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Tag: refineries

  • Nigerian troops recover N2billion worth of stolen petroleum products in 14days

    Nigerian troops recover N2billion worth of stolen petroleum products in 14days

     

    Troops of operation DAKATAR DA BARAWO have recovered over two billion naira from stolen petroleum products in Southern Nigeria within two weeks.

    The Director of Defence Media Operations, Major General Musa Danmadami disclosed this during the Bi-weekly briefing in Abuja, Nigeria’s capital saying that the briefing covered the period from 20th October to 3rd November, 2022.

    General Danmadami said that “troops in the sustained fight against oil theft and maritime illegalities also discovered and destroyed 11 illegal refineries and 107 metal storage tanks, 5 wooden boats, 58 dugout pits, 38 ovens, 6 fibre boats, 28 reservoirs, 15 jerrycans, 2 pumping machines, 20,000 barrels of crude oil and 167,900 litres of Automotive Gas Oil”.

    Cumulatively, within the weeks under review, oil thieves were denied a total of 54,547 barrels of crude oil, 817, 900 litres of Automotive Gas Oil, 5,000 litres of Premium Motor Spirit and 10,000 litres of Dual Purpose Kerosine amounting to the sum of Two Billion, Four Hundred and Thirty-Five Million, Twenty-One Thousand, Three Hundred Forty-Three Naira and Ninety-Four Kobo (N2,435,021,343.94)

    In a related development, troops of the Joint Task Force, Operation DELTA SAFE sustained pressure towards denying criminal elements freedom of action, essential to sustain a conducive environment for economic activities to thrive while ensuring relative peaceful environment and protection of oil and gas infrastructure in the general area all in the Southern part of the country.

    According to him, the maritime and land component of Operation DELTA SAFE in the conduct of operation OCTOPUS GRIP, conducted operational activities at creeks, waterways, communities, villages, towns and cities within Delta, Bayelsa, Cross River and Rivers States between 20 October – 2 November 2022.

    He said“during the operations, troops discovered and destroyed 57 illegal refining sites, 35 wooden boats, 304 storage tanks, 172 cooking ovens, 12 dugout pits, 5 drums, 2 reservoirs, 2 illegal bunkering camp and 6 illegal bunkering boats”.

    He added that troops also recovered 34,547barrels of crude oil, 650,000 litres of Automotive Gas Oil, 5,000 litres of Premium Motor Spirit, 10,000 litres of Dual Purpose Kerosine, 7 pumping machines, 7 vehicles, 5 motorcycles, 1 double barrel gun, 2 live cartridges and arrested 5 pipeline vandals.

    General Danmadami noted that troops in conjunction with operatives of the office of the National Security Adviser (ONSA) tracked and raided the criminals location and arrested 2 Eastern Security Network criminals kingpins at Oyigbo in Oyigbo Local Government Area of Rivers State.

    He said “troops recovered 2 Ak47 rifles, 285 rounds of 7.62mm special, 84 rounds 7.62mm NATO, 1 empty magazine, 2 mobile phones, 3 sim packs, a file containing documents, 3 ATM cards, NIN certificate, voters’ cards and charms.

    According to him, in a continuous effort to eliminate criminal elements in the South Eastern part of the Country, troops and other security agencies have not relented on their constitutional mandate in tackling insecurity in the state.

    Notably, on 20 October 2022, troops while on duty at Isuofia in Aguata Local Government Area of Anambra State were attacked by suspected Indigenous People of Biafra/Eastern Security Network criminals.

    He said the troops however, repelled the attack and arrested 1 of the criminals, recovered 2 pistols and 4 rounds of 9mm ammo.

    Also on the same day, following a tip-off, troops arrested a known armed robber at Ibagwa community in Igbo-Eze Local Government Area of Enugu State.

    He said troops recovered 1 locally made revolver pistol, 2 mobile phones and 1 motorcycle. Suspect is in troops custody for further action.

    Also, on 24 October 2022, troops and Nigerian Police personnel on fighting patrol around Nkwere forest in Oji-River Local Government Area of Enugu State came in contact with suspected Indigenous People of Biafra/Eastern Security Network criminals mounted on SUVs and motorcycles, who fled on sighting troops.

    According to him, troops pursued the criminals and engaged with superior fire, forcing them to abandon their vehicles and motorcycles adding that troops exploited the area and recovered 2 SUV vehicles, 3 motorcycles, cooking utensils amongst others.

    All recovered items are in troop’s custody for further necessary action.

