Nigerians have been advised to brace for more fuel scarcity following the recent hike in the pump price of the product.
The Executive Vice President of Nigerian National Petroleum Company Limited (Downstream), Adedapo Segun, said this while speaking on Thursday on a national TV program.
Scarcity: NNPC constitutes economic danger, sell it
He emphasised the need for a perfectly competitive market to ensure stable fuel prices and supplies in Nigeria.
Details shortly…
Some energy stakeholders have berated the Nigerian National Petroleum Company Ltd. (NNPCL) over delay in getting the Port Harcourt Refinery operational, to address recurrent fuel scarcity and price hike.
The stakeholders spoke to NAN on Wednesday in Abuja against the backdrop of the unending fuel queues at filling stations across the country and the increase in price of petrol.
Dr Orji Ogbonnaya Orji, the Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), faulted the NNPC Ltd. for failure to update the public on the exact status of the refinery.
Recall that the NNPC Ltd. had postponed the much anticipated commencement of the Port Harcourt refinery for six times.
This had raised concerns about local production of petroleum products, particularly Premium Motor Spirit (PMS), to meet the needs of Nigerians.
Initially slated to commence operations in 2021, the refinery’s commencement had faced multiple delays, making Nigerians to raise concern on the actual position of the refinery..
In December 2023, NNPC Ltd. claimed it had achieved the mechanical completion of rehabilitation work on Area 5 Plant of the refining company and slated its production resumption for Jan. 2024.
The January date also turned out a mirage, with each postponement attributed to various technical, financial, and logistical challenges
Recently, the NNPC Ltd. said its primary producing unit called Close Distillation Unit (CDU) was working, and would be getting off-spec production in days.
Specifically, the oil company said the refinery would come on stream and its oil production would be fit for distribution after certification by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in September.
Oriji underscored the need for consistent and clear updates on the refinery’s progress to foster trust and manage public expectations.
He assured that NEITI would update Nigerians on the rehabilitation of the refinery and the cost in its ongoing 2022/2023 industry report to be published in September,
According to him, the previous NEITI reports revealed that N200 billion has been expended between 2020 and 2021 on the turnaround maintenance of the refinery during the period.
Orji recalled that he led a team which included officials of NEITI and the Civil Society Organisations (CSOs), as well as media representatives on assessment tour of the refinery in April.
“For us in NEITI, we do not depend on speculation, rather we depend on data.
“Our last report showed that over N200 billion was spent on the refinery and it hasn’t started working, so we decided to embark on the trip.
“From our assessment, impressive work was going on in the refinery. There was an issue of test running of which the NNPC Ltd. described as a painstaking exercise,” he said .
Dr Benjamin Tamaramiebi, the National President, Host Communities of Nigeria Producing Oil and Gas (HOSTCOM) also expressed dissatisfaction with the NNPC Ltd. on its handling of the Port Harcourt refinery repairs.
He decried the situation whereby Nigeria, for more than 25 years, had been importing fuel, adding, “its high time it stopped”.
Tamaramiebi called for concerted efforts and commitments to ensure that the refinery become operational.
He also underscored the need for the government to encourage and support the Dangote Refinery to start refining in order to stop importation of the product.
Speaking in the same vein, Dr Sand Mba-Kalu, an Economic Expert underscored the need for clear, regular updates on the progress of the refinery’s rehabilitation to foster public trust.
Mba-Kalu, the Executive Director, Africa International Trade and Commerce Research, said swift action was required to ensure timely completion of the rehabilitation of the refinery.
“The government and NNPC Ltd. seem not to be telling Nigerians the truth about the refinery,
“The shortage and high cost of petroleum products continue to burden households and businesses nationwide.
“The delay has stifled potential economic growth, job creation, and industrial development that could have stemmed from a fully operational refinery,’’ he said.
The expert said effective management of resources was crucial to guarantee the long-term viability and efficiency of the refinery.
He added that immediate measures should be implemented to mitigate the high cost and scarcity of fuel to ease the burden on Nigerians.
According to him, the development of additional refineries and a comprehensive strategy for the petroleum sector is essential for future stability and growth.
A business man, Mr Akinola Oladapo lamented how the high price of fuel had stalled his business, adding that Nigerians were tired of the inconsistency of the NNPC Ltd. on the refinery’s commencement date.
