processes are ill-suited for running the business of refining petroleum products, a task that requires the intricate coordination of human expertise and advanced technology.”

    I further argued:

    “Operating an oil refinery demands a high level of agility and quick decision-making to achieve optimal outcomes. In addition to the government’s inability to act swiftly, which hampers progress, there’s the fundamental difference in the objectives of government operations versus business operations.”

    I also pointed out:

    “The primary role of government is to organize and protect its citizens for progress and prosperity. It achieves this by ensuring compliance with the rule of law, which both leaders and the governed must respect. This adherence to the rule of law is essential for establishing and maintaining law and order, benefiting all members of society and legitimizing the government.

    What this means is that the government is not driven by efficiency or speed but by its capacity to provide equity and justice for citizens, as well as uphold governance principles and ethics for the greater good of the society.”

    To support my argument with an ideological foundation, I referenced a well-known philosopher:

    “As John Locke stated, the purpose of government is ‘to secure and protect the God-given inalienable natural rights of the people.’”

    I further reinforced my point by explaining the appropriate role of government in a market-driven capitalist economy like ours:

    “Among other responsibilities, the government essentially provides the legal and social framework within which the economy operates. This means that the government is not meant to be a business operator but rather to ensure a level playing field for businesses to compete.”

    Expanding on the issue, I contrasted the ideal scenario I was advocating with the reality at the time the original piece was written about a year ago:

    “Unlike the forces that drive business, where companies thrive on competition with similar service providers to gain a market advantage and thereby add value to society, the situation in Nigeria was quite different. The government had been the sole investor in oil and gas refining since oil was discovered in Oloibiri, modern-day Bayelsa, in 1956, creating a monopoly that stifled value creation.”

    I then reflected on the situation:

    “That was the unfortunate state of affairs in Nigeria until the Petroleum Industry Act (PIA) came into effect last year. This was followed by President Tinubu’s inauguration speech on May 29, which marked the end of the petrol subsidy.”

    Additionally, I noted:

    “Before these changes, the Federal Government’s monopoly in the oil and gas sector was like an albatross hanging over it. Unlike the goals of government, the primary objective of any business is to meet the needs and wants of society while generating profit.”

    After having firmly opposed the idea of government involvement in business just a year ago, it was a remarkable and welcome surprise that our nation’s oil giant, the Nigerian National Petroleum Corporation Ltd (NNPC Ltd), has now recognized the merit of the argument. On Friday, August 30, NNPC Ltd announced that it is inviting private sector operators to bid for the management and operation of the Kaduna and Warri refineries.

    This announcement, made by the Chief Corporate Communications Officer of NNPC Ltd, Mr. Olufemi Soneye, stated that the company is seeking both short- and long-term Operations and Maintenance (O&M) contracts for the Warri Refining and Petrochemical Company (WRPC) and the Kaduna Refining and Petrochemical Company (KRPC).

    Elaborating on the initiative, he outlined the scope of work for the O&M contracts, which will include but not be limited to:

    • – Long-term and short-term production/operations planning
    • – Production and operations execution
    • – Monitoring, reporting, and optimization of operations
    • – Maintenance planning (short-term)
    • – Maintenance execution
    • – Reliability and inspection
    • – Process and control engineering
    • – Quality Control, Quality Assurance, and Laboratory
    • – Specialist engineering
    • – Health and Safety
    • – Environmental management
    • – Turnaround maintenance planning and execution
    • – Minor projects
    • – Non-hydrocarbon Procurement
    • – Sub-contractor management
    • – Inventory and warehouse management

    The NNPC Ltd spokesperson further mentioned that the company’s goal is to enhance the refining process to ensure quality by utilizing the latest technology, including Computerized Maintenance Management Software (CMMS) and Warehousing Management Systems (WMS).

    While this move falls short of the complete or partial sale of the refineries, which l have been advocating for and was initially implemented by former President Olusegun Obasanjo in 2007 before being reversed by his successor, the late President Umar Yar’Adua, this new initiative is still a positive step. As the saying goes, “Half a loaf is better than none.”