    In another development between 21 October to 2 November 2022, troops conducted anti-illegal bunkering operation to Ama-Hausa Arugu and Umuokabia Ugodo villages in Ngor Okpala Local Government Area of Imo State. During the operation, troops discovered and destroyed illegal bunkered oil in 79 sacks of 50 litres Automotive Gas Oil each, 8 gallons of 25 litres, 3 nylons with 3 drum containing refined products, arrested a bus and 2 suspects conveying illegal refined Automotive Gas Oil and 1 Toyota Avalon containing 1,200 litres of Automotive Gas Oil.

    He added that troops also discovered a loading point in an abandoned filling station with 3 vehicles containing 1,400 litres each of diesel and 2 tanks containing 1,000 litres each of diesel.

    Furthermore, troops conducted a clearance operation at the Indigenous People of Biafra/Eastern Security Network Camp at Amu Agba community in Ishielu Local Government Area of Ebonyi State and made contact with the criminals who fled following a fire fight. Troops exploited the area and recovered 4 motorcycles, 32 rounds of 5.56mm, 1 round of 7.62mm NATO, 1 locally fabricated pistol, 1 dane gun and 4 IEDs amongst others.

    Also on 27 October 2022, troops in conjunction with Nigeria Police and Department of State Service conducted clearance operation on the Indigenous People of Biafra/Eastern Security Network camp at Orsumoghu village in Ihiala Local Government Area of Anambra State.

     

    According him, troops made contact with criminals and in a fire fight neutralized 5 criminals, arrested 2 and recovered 1 Ak47 rifle, 2 rounds of 7.62mm special, 1 dane gun, 4 locally fabricated composite IED, 1 single barrel rifle, 15 locally fabricated mortar tubes, 1 pistol hoister, military uniforms, 1 motorcycles, 1 power generating set among others.

     

    Meanwhile, the Military High Command has commended the troops on their efforts in the various theatres of operation across the nation while the entire populace is appreciated, for the support given to the Armed Forces and other security agencies in the conduct of their operations.

  • Poor state of refineries: Reps threaten to arrest Petroleum Minister, others after 7days

    Poor state of refineries: Reps threaten to arrest Petroleum Minister, others after 7days

    The House of Representatives Ad hoc Committee investigating the state of refineries in Nigeria has issued a 7-day ultimatum to the Minister of State for Petroleum to appear before the committee or risk the wrath of the law.

    The Chairman of the committee, Rep. Ganiyu Abiodun (APC-Lagos state) issued the ultimatum at a press conference on Thursday in Abuja.

    Also to appear before the committee is the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC) and the General Managers of the refineries in Port Harcourt, Warri and Kaduna.

    Abiodun said the committee was forced to issue the ultimatum following failure of the officials to honour three invitations earlier sent to them.

    “We are compelled to hold this press conference because of the continued refusal and flagrant disregard of the GMD of the NNPC, the minister of state for petroleum resources and the general managers of Port Harcourt, Warri and Kaduna refineries to the invitations to appear before the committee.

    “We consider this continued refusal and negligence to appear before the committee as disrespect to the Leadership of the National Assembly of the Federal Republic of Nigeria.

    “The committee is worried that the Port Harcourt Refining Company (PHRC), Warri Refinery and Petrochemicals Company (WRPC) and Kaduna Refinery and Petrochemicals Company (KRPC) had all been operating at gross losses since 2010 before they were finally shut down in 2019.

    “This committee has the mandate of the house of representatives and the constitutional responsibility to demand accountability from those in positions of managing our resources.

    “It is worrisome that the GMD of the NNPC, the ninister of state for petroleum resources and the general managers of Port Harcourt, Warri and Kaduna refineries have refused on three invitations to appear before the committee to account for the billions of dollars spent on the rehabilitation of the refineries over the years.

    “As chairman of this honourable committee, I hereby summon the GMD of the NNPC, the mnister of state for petroleum resources and the general managers of Port Harcourt, Warri and Kaduna refineries to appear before the committee on Thursday, April 28, 2022 to avoid legal, constitutional and parliamentary measures to be taken against them in order to compel them to appear,” he said.

    The rep said the committee was aware that the NNPC recently awarded contracts for rehabilitation of refineries in the following sums: WRPC 900 million dollars, PHRC 1.5 billion dollars and KRPC 1.3 billion dollars.

    He recalled that the committee was constituted to determine actual cost of rehabilitating the refineries and what was needed to bring them back to maximum refining capacity.