“it looks as if the management of the NNPC Ltd. is not sincere with Nigerians.
“Nevertheless, they have set September for the refinery to start production. Let’s see if its the usual games they play or they are serious this time.
“But one thing is clear; you can’t take Nigerians for a ride for too long,” he said.
Located at Alesa Eleme, the Port Harcourt, complex operates two oil refineries, including an old plant commissioned in 1965 that can process 60,000 barrels per day, and the new plant commissioned in 1989, which has a capacity of 150,000 barrels per day.
Bayo Onanuga, Special Adviser on Information and Strategy to President Bola Tinubu, has revealed that the Nigerian National Petroleum Company Limited (NNPCL) Limited admitted to having financial constraints because it can no longer subsidise petrol.
Onanugu said this in a post on X on Tuesday.
According to him, if the NNPCL continues to pay the difference between the landing cost and petrol price, the national oil company will go bankrupt.
Onanuga said NNPC’s debt was a result of the company’s efforts to absorb rising petrol costs and protect Nigerian consumers, rather than any government deception.
“NNPC cried out recently because it can no longer sustain the price differential on its balance sheet without becoming insolvent,” he said.
“The situation has greater implications for the ability of the three tiers of government to function as the NNPC has failed to pay into the Federation Account, the money that should go to the government.
“There are no easy choices. Something must be done to make NNPC survive and keep the engines of government running and petrol flowing at the pumps.
“That is the scenario that is unfolding, and the game changer and big relief giver may well be the Dangote refinery and other local refineries, which will become the fuel suppliers to the local market.
“When Dangote Refinery and other refineries, including government-owned Port Harcourt Refinery, come fully on stream, our country and economy will benefit on all fronts. There will be many good paying jobs that will be created along the value chain.”
According to Onanuga, there will also be a drop in the huge demand for foreign exchange to import petroleum products.
Tinubu government did not lie about fuel subsidies
I have read a series of articles attacking the Federal Government for not telling the truth about fuel subsidy payments, following NNPC Limited’s admittance it was owing suppliers some $6 billion.”
Earlier, the NNPCL increased the price of petrol to N855 per litre, but the landing cost of the Premium Motor Spirit (PMS) was around N1,200.
The Nigerian National Petroleum Company Limited, NNPCL, has agreed to sell crude oil to Dangote Petroleum Refinery in Naira.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA) revealed this via its X handle, @NMDPRA_Official.
According to NMDPRA, the NNPCL reached an agreement to commence crude oil sale and supply to Dangote Refinery in local currency.
The agency also said the refinery was determined to supply an initial 25 million litres per day of the Premium Motor Spirit (PMS) into the domestic market in September 2024, adding that the refinery will increase the volume to 30 million litres per day in October.
“The refinery is now poised to supply an initial 25 million litres of PMS into the domestic market this September. And will subsequently increase this amount to 30 million liters daily from October 2024. ”
The increase in the price of Premium Motor Spirit (PMS), commonly known as petrol by the Nigerian National Petroleum Company Limited (NNPCL) has stirred several reactions from Nigerians on social media.
TheNewsGuru.com(TNG) had earlier reported that NNPC adjusted its pump prices to ₦904 per litre, with several filling stations across the country selling at ₦1,200 per litre.
The surge in fuel prices has led to long queues at various NNPCL outlets across the country, where customers are scrambling to fill their tanks.
The situation has also sparked concerns across social media, with many Nigerians expressing worry over the potential impact on transportation costs and the prices of goods and services, which are likely to rise.
Egungun of Africa: “NNPC is now selling above 800 per liter; that means other stations will sell double that price. No matter which party you support, we will all learn politic the hard way. Ire o.”
Communicator wrote: “Fuel for N1500/liter?? NNPC 800+ if you visit me and i on Gen.. Just know sey you go collect- whether yu be man or woman.”
Isah Muhammad said, “Where are we heading to in this country? How do we survive now? It’s very unfortunate we are witnessing this.”
Another Nigerian Ibrahim Saleh, said, “I can recall when I used to sell petrol (black market). It was then ₦95. One day during the late President Shehu Musa Yar’adua regime, we went to buy fuel and they halted the process.