    The basis for my argument that existing oil refineries should be sold to private investors stems from the widespread belief among Nigerians that the government’s business is- nobody’s- business. In other words, government-owned businesses are often neglected or mismanaged. The poor performance of government-owned enterprises in Nigeria further supports the idea that, in a market-driven capitalist economy, the government should not be involved in business—a principle widely accepted in management theory.

    There are exceptions to this rule, such as in monarchical systems like Saudi Arabia, where ARAMCO, a state-owned company, remains highly profitable, generating $100 billion in 2023. This success can be attributed to the unique nature of a monarchy, where loyalty to the king means that the government’s business is effectively the king’s business, as the king embodies the state.

    Moreover, other state-owned oil companies in market-driven economies, such as Petrobras in Brazil ($25 billion profit), Sonatrach in Algeria ($5.5 billion), and Petronas in Malaysia ($19 billion), have also shown significant profitability. The concerns about NNPCL’s underperformance are heightened when compared to these companies, especially since NNPCL, operating in a similar market-driven environment, reported a profit of N2.297 trillion ($3.3 billion) in its 2023 annual report. Given that Nigeria is OPEC’s sixth-largest oil producer, NNPCL has the potential to perform much better and is currently underachieving.

    Similarly, government involvement in business is mandatory in China due to its communist orientation, which represents another exception to the general rule that governments should not engage in business. Unfortunately, in Nigeria, the belief that “government business is nobody’s business” has become ingrained among public servants, leading to significant negative impacts on the profitability of publicly owned organizations.

    In contrast to the apathetic attitude often seen among Nigerian public servants toward state-owned assets, citizens in China exhibit a strong sense of ownership over public enterprises due to a deep-seated patriotism reinforced by the country’s communist ideology. This ideological commitment has made government involvement in business highly successful in China. A prime example is the construction firm China Civil Engineering Construction Corporation (CCECC), which plays a central role in the nation’s infrastructure development projects across Africa, including road construction, railways, and ports in Nigeria.

    On the other hand, in Nigeria, where there is a notable lack of patriotism, particularly within the public and civil service, government dominance in business has historically led to poor outcomes. This was the case until the government began to relax its control over businesses, starting with the unbundling efforts during General Ibrahim Babangida’s military regime.

    During that period, industries such as broadcasting and banking were privatized, a trend that continued under President Olusegun Obasanjo’s civilian administration. Obasanjo further opened up sectors like ports and telecommunications to private investment, and more recently, the electricity sector has also been liberalized.

    A common thread among these privatized entities and newly accessible sectors in Nigeria is that they have all become profitable, significant job creators, and contributors to GDP growth. Additionally, they have become more substantial sources of tax revenue following the government’s decision to allow private investment.

    The situation highlights the risks associated with the prevailing belief in Nigeria that “government’s business is nobody’s business,” a notion deeply ingrained in the mindset of many Nigerians, especially public and civil servants. This attitude often leads to the reckless management of state-owned enterprises, which has resulted in their failure.

    In contrast, businesses where the government holds only a minority stake have generally thrived. For example, the Nigerian Liquefied Natural Gas (NLNG) company, which operates in partnership with international oil companies (IOCs), has been a significant revenue source for the NNPC.

    To address the challenges of government-owned businesses, it is crucial to move away from the mindset that government assets are inherently neglected. This attitude underlies issues such as corruption and the mismanagement of public utilities, and government-run businesses such as banking services when the likes of  UBA,FirstBank and Unionbank, electricity provider NEPA, telecommunications company NITEL, and the airline Nigeria Airways were under the control of the government.

    Following the unbundling of the aforementioned assets to private investors, they have become profitable not only  to the investors but they are also creating employment and paying taxes to the government.

    Despite NNPC’s transformation into NNPCL and its shift towards a market-driven approach, it still operates with bureaucratic constraints typical of government agencies. Rather than pursuing a full sale of the refineries, NNPCL is opting for a concession strategy, inviting private sector bids for the management of the Warri and Kaduna refineries.