    According to him, the committee is mandated to determine the true state of the refineries, ascertain the actual cost of rehabilitating and what is needed for the refineries to function at maximum capacity.

    He said the committee relied on relevant laws and pursuant to the provisions of Sections 62, 88, and 89 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).

    The rep said the committee requested the GMD of the NNPC to provide a status report on the nation’s refineries and the actual cost of rehabilitating the refineries from 2012 to date.

    “The committee specifically requested the GMD to provide the following; an appraisal of the current state of refineries in the Country: Port Harcourt Refining Company (PHRC); Warri Refining and Petrochemical Company Limited (WRPC) and Kaduna Refining and Petrochemical Company Limited (KRPC) from year 2012 to date.

    “Copies of annual budgets on rehabilitation by the refineries: PHRC, WRPC and KRPC from 2012 to date and a list of approvals/fund releases for rehabilitation of refineries from 2012 to date.

    “List of all contracts awarded for rehabilitation of refineries and award letters issued to service providers and contractors and the Actual Cost of Projects (Contracts) and Review (if any) stated in Naira.

    “Work Completion Certificates issued on rehabilitation projects carried out on refineries, evidence of payments made for all such contracts awarded from year 2012 to date.

    “List of service providers and contractors that handled the rehabilitation of refineries and any other relevant information to assist the Committee in the course of this assignment,”he said.

    The lawmaker said that as members of the national assembly and representatives of the people, they had the constitutional duty to name and demand from those responsible.

    He said that legislators needed to know the problems besetting the refineries in order to proffer solutions for a sustainable future and for the benefit of all Nigerians.

  • Reps Cttee summons Finance, Petroleum Ministers, others over state of refineries

    Reps Cttee summons Finance, Petroleum Ministers, others over state of refineries

    The House of Representatives Ad hoc Committee investigating the state of refineries in the county, has summoned the Minister of State for Petroleum Resources to appear before the committee on Thursday, March 31.

    The committee also summoned the Minister of Finance, Budget and National Planning, the Group Managing Director of Nigerian National Petroleum Corporation (NNPC) among other government officials.

    The Chairman of the committee, Rep. Johnson Ganiyu (APC-Lagos) gave the ruling on Thursday at an investigative hearing in Abuja.

    He said the summon became necessary following the failure of the ministers and the other invited government officials to honour earlier invitation.

    The lawmaker said that the committee was giving the officials another opportunity to willingly appear and give account of their stewardship of the nation’s refineries.

    Other top government officials expected to appear include the Accountant General of the Federation, Auditor General of the Federation and the Director General, Budget Office of the Federation.

    The Central Bank of Nigeria (CBN) Governor, the Chief Executive, Nigerian Upstream Petroleum Regulalory Commission and the Chief Executive, Nigerian Midstream and Downstream Petroleum Authority are expected to appear.

    The Managing Director, Port Harcourt Refining Company Limited (PHRC), the Managing Director, Kaduna Refining and Petuchemical Company Limited (KRPC) and the Managing Director, Kaduna Refining and Petrochemical Company Limited (KRPC) are to cause appearance too.

    Other are, the Statistician General, National Bureau of Shfisfis (NBS), Executive Secretary, Nigeria Extractive Industries Transparency Initiative among others.

  • A nation of adulterated fuel and adulterated stories – By Dakuku Peterside

    A nation of adulterated fuel and adulterated stories – By Dakuku Peterside

    By Dakuku Peterside

    For decades, Nigerians have been living in denial about the state of our country’s petroleum refining and distribution system. Even non- specialists without any training in elementary petroleum economics know there is something wrong with our petroleum products refining, importation, and distribution regime and regulatory systems. Unfortunately, even with enacting the protracted Petroleum Industry Act, Nigerian leaders have not mustered the political will to address the issue for reasons of political convenience and economic motives.

    One of the critical problems is that Nigeria, as one of the largest producers of crude oil globally and the largest producer in Africa, has been shamelessly engaging in importing petroleum products because the refineries are not in good working condition. Nigeria has a corruption-ridden and devastating oil subsidy regime, a poor and ineffectual regulatory framework that negatively impacts its economy. There is a need for systemic change to eliminate the importation of petroleum products, get the refineries working, and ensure a fit-for- purpose regulatory framework with little or no room for abuse. One issue that merits consideration alongside this envisioned overhauled system is total deregulation of the sector to attract private investment.