“We all thought it was going to be increased but they adjusted the litre to ₦65. It was something that I would never forget in my life. When things go up, they never come down in Nigeria and since then it has been like that.”
iamkingdinero1 wrote: “The people that voted cause he’s their “ brother “ are buying for 86 naira per liter.”
steeze.hq wrote: “Instead of standing up now see how we turn it to cruise. Mumu backwards cruise country. Sufferiinside cruise Mumu people!!”
cattyfy22 wrote: “I just want to hear how his supporters will campaign for him in the next election. I chop abuse that time on facebook no be small. When I was encouraging them to look beyond tribe.”
adeshina1170 wrote: “Thank God say I rugged buy and installed inverter and solar panels then o, wetin concern me with gen.”
cyril_unusual wrote: “Tbh …. I heard the people that voted their brother are buying for ₦100/liter..”
The Federal Government has denied a report that the Ministry of Petroleum Resources had ordered the Nigerian National Petroleum Company Limited NNPCLto sell fuel at ₦1,000 per litre.
In a statement signed by the Special Adviser, Media and Communication, to the Minister for Petroleum Resources (Oil), Heineken Lokpobiri, Nnemaka Okafor, on Tuesday said the FG declared that the report was concocted and ill-conceived to sow discord and confusion in the oil industry.
The report claimed that Lokpobiri gave the NNPCL the directive.
However, the minister stressed that the FG had never interfered with petroleum pricing with NNPCL.
“The Federal Government is compelled to address the outright falsehoods currently being circulated on social media, which claim that the Minister of Petroleum Resources (Oil), Senator Heineken Lokpobiri, has directed the Nigerian National Petroleum Company Limited to inflate petroleum prices above the approved pump price.
“We categorically condemn these claims as baseless, malicious, and a deliberate attempt to incite public discontent. We challenge anyone in possession of any evidence written documents, audio, or video recordings-that support 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. It must be stressed that NNPCL operates as an independent entity under the Companies and Allied Matters Act, with a fully empowered Board of Directors.
“The Ministry of Petroleum Resources does not, and will not, interfere in the internal decisions of NNPCL, 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.”
Dangote Refinery Plc has commenced production of petrol, marking a significant milestone for Africa’s largest refinery after delays due to recent crude shortages.
The refinery, built by Africa’s richest man, billionaire Aliko Dangote, began operations in January, initially producing naphtha and jet fuel.
The Nigerian National Petroleum Corporation (NNPC), which has been struggling to meet local fuel demand, will be the sole buyer of the gasoline processed by the Dangote Refinery.
The NNPC disclosed on Sunday to be under severe financial strain, owing $6 billion to oil traders for supplies since January.
The debt burden has impacted its ability to maintain a steady supply of fuel in the local market, resulting in persistent fuel queues since July and a sharp 45% increase in fuel prices from the official rate of N617 ($0.3942), following the removal of subsidy May 29, 2023 by President Bola Tinubu.
The $20 billion Dangote Refinery, located on the outskirts of Lagos, has the capacity of 650,000 barrels per day and is poised to significantly reduce Nigeria’s dependency on imported oil products.
Director for Sub-Saharan Africa at political risk consultancy Horizon Engage, Clementine Wallop, noted the refinery’s petrol production could not have come at a more critical time.
“The news that Dangote is processing gasoline couldn’t come at a more crucial time given NNPC’s statement about its difficulties securing imported supply due to financial strain,” she stated.
“This prompts the question of how NNPC will manage purchasing from Dangote, and impresses the need for greater transparency in its finances,” Wallop said.
The Dangote Refinery’s gasoline production is expected to alleviate some of the supply challenges faced by the NNPC.
The Nigerian National Petroleum Company Limited says it is seeking to engage reputable and credible Operations and Maintenance companies, to operate and maintain the Warri Refining and Petrochemical Company and the Kaduna Refining and Petrochemical Company.
This was disclosed in a statement on Friday on its official X handle.
The Warri refinery located at Warri in Delta State was commissioned in 1978. Warri is a complex conversion refinery with a nameplate distillation capacity of 6,250,000 MTA (125,000 bpd). The refinery complex includes a petrochemical plant commissioned in 1988 with production capacities of 13,000 MTA of polypropylene and 18,000 MTA of carbon black. The refinery is meant to supply markets in the south and southwest regions of Nigeria.