    Given the problematic history of corruption, such as the crude oil-for-refined products swap scandal under former Minister Diezani Alison-Madueke, it is concerning that NNPCL is not opting for a complete sale to private investors with the necessary expertise and funding. This cautious approach seems to ignore the lessons from previous failures in managing government assets.

    Fortunately, the Petroleum Products Importers Association has expressed interest in pooling resources to acquire one of the refineries. This initiative should be encouraged. Private sector operators are likely to use the refinery more effectively compared to leasing it to an operator who might exploit the system, as seen with the mismanagement of toll gates on highways.

    Selling the refineries or their controlling shares outright to new buyers could also enable Nigerian retail stations to expand into neighboring countries and address the problem of petroleum product smuggling across our borders. The example of OVH’s purchase and sale by NNPCL Retail, and its subsequent merger, demonstrates the potential for Nigerian buyers to extend the franchise to neighboring countries, similar to how Citgo, a Venezuelan brand, once operated in the U.S.

    Smuggling may persist due to the lack of a formal framework for selling petrol across borders. The type of innovative approach required for this expansion is best handled by private sector investors. Therefore, President Bola Tinubu should consider transitioning from the proposed concession of the Warri and Kaduna refineries to a full sale to experienced entrepreneurs.

    Over the past fifteen months, President Tinubu has revised several policy initiatives he deemed suboptimal. Concessioning the refineries is less effective than a complete sale, and reversing this decision would likely earn him a commendation from industry stakeholders and the public. Given Mr.President’s responsiveness to Nigerians’ needs such as increasing the amount paid to the poor through conditional cash transfer and returning some of the subsidy on petrol pump prices, there is hope that he will take the necessary steps to stop NNPC ltd from engaging in this latest gambit which spells doom for the oil behemoth that is supposed to be our country’s cash cow but still punching below its weight. As Oliver Goldsmith wisely said, “Hope is not a bait; it covers any hook.”

    Magnus Onyibe, an entrepreneur, public policy analyst, author, democracy advocate, development strategist, alumnus of Fletcher School of Law and Diplomacy, Tufts University, Massachusetts, USA, and a former commissioner in Delta state government, sent this piece from Lagos, Nigeria.

    To continue with this conversation and more, please visit www.magnum.ng

  • Motorists, commuters, traders react over new price of petrol

    Motorists, commuters, traders react over new price of petrol

    The Nigerian National Petroleum Company Ltd. (NNPCL) has increased the price of petrol from N585 to between N855 and N890 per litre. Correspondents, who monitored the situation in Lagos metropolis, observed that in the midst of ongoing fuel shortages and crises, marketers swiftly updated their pump prices to reflect the new rates.

    NNPCL stations in Ikoyi, Victoria Island, Gbagada, Ikeja, and Ikorodu Road have adjusted their prices to N855 per litre. Major oil marketers such as Northwest, Mobil, TotalEnergies, and NIPCO are selling petrol between N868 and N900 per litre. Some motorists expressed frustration over the sudden price hike.

    Mr Godwin Emeka, a public transporter, said, “I am not happy about the price increase because those of us with limited means cannot afford it. I use the fuel for transportation, and a passenger from Orile to Oyinbo pays N100. I urge the government to address this sudden increase in petrol prices,” he said.

    A passenger, Mr Ibrahim Muyideen, also said that the price hike would negatively impact passengers.

    “We used to buy petrol at N619 per litre, and now it’s N868. The government should address this fuel scarcity and high prices, as everyone, regardless of their financial status, is suffering,” he said.

    It was observed that many marketers did not wait for their stock to deplete before adjusting prices, as they did during previous price reductions. Some private stations have set their prices at N897 per litre, the increase is said to align with global prices and alleviate NNPCL’s debt burden.

    This adjustment follows a recent disclosure by NNPCL that the company owes $6 billion to its suppliers. The Federal Government has denied claims that it directed NNPCL to set fuel prices at N1,000.