    Last week, as is the case with the pervasive substandard products – drugs, industrial products, cosmetics, drinks, and other consumables – imported into Nigeria, substandard petroleum product or, more appropriately called, off-the-specification product was imported and distributed across the nation with devastating implications on users of the products. This event sparked off a lot of fury and reactions. Typical of Nigeria, we have focused on the blame game, and nobody accepts responsibility, not even NNPC. This event is not the first time we imported petroleum products that did not meet national and international standards and will certainly not be last. The successful importation and distribution of “adulterated fuel” has vast implications, from economic losses, large scale deterioration in the performance of car engines, environmental pollution to most importantly, failure of regulatory enforcement.

    Now we face this monumental challenge; the critical issue is unravelling the truth, examining the lessons, proffering solutions on the way forward, and rejigging our supply and regulatory systems to make them more effective and efficient. The big question is, do we have the political will?Although ill-fated and hugely damaging to our economy and image, this substandard PMS brouhaha may be an opportunity to revisit our PMS importation and distribution system and the regulatory regime to get it right once and for all times.

    The usual reaction by Nigerians and the government is what we are witnessing now: the Federal Government will call for investigations, the Ministry of Petroleum will set up an investigation panel made up of the same people who should have prevented this from happening in the first place. The National Assembly will condemn and set up a committee of those with oversight responsibility to ensure this system failure did not occur ab initio. Investigators make a scapegoat of a few petroleum importing companies who acted on behalf of NNPC and use one “truth” to cover another truth until the truth becomes the casualty in the process of trying to unravel the truth. This process is cyclical and produces nothing tangible. Soon we will forget, like a collective that suffers amnesia, and new events will show up to overshadow previous ones, and we, as usual, move on as if nothing happened.

    This issue of substandard or adulterated fuel raises five critical questions that could lead us to the truth: What standards of refined PMS petroleum products are prescribed for consumption in Nigeria? Has the market regulator and regulatory process for importing petroleum products failed? Did the multiple quality control mechanism for imported petroleum products fail? How did the “off- the – standard” pass into the market and escape all checks by the regulator? Do the regulator, supplier, and testing laboratories have the requisite capacity? Why has the importation process of petroleum products been shrouded in secrecy for so long? As we transition to complete deregulation, what are the regulatory systems we are putting in place to ensure Nigerians do not suffer from consuming “adulterated products “? Why would a major oil-producing nation be a significant petroleum product importing country for over 40years? Why are our refineries refining little or no fuel inspite of billions of dollars in maintenance bill over a 25 year period?

    The specific infraction that sparked this instant reaction is that methanol, in unacceptable percentage, was found in premium motor spirit (PMS), otherwise called fuel, supplied to retailers. The product was traced to cargo delivered by Litasco, the Swiss trading arm of Russia’s Lukoil. NNPC ltd, in trying to explain its involvement in the matter, inadvertently caused panic, brought about a disruption in the supply chain, leading to long queues due to panic buying. MRS Nigeria, the retailer that raised the alarm, also issued a statement denying importing this specific cargo but instead received it through NNPC. MRS Nigeria further explained the steps she had taken to mitigate the situation.

    A consortium under the Direct-Sale-Direct-Purchase (DSDP) contract also issued a formal statement to explain her side of the story. This poor information management or miscommunication confused Nigerians about the truth about this adulterated petroleum product. Industry professionals have said that testing for methanol is typically not the conventional practice because it is a blending component for petroleum products. Methanol in acceptable quantity in PMS raises the octane level and minimises engine knock. However, PMS (fuel) with high methanol content harms car engines, leading to structural failure or the explosion of car engines. It is also highly corrosive to aluminium components and can easily cause damage to gaskets and rubber hoses. Methanol is used as various blends up to 5% in China, India, Europe, and America. More worrisome in this instant case is that this cargo with high methanol content was certified as meeting Nigerian PMS specifications by NNPC quality inspectors. Also, this product was approved by the Midstream and Downstream Petroleum Regulatory Authority (NMDRA), the industry regulator. The import passed all regulatory scrutiny and was found fit for consumption. The net effect is that there was a clear oversight of requisite methanol content standards by the supplier and NNPC, authorized sole importer of PMS.

    I have read many knee jerk reactions from quarters, and it is evident that many commentators and “experts” do not have informed knowledge. Based on my background knowledge and experience as a former Chairman, House of Representatives Committee on Petroleum Downstream, I think our focus as a country should be on the lessons in this saga to fix a seemingly intractable defective PMS importation and distribution regime.

