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Fuel Subsidy To Gulp N102.96bn In March, As NNPC Says Pump Price Doesn’t Reflect Market Forces

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The Nigerian National Petroleum Corporation may spend N102.96bn on petrol subsidy this month going by the recent pricing template for the commodity.

A Federal Government agency, Petroleum Products Pricing Regulatory Agency, on Thursday published the expected new lower and upper prices for petrol at retail outlets in March 2021, putting the rates at N209.61/litre and N212.61/litre respectively.

It also put the ex-depot price of petrol for the month at N206.42/litre and pegged the expected landing cost at N189.61/litre.

PPPRA is the regulator of the downstream oil sector.

It pulled down Thursday’s template for petrol with an explanation that the earlier published guiding price did not translate to a hike in pump price despite reflecting market realities.

However, the ex-depot price approved by NNPC for March was N148.6/litre and the corporation insisted that it had not and had no plan to increase the petrol price this month.

Ex-depot price is the rate at which NNPC sells the commodity to depot owners, from where retailers make the purchase before dispensing at the pumps in filling stations.

“There is no increase in the petrol price and our position is that the ex-depot price for petrol in March remains the same. So, no need to panic because there is no hike in price,” NNPC’s spokesperson, Kennie Obateru, stated.

NNPC is the sole importer of petrol into Nigeria for more than three years.

Nigeria consumes about 57.44 million litres of petrol daily, going by the most recent daily consumption figure released by the NNPC in its financial and operations report.

Therefore, the difference between the N206.42/litre ex-depot price published by PPPRA as the expected cost for March and the N148.6/litre price being sold currently to marketers by NNPC shows that the corporation subsidises petrol by N57.82/litre.

Multiplying this by the 57.44 million litres consumed across the country daily and the 31 days in March, it implies that the government through the NNPC will spend about N102.96bn as petrol subsidy this month.

When contacted on Sunday night, the spokesperson of NNPC confirmed that the pump price of petrol was not reflective of the true market price, meaning that the commodity was being subsidised by the corporation.

Obateru said, “The minister and our group managing director had explained that the current pump price is not reflective of the market forces but that engagement is ongoing with labour on this issue.

“This is to find a way in which the cost issues are addressed so as not to impact negatively on Nigerians. That engagement is still ongoing and that is why we said there will be no increment.”

He added, “Initially we said it (no increment) was in February but the engagement still continued in March, which was why we said we are not increasing it in March.

“But the fact is that the current pump price is not reflective of the expected market price for petrol. However, we have to agree with labour before taking any action.”

NNPC’s position that the petrol price would not increase in March was further reaffirmed by the Minister of State for Petroleum Resources, Timipre Sylva.

Sylva had apologised to Nigerians on Friday over the publication of the petrol pricing template by PPPRA as well as the panic and fuel queues caused by the development across the country.

He insisted that despite the template, which actually reflected the realities in petrol price, the government would not increase the cost of the commodity this month, meaning that the product would be subsidised.

The minister said the President, Major General Muhammdu Buhari (retd.), had also not approved an increase in petrol price.

He said, “Neither Mr President who is the Minister of Petroleum Resources, nor my humble self who deputise for him as Minister of State, has approved that the pump price of petrol should be increased by one naira.”

Sylva explained that the Federal Government was still engaging labour unions on the matter of petrol price and would not increase the cost of the commodity without reaching an accord with the unions.

He urged oil marketers not to dispense the commodity at the N212.61/litre rate published by PPPRA, as defaulters would be sanctioned.

The Lagos Chamber of Commerce and Industry said a halt in the petrol subsidy was inevitable if the economy must make progress but this should be done strategically.

Director-General, LCCI, Muda Yusuf, stated that the deregulation conundrum in Nigeria had remained a major cause for concern, as a number of critical issues needed to be aligned.

He told our correspondent that the country had a huge economic cost of petroleum subsidy and inherent huge fiscal leakages which were clearly unsustainable.

Yusuf explained that there was the social cost of the possible increase in the petrol price and the worry about a possible backlash.

He noted that there was an adverse investment effect on the petroleum downstream sector resulting from policy uncertainty and inconsistencies.

He said, “Private investors will be reluctant to invest in petroleum refining if the subsidy regime persists.

“The reality is that the deregulation of the petroleum downstream sector is inevitable if the economy must progress and put an end to the corruption that comes with the subsidy regime.

“But the policy transition needs to be strategically worked out. There could be a social pricing window in the interim where petroleum products could be sold at a subsidised price.”

The LCCI director-general said filling stations of the Nigerian National Petroleum Corporation could be so designated since they exist in all parts of the country.

An energy expert, Bala Zakka, said the implication of a high landing petroleum cost would impact negatively on the government’s image.

He said, “It will be casting a negative shadow on the image of the government. Is this the way prices of petroleum products are increasing in the Organisation of the Petroleum Exporting Countries nations like Saudi Arabia, Iraq, Iran Libya? As long as that is not the way, it will cast a negative shadow on their image.

“The inability to help functional refineries or supply distillate to citizens is an internal problem. It shows that economic managers in Nigeria especially in the downstream sector of oil and gas are not doing well. It will affect the economy of the nation as well as the Gross Domestic Product.”