    Nnemaka Okafor, Special Adviser on Media and Communication to the Minister of Petroleum Resources, Heineken Lokpobiri, clarified that the government was addressing false claims circulating on social media about inflated petroleum prices.

    When contacted, Mr. Olufemi Soneye, Chief Corporate Communications Officer at NNPCL, declined to comment on the price increase but promised to provide updates when available.

    Fuel pump price hike: Motorists express frustration

    Many motorists in the Federal Capital Territory (FCT), have expressed frustration over increase in the pump price of petrol. NNPC Retail Management has approved upward review of the pump price of petrol from N617 per litre to N897 llitre, effective from Sept. 3. This is amid economic hardship and persistent fuel scarcity.

    Checks revealed that the NNPC retail stations immediately adjusted their pumps and totems (price boards), reflecting the new PMS price of N897 as against N617 per lite. The independent marketers have also adjusted their pumps as they are now selling between N930 and N1,200.

    Following the development, many commercial vehicles were off the roads as operators queued at the few filling stations selling the product. Many stations at Apo, Kubwa express way, airport road were not selling while long queues were seen at the few selling. Many commuters comprising civil servants were seen stranded at various bus stops, while motorists, who could afford to buy fuel from the black market increase transport fares.

    The motorists, who spoke to NAN expressed sadness about the situation, while calling for the Federal Government’s intervention on the persistent fuel scarcity and hardship on citizens. Alhaji Abdulaziz Isah, a businessman said the removal of the fuel subsidy with no proper plans in place had affected the oil and gas sector as well as the nation’s economy.

    “The dollars keep going high and it makes it difficult for the importers and marketers to buy petrol, this is because they need to sell as they buy to make their profit. If the government is not ready to make a lasting policy they should bring back the subsidy as a lot of citizens are suffering.” Isah said.

    A civil servant, Mr Aloze Ojo, said he had been in the filling  station since 7 a.m, and he was yet to get fuel.

    “We know it is not the government’s making but it should work on the roadmap to avoid any further problem. The hardship is too much, at times, I cannot go to work because there is no money for transportation and feeding is a bigger problem.”

    A taxi driver, Olusegun Ade said that things were so complicated presently, as they were battling with high cost of petrol and scarcity.

    “I run at a loss now, this is because I buy at a high cost and if I increase the transportation, some passengers nay not be able to afford it. My family depends on my daily returns and it has not been easy meeting up and with the latest increase I do not know what to do.

    “I am begging our president to do something fast on the suffering of Nigerians as it is not easy for a lot of us please,” Ade said.

    Mrs Rita Uka, a retired civil servant also urged the government to hasten its Compressed Natural Gas (CNG) project across the country to boost utilisation of CNG vehicles to crash transport fares. She said that over dependence on PMS was literally making it a scarce product, adding that when CNG becomes common, with its affordability and infrastructure nationwide, PMS would not be scarce anymore.

    A Bolt and Uber driver, Mrs Alice Uzo said that the harsh economic situation had increased occasioned by the lack of fuel as well as its high cost. She said that there was no more profit in the business as she had been driving at a loss just to sustain her means of livelihood.

    “I think I will just go home and sleep because this will be very hard, where are we going to? The president needs to do something urgently.”

    A correspondent, who monitored the City Centre and suburbs on Tuesday, observed that black marketers were making brisk business selling between N1, 500 and N2,000 per litre.

    Fuel pump price increase will hike food prices again– commuters, traders

    Some traders and commuters in the Federal Capital Territory (FCT) have frowned at the increase in the pump price of Premium Motor Spirit (PMS) by the NNPC Ltd. The commuters and traders, who spoke to NAN in Abuja on Tuesday, said the development would increase food prices which was gradually crashing and also the  sufferings of the masses.

    Mr Ignatius Ugwu, a civil servant, said the fuel pump price increase would further reduce the purchasing power of workers. He said the increase would hike transportation fares which would make it difficult for workers to resume work promptly and be productive. Ugwu appealed to the Federal Government to pay workers’ minimum wage and introduce other palliatives that would help cushion the effect of the increase on the masses.