    There are five lessons Nigeria must learn from this saga. PMS Products standards are essential for consistency and safety. First, the regulator should set holistic standards known to both suppliers and consumers, and enforcement of such measures should be sacrosanct and blind to all actors. I am not unaware that the Standard Organisation of Nigeria (SON) and Nigeria Upstream Petroleum Regulatory Commission (NUPRC), through its precursor organisation, the Department of Petroleum Resources (DPR), have a single standard for PMS in Nigeria. Second, regulatory enforcement is vital. The regulator requires capacity, effectiveness, efficiency, and diligence. The profit motive will always drive businesses and, if not effectively regulated, will put their economic interest above public interest and safety.

    Third, technology is available in the market today to ensure the products supplied are consistent with prescribed standards. We need to optimise the benefit of technology throughout the petroleum supply and distribution network. Fourth, transparency and capacity are essential in authorising firms to bring products into the country. Lack of transparency breeds corruption compromises quality and is primarily responsible for substandard products. Finally, importing petroleum products for 200 million Nigerians, who produce crude oil, is not sustainable. Dependence on foreign refineries for petroleum products is not suitable for the price, product availability, and quality consistency, and it is susceptible to corruption. It is time we sell off non- functional refineries, license more private ones and end fuel importation and subsidy regime.

    The menace of bringing substandard fuel to Nigeria is a social, economic, and environmental monstrosity and an international embarrassment to Nigeria. NNPC ltd, on paper and face value, is the sole importer of PMS today, so it must accept ultimate responsibility for this infraction. It should ensure that it recruits only reputable and capable organisations to import PMS on her behalf, and the system must be made open and transparent. Besides, the fuel quality specification provisions need to be strictly aligned with international best practices to deter companies from cashing in on loopholes circumventing the standards and importing fuel with high Sulphur or methanol content.

    There is a need to strengthen the surveillance and monitoring structures so that regulators can easily detect such violations of standards before they enter the domestic supply chains. The ripple effect of adulterated fuel in the market is dire – the cost of recalling the products; the scarcity of the PMS product causes economic pain and hardship and damage to consumers vehicles and other engines that use the PMS. The bottom line is that Nigeria should transition from a net importer of PMS to a net exporter.

    Government and other stakeholders should do whatever it takes to kill this massive ‘elephant in the room’. They must summon the political will to crack down on offenders and to fortify the PMS regulatory regime to avoid such embarrassment in the future. President Muhammadu Buhari is leading the way by committing to getting to the bottom of the problem and setting up a high-powered committee to investigate and bring to book all found guilty in this saga. And he directed relevant government agencies to take every lawful step to ensure the respect and protection of consumers against market abuse and social injustice. All other stakeholders must align with the President’s actions and sort things out.

    This is not time for apportioning blames and pointing accusing fingers at various organisations and regulatory regimes affected by this saga, we must articulate the lessons and work hard to rejig the system to improve the situation. This development offers us the opportunity to re-examine our petroleum products supply and distribution regime and take decisive actions that benefit Nigerians. PMS is one product that all Nigerians consume, and anything affecting it impacts the lives of all Nigerians. Such a vital product must not be left to the vagaries of production and importation from abroad, and I think this must be considered an issue of national security. Fortunately, Dangote Refinery and other Modular refineries are almost at the stage of starting local refining of PMS. Hopefully, they will have the capacity to refine PMS to cover the demands of Nigerians and other African countries that depend on Nigeria for their PMS shortly.

  • Reps set up committees to determine fuel consumption, state of refineries in Nigeria

    Reps set up committees to determine fuel consumption, state of refineries in Nigeria

    The House of Representatives has set up a 14-man committee to investigate the quantity of fuel consumption in the country daily and determine the state of the nation’s refineries.

    Rep. Femi Gbajabiamila, the Speaker of the House of Representatives, said the move became necessary following planned removal of subsidy by the Federal Government on Wednesday in Abuja during the plenary.

    Gbajabiamila said it was important to know the state of the nation’s refineries and the planned subsidy removal to understand whether the planned removal was right or wrong.

    The 14-man committee on the amount of fuel consumed per day will be chaired by Rep. Abdulganiyu Johnson (APC-Lagos), while that of the state of Nigeria refineries is to be chaired by Rep. Abdullahi Ningi (APC-Bauchi).

    The News Agency of Nigeria (NAN) reports that following the Petroleum Industry Bill (PIB), which became an Act after it was assented to by President Muhammadu Buhari, it was expected that subsidy would go

    Worried by the incessant planned removal of subsidy and the state of the nation’s refineries, the House decided to set up the 14-man committee for each to investigate the issues.