On its part, the Kaduna refinery was commissioned in 1980 to supply petroleum products to Northern Nigeria with a capacity of 50,000 B/D. In 1983, the capacity was expanded to 100,000 B/D by adding a second 50,000 B/D crude train dedicated to the production of lubricating oils (lubes). In 1986, the capacity of the first crude train was expanded to 60,000 B/D. The expansions have increased the current nameplate capacity of the refinery to 110,000 B/D.
The Nigerian National Petroleum Corporation Ltd. has blamed the fuel scarcity that has led to long queues in filling stations nationwide due to recent rains, lightning, and thunderstorms.
NNPCL’s vice-president (downstream), Dapo Segun, disclosed this at a press conference at the NNPC towers in Abuja.
Fuel queues have resurfaced in filling stations across the country, with car owners spending long hours in queues and black markets having a field day with fuel now being sold for as much as over N1,000.
Apologising to Nigerians for the queues springing up across the country and noting that the NNPC will not like to make excuses, Mr Segun, on Tuesday, said the recent weather conditions hampering the sufficient distribution of fuel across the country is beyond the control of the corporation, but assured that all will be done to manage the situation.
“We’ll like to apologise to Nigerians for the queues we’ve been seeing springing up. A number of the causes are outside of our control but we’ll do our best to manage. We do not like to make excuses,” Mr Segun stated. “For example, since the rains began, the Estragos channel has been difficult to navigate through. We have vessel after vessel going around there because of siltation, and that has really hindered our ability to bring petroleum products, particularly PMS, up country.”
The NNPCL executive added, “We also understand that with the rains also, situations where to discharge petroleum products where there is lightning, thunderstorms, you have to suspend, not just the discharge of petroleum products onshore but also, the evacuation from the tankers. We’ve had situations that have occurred in recent times.
We’ve also had issues with the road network. That also gives challenges in bringing these products upcountry. The tightness you see in Lagos currently was due to a very short supply gap, which has since been redressed. Vessels are in Lagos now, offloading and discharging as I speak. So, that is definitely short-lived.”
Mr Segun vowed that despite the number of factors creating the nightmarish situations, no stone will be left unturned in ensuring that petroleum products get to all nooks and crannies in the country.
The Senate Committee on Public Accounts on Tuesday, took a swipe at managements of the Nigerian National Petroleum Company Limited (NNPCL) and other agencies.
This is for their persistent refusal to respond to queries raised against them in the 2019 Audit report.
Chairman of the committee, Sen. Ahmed Wadada (SDP-Nasarawa West) made this known while speaking to newsmen in Abuja.
He decried the attitude of the agencies for failing to respond to queries raised against them in the 2019 audit report.
Wadada said that going forward, any agency that refused to honour invitation to defend its queries would have its queries sustained and reported to the senate in plenary by the committee.
He said the attitude of the affected public agencies on persistent refusal to respond to queries against them in audit report was frustrating and detrimental to aspirations and goals of the President Bola Tinubu-led government .
According to him, apart from NNPCL, Federal Inland Revenue Service (FIRS) and the Police, other heads of agencies involved in the habit of not honouring invitations include the Office of the Accountant General of the Federation.
“Nigeria Mining Cadastre Office, Nigerian Upstream Petroleum Regulatory Commission (former DPR) and Federal Ministry of Industry, Trade and Investment.”
Others, he said, were FCT Internal Revenue Service, Nigeria Immigration Service, Federal Ministry of Women Affairs, Ministry of Defence, Nigeria Communications Satellite Limited etc.
He said: ” It is worthy to state that the committee commenced the consideration of the Audit Report in October 2023, with a view to presenting its report to the Plenary.
“However, some agencies have willfully failed to honour invitations to defend their written responses to the audit queries as submitted to the committee’s secretariat.
“Beside the demand for submission of written responses to audit queries, part of the committee’s rules of engagement requires that accounting officers attend its public hearing.
“This is to respond to questions arising from the analysis of their submissions which in turn, forms a basis for informed decision on the matter by the committee.
“The committee is very displeased with the attitude of foot dragging by agencies who are by law, expected to respond to parliamentary invitations and account for their actions.”