    ”This information is very scary for a country like ours where people are struggling to eat even one good meal a day. This increase will make transport fare and other prices of goods and services to go up. The government should have been magnanimous enough to put some things in place before this increase. They should have paid minimum wage and other arrears, they should have brought out buses to help the masses because whether we like it or not, prices of things will go up, ” he said.

    Mrs Antonia Ogbede, a housewife, said the increase would automatically hike food prices which was gradually coming down. Ogbede said that traders would take the advantage of the fuel increase to also increase the prices of their goods. She said the spending burden would increase on her spouse who was the sole breadwinner of the family.

    ”I went to the market today and I saw some traders discussing about the fuel increase. I heard one of them making call for some goods to be delivered to him by the company he buys from and they told him that the price will increase by the end of the week. The trader ordered 100 cartons and he said he will sell them at increased price. The government should please help us before our breadwinners will develop sicknesses as a result of too much spending,” she said.

    Mrs Evelyn Otapu appealed to the Federal Government to consider its citizens first before some policies formulation. However, Mr Andy Kolapo, a driver, said that the increase would make the fuel queues to disappear.

    ”We heard that they (NNPCL) has been planning to increase the price of fuel to N1,000 per litre and this they have achieved. We hope that this will bring to an end the recurring queues in fuel stations,” he said.

    New pump price of petrol worrisome, unfair – NECA D-G

    The Nigeria Employers Consultative Association (NECA) says the new hike in pump price of Premium Motor Spirit (PMS),  also  known as petrol,  is worrisome and unfair. Mr Adewale-Smatt Oyerinde, the Director-General of NECA, said this in a statement while reacting to the new hike in pump price of PMS on Tuesday in Abuja.

    Recall that the Nigerian National Petroleum Company Ltd. (NNPCL) had said that with effect from Sept. 3, the new pump price of PMS would be N897 per litre.

    According to Oyerinde, the new pump price of petrol is not only worrisome but also unfair.

    “We had expected that the government will leverage on the momentum created by the completion of the Dangote refinery and the planned commencement of operation of the Port-Harcourt refinery. This is in order to clear the obvious self-inflicted pain on Nigerians and progressively reduce the pump price of petrol. This seems not to be the case. This new pump price could be seen as making Nigerians to pay for the crass inefficiency in the NNPCL,”he said.

    He said that rather than address the fundamentals that have made Nigeria a net importer of petrol, even when we have four refineries, government have continued to inflict pain on Nigerians. According to him,  the government is,  nadvertently, contributing to the increase in cost of doing business.

    “We advise that government should have a rethink and do all that is necessary to address the continuous impoverishment of Nigerians and incapacitation of organised businesses,” he said.

    New PMS pump price will push more Nigerians into poverty – Economist

    An Economic Expert, Dr Sand Mba-Kalu says the fuel price hike by NNPC Ltd. from N617 per litre to N897 litre will push more Nigerians into poverty. The expert said the sudden increase in Premium Motor Spirit (PMS) pump price by the Nigerian National Petroleum Company Limited (NNPC Ltd.) was beyond a simple fuel price adjustment.

    He said that it would have a far-reaching impact on Nigeria’s private sector, trade and the already suffering Nigerian masses. Mba-Kalu, the Executive Director, Africa international Trade and Commerce Research said this in an interview on Tuesday in Abuja. while reacting to the development.

    NNPC Retail Management has approved upward review of the pump price from N617 per litre to N897 llitre, effective from Sept. 3, amidst economic hardship and persistent fuel scarcity. Checks by NAN revealed that the NNPC retail stations have adjusted their pumps and totems (price boards), reflecting new PMS price of N897 against N617 per litre while independent marketers are selling between N930 to N1,200.

    Mba-Kalu said without government interventions, the economic and social repercussions of this price hike could be severe and long-lasting, pushing more people into poverty.

    “What we will witness is the immediate high cost of transport, which will lead to higher costs of food and inflation. In the long term, it could pose challenges for small and medium-sized enterprises (SMEs) and the agricultural sector,” the expert said.