    Meanwhile, the Minister of Finance, Budget and National Planning, Hajia Zainab Ahmed and the Ministry of Petroleum Resources, Mr Timipre Sylva, said the Federal Government was not in a hurry to remove subsidy on petroleum products.

    The president, on Tuesday approved the suspension of the removal of fuel subsidy until further notice and proposed an 18 months extension to the National Assembly for the implementation of the Petroleum Industry Act (PIA) that was billed to go into effect this February.

  • JUST IN: FG approves $1.4bn for rehabilitation of Warri, Kaduna Refineries

    JUST IN: FG approves $1.4bn for rehabilitation of Warri, Kaduna Refineries

    The Federal Executive Council has approved contracts for the rehabilitation of Warri and Kaduna refineries at a cost of $1.4 billion.

    The breakdown shows that $897 million is earmarked for the Warri refinery and $586 million for Kaduna refinery.

    Nigeria has four refineries – including two in Port Harcourt – but all have struggled to function optimally as the country continues to import petroleum products.

    The rehabilitation is expected to turn around the refineries and set them up to meet local oil demands.

  • Why completed refineries are yet to produce – NNPC

    Why completed refineries are yet to produce – NNPC

    The Nigerian National Petroleum Corporation (NNPC) has explained why some completed private refineries are yet to commence production.

    Its Chief Operating Officer (COO), Refineries,Mr. Mustapha Yakubu, said investors were yet to conclude with the corporation on the procurement of feedstock for the refineries.

    He said ordinarily crude oil is sold in foreign currency, but owing to the volatility of foreign exchange, NNPC has arranged to sell crude to private refineries in naira.

    His words: “Today, they have a challenge. Some of them constructed refineries today they cannot start because we are discussing how to allocate crude to them.

    “We are asking them to pay in foreign exchange. You know what is happening to foreign exchange: volatility. So, we have to find a common ground so there is a discussion in that regard to allow them pay in local currency.”

    He spoke as a panelist at the ongoing Nigerian Oil and Gas (NOG) conference in Abuja.

    The topic of discussion was: “What strategies in the mid and downstream sectors will take Nigeria closer to energy self-sufficiency?”

    Earlier, the COO noted that NNPC was collaborating with the private investors to encourage them.

    He said the partnership has become necessary because it is possible for the investors to build refineries without have feedstock: crude or condensate to refine.

    Mustapha said: “Whatever they do, they have to work within certain regulations. Refineries are not bakeries. I can go to Wuse market and buy flours. But for those refineries you need feedstock whether crude or condensate.’’

    “This crude belongs to government so there is need for collaboration. We need to support them. Because you can build refinery and there is no crude. What happens? The partners will be running after them.

    “Government needs to make money from this crude oil. A lot of sectors need money. The health sector needs money. There should be that assurance if I give you crude you have to pay for it and you need to also deliver the balance.

    “ The investors that are building refineries today we have to collaborate that is the way we can encourage them.”

    Also, Chairman, Major Oil Marketers of Nigeria (MOMAN), Mr. Adetunji Oyebanji, maintained that the private investors are reluctant to replicate the establishment of the Compressed Natural Gas (CNG) across the country because of the high cost of the equipment.

    He recalled that there were seven CNG stations in Benin-City, adding that investment in the enterprise has been very slow.

    The MOMAN chief said the sophisticated equipment that were required to operate the CNG plant are expensive and there were issues with availability and product pricing.

    He noted that investors would go to where there was a return on their investment.

    He said there was no enabling environment to attract investors to the development of CNG in the country. He urged the stakeholders to imagine why the deployment of CNG has been slow.

    He said: “Some entities have made significant investment in downstream. Nipco Plc several years ago invested in seven CNG stations in Benin. They question is: Why has it not been replicated across the country. And why hasn’t it moved much faster?

    “It always goes down to the economies of it. At the end of the day, anybody who is an investor needs return on their Investments. It is between the availability of the product, pricing all come together because investment in CNG “Infrastructure is not cheap. It is not like coming up with a bakery. You need a lot of sophisticated equipment to compress the air. You need the pipelines system to move the gas. Obviously, there is a requirement for significant investment,” he added.

  • Fuel price N380; Next level catastrophe (1) – Dele Sobowale

    Fuel price N380; Next level catastrophe (1) – Dele Sobowale

    Dele Sobowale

    “To know that which before us lies in daily life is the prime wisdom…”

    John Milton, 1608-1674, VANGUARD BOOK OF QUOTATIONS, p 275.

    Africans in general, and Nigerians, in particular, are slow learners. That is why the GIANT of Africa will never go to the moon or Mars – long after Fiji Island (population 200,000) had got there. From the information at my disposal, those citizens of the island state, at least, don’t deceive themselves. Nigerians have never been honest with themselves. We are in serious danger now, not just because Buhari is the President (although that is a contributory factor), but because we too readily lie to ourselves. Worse still, we pretend to believe what we know is untrue and we want others to believe it too. When the N380/litre fuel is introduced, we would have reached the Next Level of national catastrophe. We are responsible for what will unfold from the minute the new fuel price is announced. We elected the Buhari government which will make our lives miserable to the end of its days.

    FORECASTING ECONOMIC OUTCOMES IS AN ART AND SCIENCE

    “Every government is run by liars; and nothing they say should be believed.”

    I. F. Stone, 1907-1989

    Personally, I don’t derive much pleasure anymore from being right most of the time. Virtually every article I have written in the last ten years on the BUSINESS/ECONOMY pages of newspapers had either involved forecasting the future economic outcome in one aspect of Nigerian life; or telling Nigerians “I told you so”. Governments will always lie to the people. That is why the media exists in society. It is our sacred duty to let the people have the facts – without fear or favour. It is an obligation we don’t always discharge as we should. We evade truths that hurt some individuals or in order to be popular. Yet, column writing is a trust. The columnist should not be engaging in popularity contest, but, in the search for and rendition of truth as close as he can get to it. What follows will not make you happy; but, it will be the truth.

    “Allow an untenable economic situation to go on for too long; and, suddenly, there are no good options left.”

    Arthur Burns, , former Chairman of the US Federal Reserve Bank.

    For too long, any economist, worth his salt, had known that fuel subsidy was an economic mistake at first; it has turned to lunacy at last. Governments, from Babangida to Buhari now, had grappled with the attempt to end the intractable issue of fuel subsidy, but, every one of them had lacked the courage to an end it. They have all caved in when the political fall-outs prove too irresistible. Yet, fuel subsidy, where and when it exists, amounts to government encouraging the people to live beyond their means. And, when such handout is financed by borrowing, it ends up as mortgaging the future for the benefit of the present generation. We are consuming now and passing the bill to our children and grand-children to pay. This is most unkind of our generation of adults. But, all things come to an end eventually. Fuel subsidy must end now.

    “NGF mulls N380/litre fuel price.” News Report, May 20, 2021.

    The bad news which was released by Governor El-Rufai of Kaduna state needs to be quoted as delivered. According to him, “The committee recommends PMS pump price increment from the current N162 per litre to N408.5 per litre (negotiations on with organised labour unions. N380 per litre settlement with organised labour.”

    Why El-Rufai accepted to be the spokesman for the Governors, given the monumental problems he faces in Kaduna State, is a mystery. I strongly believe the Nigerian Governors’ Forum should have picked another spokesman to deliver this explosive message.

    That said; let me interpret the message delivered in “governmentese” – an alien language to most Nigerians. It is full of riddles. First, fuel subsidy removal is imminent – either totally or partially; either once and for all time or still trending. Second, the Governors, after demonstrating lack of courage and foresight, have been slugged by reality to acknowledge the fact that they cannot expect higher monthly revenue allocations from the Federal unless fuel subsidy is totally or partially removed. Third, the FG, which will eventually have to announce the bad news to Nigerians, has delegated its responsibilities for now. But, the FG cannot chicken out for ever. It must address the nation because of the consequences that will follow. And, they will be severe on Nigerians everywhere in this country. Prayers cannot help us.

    “Whatever a man prays for, he prays for a miracle. Every prayer reduces itself to this; Great God, grant that twice two be not four.” Ivan Turgenev, 1818-1883.

    I have received several calls from our readers wanting to know if indeed there is a subsidy to be removed; whether N380/litre fuel price should be acceptable and what would be the consequences of that quantum increase in fuel price. Too often, the callers don’t voice their anxiety, namely, how to avoid the inevitable hyper-inflation. Let me address the last issue first.