    He urged the Federal Government to acknowledge these implications and consider measures to reduce the impact, such as targeted incentives for energy efficiency, stopping wasteful spending, and reducing cost of governance.

    “Without such interventions, the economic and social repercussions of this price hike could be severe and long-lasting, pushing more people into poverty,” he warned.

    Mr Chris Nzeh, a motorist, who condemned the development, describing it as crazy, said what had been going on in Nigeria under the current government would only suffocate Nigerians.

    “How do they want the average man to survive? We were told that with the removal of fuel subsidy, fuel will be available everywhere in Nigeria, but today, it appears NNPC Ltd. is scamming Nigerians.

    “They are the sole importer of petroleum and they have refused to make refinery work and you ask yourself what is going on in Nigeria. Nigerians should rise and save this country from collapse,” he said.

    Petrol price hike unavoidable, eases subsidy burden – Stakeholders

    Some stakeholders in the oil and gas industry, on Tuesday, said that the increase in the petrol pump price was unavoidable. The experts disclosed in Lagos that the price hike would help alleviate the subsidy burden on both the Federal Government and Nigerian National Petroleum Company Ltd. (NNPCL).

    Mr Henry Adigun, an oil and gas consultant, said that while the price increase was a step towards addressing the subsidy issue, it did not resolve the need for total deregulation of the downstream petroleum sector.

    “Unless market prices align with international product prices, NNPCL will remain the sole importer,” Adigun explained.

    He welcomed the commencement of petrol production by Dangote Refinery, but noted that Dangote’s supply would hinge on favourable market conditions. Adigun also emphasised the need for collaboration with marketers, as direct loading from the gantry might not be feasible for many distributors.

    Mr Ukadike Chinedu, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said that NNPCL had not officially informed marketers about the price increase.

    Chinedu said that depot owners and marketers were awaiting further directives from NNPCL. He expressed optimism that Dangote Refinery’s entry into the market would enhance product availability and address scarcity issues.

    “I anticipate that Dangote will increase the supply of petrol and automatic gasoline oil in the Nigerian market. Marketers should be allowed to purchase products from Dangote and compete with NNPCL,” Chinedu added.

    He said that availability was crucial, but noted that competition would follow.

    Dr Ayodele Oni, Partner at Bloomfield Law Practice, described the price increase as unfortunate but reflective of market realities. Oni questioned whether the new price covers all costs and provides a sufficient margin.

    “If the new price is market-driven and covers all costs, it will be effective. Otherwise, we may face the same issues,” he said.

    Oni noted that the Petroleum Industry Act (PIA) encourages market pricing rather than monopoly. He suggested that while availability might improve, prices were unlikely to decrease significantly.

    An anonymous marketer told NAN that NNPCL had raised the petrol price to N855 per litre, while private operators were expected to purchase fuel at an ex-depot price of N950 per litre.

    He said that the retail price at private filling stations could exceed N1,000 per litre when dealer margins, transportation, and union fees were included. The marketer added that the increase was reportedly intended to encourage Dangote Refinery to start petrol production, which began on Tuesday.

    He explained, “With a landing cost of N1,118 per litre, NNPCL can no longer sustain selling fuel below this cost. NNPCL did not consult with marketers about this development.”

    It was observed that filling stations across Lagos have adjusted their prices to reflect the current rates. NNPCL stations are selling at N855 per litre, while major marketers are pricing their fuel between N868 and N900 per litre, compared to previous rates of N585 and N619 per litre, respectively.

  • Fuel price hike: NANS announces nationwide protest, September 15

    Fuel price hike: NANS announces nationwide protest, September 15

    Following the new pump price announced by the Nigerian National Petroleum Company (NNPC), the National Association of Nigerian Students (NANS) has announced a nationwide protest, slated for September 15, 2024, across major cities in Nigeria.

    According to NANS, “the protest, tagged ‘Fuel Price Hike: A Threat to Our Future,’ will take place on September 15, 2024, across major cities in Nigeria.”

    This announcement was made on Tuesday in a statement signed by NANS National Senate President, Comrade Henry Okunomo. He stated that NANS is “appalled and disheartened by the recent announcement of yet another hike in fuel prices by the NNPC.”

    Furthermore, the statement issued a clarion call for a nationwide protest against what it described as an “egregious act.”

    “We demand an immediate reversal of the fuel price hike and a more compassionate approach to governance. We urge all Nigerian students, civil society organizations, and the masses to join us in this peaceful demonstration as we demand an immediate reversal of the fuel price hike and a more compassionate approach to governance,” Okunomo said.

    According to him, “We shall not be silenced, and we shall not be intimidated. We shall rise in unison to demand a better deal for Nigerian students and the masses.”

    He further disclosed that “This latest development is the proverbial straw that breaks the camel’s back, as it has become patently clear that the NNPC, under the leadership of its Director-General, Mele Kyari, has failed woefully in its primary responsibility of ensuring a stable and affordable fuel supply.”

    Since his appointment, Mr. Kyari has presided over a regime of unrelenting fuel price increases, with each hike further exacerbating the suffering of the masses. This, Okunomo argued, is a clear indication of Kyari’s “gross incompetence and inability to deliver on his mandate.”

    “The NNPC, under his watch, has become a behemoth of inefficiency, perpetuating a cycle of hardship and despair for the Nigerian people,” he added.

    NANS, therefore, demands the immediate removal of Mr. Mele Kyari as the Director-General of the NNPC. “His continued stay in office is an affront to the sensibilities of the Nigerian people and a stark reminder of the government’s insensitivity to their plight,” the statement concluded.

  • FG denies asking NNPC to hike price of petrol to N1000 per litre

    FG denies asking NNPC to hike price of petrol to N1000 per litre

    Senator Heineken Lokpobiri, Minister of State Petroleum Resources (Oil) has said that no directive was issued to the Nigerian National Petroleum Company (NNPC) Limited to increase petroleum prices to N1,000.

    Lokpobiri in a statement on Tuesday issued by his Special Adviser, Media and Communication, Nnemaka Okafor, said he did not direct NNPC Limited or any other entity within the sector to manipulate prices.

    “The Federal Government has been compelled to address the outright falsehood and malicious claims currently circulating on social media.

    “We categorically condemn these claims as baseless, malicious, and a deliberate attempt to incite public discontent.

    “We challenge anyone in possession of any evidence-be it written documents, audio, or video recordings-that supports these fabrications to make it public.

    “Such a claim is entirely devoid of truth and should be recognised as an intentional effort to mislead the public,” he said.

    He explained that the NNPC Ltd. operates as an independent entity under the Companies and Allied Matters Act (CAMA), with a fully empowered Board of Directors and the Ministry of Petroleum Resources does not, and will not interfere in NNPC Ltd.’s internal decisions, including pricing matters.

    “Any suggestion otherwise is not only incorrect but also reveals a profound misunderstanding of the deregulated nature of Nigeria’s petroleum sector,” he said.

    He advised the public to dismiss these malicious rumours.

    “Any claim to the contrary is nothing more than an ill- conceived attempt to sow discord and confusion.

    “We urge all Nigerians to remain vigilant and rely solely on information from verified and official channels,” she said.

  • BREAKING: Our petrol will be out in filling stations in next 48 hours – Aliko Dangote

    BREAKING: Our petrol will be out in filling stations in next 48 hours – Aliko Dangote

    Founder, Chairman and Chief Executive Officer (CEO) of Dangote Group, Aliko Dangote has disclosed that petrol from the Dangote Refinery will be out in filling stations across the country in the next 48 hours.

    TheNewsGuru.com (TNG) reports Dangote made this disclosure on Tuesday, while, however, noting that the availability of petrol from the refinery is dependent on the Nigerian National Petroleum Company (NNPC) Limited.

    Dangote stressed that as soon as the $20 billion refinery located in Lagos State, Nigeria finalised modalities with NNPC Limited, the product will hit the market within the next 48 hours.