    Increasing fuel price from N162/litre to N380/litre, or 200 per cent, amounts to unofficial devaluation of the Naira. Prices of goods and services will escalate by at least 50 to 100 per cent. Aggregate inflation will rise above 30 per cent for the rest of the year. Most of us might not like to hear it, but, it needs to be said clearly. There is subsidy to remove. The landing cost of fuel exceeds the pump price by a wide margin. Unless we close it, the FG and states will become ungovernable. None will be able to pay the Minimum Wage to which they were foolishly committed in 2019.

    FORGET ABOUT REFINERIES

    “n

    Each time fuel price increase returns to the front of the national agenda, Nigerians ask the same foolish question. Don’t ask me about our refineries. I am sick and tired of repeating the same thing about the scraps we call refineries. What is quoted above is what we were told in May this year. If you believe that, you will certainly believe anything. Three obvious reasons should inform your scepticism about that announcement. Buhari has only 24 months to go. No government has delivered any project on time. They would have exhausted the $1 billion before they go; the successor will have no funds to complete the job.

    To be continued….

    “Politicians are their own grave diggers.” Will Rogers, 1879-1935, VBQ p 191

    Governors are their own worst enemy; and sometimes ours too. The problem bringing Kaduna to stand still now was foreseen and governments were warned on these pages. Furthermore, another warning was issued as soon as Buhari announced the Minimum Wage. Finally, a confidential letter was sent to two South West governors advising that no Governor should act alone on Minimum Wage. El-Rufai is in big trouble because they don’t listen to other people. All the talk about “all hands on deck” by Governors is hogwash. Most of them will soon suffer El-Rufai’s fate…..

    To be continued

  • DPR denies revoking 32 refinery licences

    DPR denies revoking 32 refinery licences

    The Department of Petroleum Resources (DPR) has denied revoking 32 refinery licenses issued to private companies in Nigeria.

    Mr Paul Osu, Head, Public Affairs, DPR, made the clarification in a statement on Tuesday in Lagos.
    “We wish to clarify that DPR did not revoke any refinery licence.

    “Refinery licenses, like our other regulatory instruments have validity periods for investors to attain certain milestones.

    “This implies that after the validity period for the particular milestone, the licence becomes inactive until the company reapplies for revalidation to migrate to another milestone.

    “This does not in any way translate to revocation of licence of the company,” Osu said.

    According to him, the DPR in line with the aspirations of the government initiated the refinery revolution programme of the country.

    He said it was aimed at boosting local refining capacity by enabling business and creating new opportunities for new investors with the granting of modular and conventional refinery licenses to investors.

    Osu said the DPR would continue to provide support for investors in the oil and gas industry in Nigeria using its regulatory instruments of licences, permits and approvals to stimulate the economy and align with governments job creation initiatives.

  • IPMAN begs FG to allow investors run nation’s ailing refineries

    IPMAN begs FG to allow investors run nation’s ailing refineries

    The Independent Petroleum Marketers Association of Nigeria (IPMAN) has advised the Federal Government to allow investors to take over the running of the country’s three refineries.

    Alhaji Danladi Pasali, National Secretary of IPMAN, stated this, reacting to a report that the pump price of petrol might likely get to N190 per litre and the price of crude oil hit 60 dollars per barrel in the international market.

    “We can run it successfully in collaboration with our foreign investors,” he said.

    Speaking at the official launch of Nigerian Upstream Cost Optimisation Programme in Abuja, Minister State for Petroleum Resources, Chief Timipre Sylva said with no provision of subsidy in the 2021 budget, the Nigerian National Petroleum Corporation, cannot continue to bear the cost of under-recovery.

    At present, the pump price of petrol ranges from N160 –N165, the price band set when crude traded just above 43 dollars per barrel four months ago.

    In an interview with NAN, Pasali, commending government’s efforts, said that IPMAN controlled 80 per cent of the downstream sectors.

    “IPMAN controls 80 per cent of the downstream sectors of the industry and with our investments running into trillion, government should give us the three refineries.

    “We can run it successfully in collaboration with our foreign investors,” he said.

    Pasali said that allowing investors to take over would help in making the government’s job easy and improve the economic development.

    He said increasing petrol price for now was not a good thing, as the economic index shows that the county was in economic hardship.

    “The capacity of people buying the products is low now compared to before, for example some people buy petrol of N1,500 for their cars but it was not like that in the past.”

    Pasali also advised the government to call for stakeholders’ meeting to help solve the problem.

    “We can look at other means because there are so many things in the oil template, for example to see how we can reduce the tension.

    “There are so many charges in the template like the unnecessary marine charges that can be reduced and it can help reduce the tension, among other suggestions.”