    “Our PMS (Premium Motor Spirit) can be in filling stations within the next 48 hours, depending on NNPCL,” Dangote said.

    Recall that the  650,000 bpd capacity Dangote Refinery refinery began operations in January with the production of diesel and aviation fuel.

    Dangote said the petrol from the plant can compete with products from other parts of the world in terms of quality.

    When asked on the pricing of petrol from his refinery, Dangote said: “It is an arrangement which is designed and approved by the Federal Executive Council led by His Excellency, President Bola Ahmed Tinubu.

    “As soon as it is finalised, which he (Tinubu) is pushing, once we finish with NNPC, it can be today, it can be tomorrow, we are ready to roll into the market.

    “The quality here will match that of anywhere in the world; US, America, we will make sure that nobody will beat us in terms of quality”.

  • Fuel scarcity: What we expect from FG – Experts

    Fuel scarcity: What we expect from FG – Experts

    Some experts in the oil and gas sector have spoken on their expectations from the federal government as the prevailing fuel scarcity has refused to yield to any intervention and also in the light of the recent announcement by the NNPC.

    The experts in separate interviews urged the federal government to collaborate with local refineries to process the daily allocation of 445,000 barrels of crude oil for domestic use, based on a tolling arrangement.

    Speaking on Monday in Lagos State, Mr Rabiu Bello, Senior Independent Non-Executive Director at Seplat Energy Plc., said that collaborating with local refineries would help the government to secure  petroleum products needed for domestic consumption and allow export of excess products.

    Bello said that such a collaboration would enable the Dangote Petroleum Refinery and other local refineries to operate profitably and achieve over 65 per cent capacity utilisation without requiring substantial additional investments in crude oil supplies.

    He added that the Federal Government should conduct a forensic audit of NNPC/NNPCL’s financial records to determine the actual cost of importing and delivering petroleum products to Nigeria from 2012 to 2024.

    Mr Tunji Oyebanji, a member of the Major Oil Marketers Association of Nigeria, advocated full implementation of the Petroleum Industry Act (PIA). He said that full implementation of PIA would allow market forces to determine petrol price and reduce  financial burden on  importers and local refineries.

    “Selling below cost is not sustainable. If prices are set at an economic level, other suppliers might enter the market, improving supply and reducing financial strain,” he said.

    Mr Henry Adigun, an oil and gas consultant, also called for full implementation of the PIA to streamline operations in the downstream  sector of Nigeria’s petroleum industry.

    Adigun said that the  current fuel scarcity could be mitigated if the government  could pay outstanding debts to importers and allow fuel prices to return to market levels.

    Mr Olufemi Soneye, Chief Corporate Communications Officer at NNPC Ltd., had, on Sept. 1, acknowledged that the company was facing financial strain due to high cost of  petrol also known as Premium Motor Spirit (PMS). He said that the increased cost was affecting sustainability of fuel distribution.

    Soneye gave the assurance that NNPC Ltd. remained committed to its roles and was working with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products.

    Correspondents who monitored the fuel situation within Lagos metropolis report that fuel price has surged as scarcity worsens. Many filling stations on Ikorodu Road, Agege, Iyana-Ipaja, Ikeja, Somolu, Bariga, Ogba and Surulere were closed due to petrol shortage. Also, long queues characterised few filling stations selling the product.

    Meanwhile, some motorists have expressed frustration at the persistent scarcity of PMS. They also decried the long queues at filling stations as well as increased black market sale of the product.

    At Ikorodu, Epe, Badagry, and Ibeju-Lekki, a litre of petrol sold for  N940  and above on Monday. A Mobil  filling station at Abule Egba sold petrol  for up to  N700 per litre.

    Mr Adesanya Tunde,  Manager at Mobil Station at Abule Egba, told NAN: “We couldn’t get enough supply, which is impacting  our business and our customers. We are doing our best to manage the situation, but it is challenging”.

    Mr Abiodun Ayeni,  a Manager at a Conoil  Station, blamed the increase in PMS pump price on scarcity of the product.