On the implication for corporate entities, he said, “Corporate entities will suffer and productivity will be affected because their staff will need to pay more to get to work. If they do not get a salary increase they would be demotivated and the quality of their work will suffer.”

Zakka said deregulation was not the way forward in fixing the problem

He added, “Government will never be able to fix this situation as long as we are within the concept of deregulation.”

Zakka said the government will need to be careful in the regulation of its prices as it has no substitute.

Break NNPC’s petrol import monopoly, marketers tell FG

The National President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billis Gillis-Harry, said the government should deregulate the downstream oil sector fully by allowing other marketers to import petrol.

He stated that the importation of petrol into Nigeria was being monopolised by NNPC and urged the Federal Government to break the monopoly.

Gillis-Harry said, “We see and hear different things from the various government agencies because of the lack of synergy and petrol subsidy (currently on now), which is a huge financial drain.

“The government should break the monopoly of petrol imports by NNPC. Other marketers are willing and ready to import products.

He added that this would only happen in a properly deregulated downstream sector.

BIG STORY

Catholic Priest, Other Church Officials Arrested, Detained Over Abuja Palliative Stampede Deaths

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A senior Catholic priest in Nigeria’s Federal Capital Territory, Abuja, has been arrested over the tragic stampede that claimed 10 lives during the distribution of free food to the needy at “Holy Trinity Catholic Church, Maitama.”

It was gathered that a number of officials of the church involved in the planning and execution of the ill-fated charity event have also been arrested by security agents. All those arrested have been taken into detention and will likely spend Christmas behind bars, a top Catholic Church leader confirmed on Christmas Eve.

The arrests came against the background of demands by the Islamic activist group, “Muslim Rights Concern (MURIC),” for the arrest of those behind the event and a similar one in Okija, Anambra State, where 22 persons were confirmed dead in a billionaire businessman’s house. MURIC had demanded that organisers of a similar tragic charity event in Ibadan, Oyo State, who were taken to court and remanded in prison custody, should be released if those of the Abuja and Anambra events would not be given similar treatment.

Inspector General of Police, Dr. Kayode Egbetokun, had also ordered an investigation into the Abuja and Anambra tragic charity outreaches.

Reacting to the arrest and detention of his church officials, the Catholic Archbishop of Abuja Diocese, Most Rev. Ignatius Kaigama, last night condemned what he described as “verbal demonization of the Catholic Church” by some agents of government in responding to the tragedy at “Holy Trinity Catholic Church in Maitama.”

According to Kaigama, the detention of the priest as well as some officials of the church and the threat to slam criminal charges on the church “is to say the least, uninspiring, unfriendly and a misplaced zeal, and one wonders what purpose these were meant to serve.”

Archbishop Kaigama, who made his mind known in his Message titled, “Christmas: A Season of Hope and Renewal,” said that government officials should have focused on helping the organisers and the church to overcome their trauma instead of compounding it through arrest, detention, and threat of criminal prosecution.

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Thousands Flock To Lagos For Africa’s Biggest Shopping, Entertainment Event [PHOTOS]

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Thousands of excited Nigerians attended the opening day of the much-anticipated maiden edition of the Lagos Shopping Festival (LSF) on Monday, December 23 and were served up an electrifying feast of events, activities and promotions across the the main venue of the festival, the iconic Mobolaji Johnson Arena, (formerly Onikan Stadium).

As advertised, first day of the festival lived up to its billing with a colourful blend of commerce, music, innovation and creativity following its flag off by the Executive Governor of Lagos State, Babajide Olusola Sanwo-Olu.

The Lagos Shopping Festival, powered by the Lagos State Government in collaboration with Chain Reactions Africa, a frontline PR firm, and supported by leading brands, including Zenith Bank, Tolaram Group, First Bank Plc, and Guinness, will see millions of people hit the main venue and select Lagos malls to bag the latest bargains, and bring together the best of city’s retail offering, showcasing local and top global brands and shopping experiences, including in-mall promotions.

Speaking at the event, Governor Sanwo-Olu described the LSF as a history-making festival of back-to-back shopping, fun, and entertainment, reaffirming the Lagos state’s commitment to grow small businesses as well as the entertainment industry.

“This is the first of its kind and this event is made to bring shoppers with MSMEs, with innovators, with entertainers, with the creative industry, with the food industry and everybody,” said Sanwo-Olu.

“For the next three days, we are meant to all come together, enjoy good food, good music, sales at discounted market price, shopping at the highest level and just general entertainment with the creativity of Lagos,” the Governor added.

He called on all Lagosians and Nigerian to join the fun, shopping and entertainment.

“Call everybody from Iyana-Ipaja to Alimosho, call people from Agege, call them from Ebute-Meta to Shomolu, call them from Bariga, from Badagry to Ikorodu, from Epe to Ibeju-Lekki, call everyone to come to the arena here at the Mobolaji Johson Center in Onikan where we’ll be doing shopping, we’ll be doing music, we’ll be doing entertainment for the next two days. This is the first of its kind”, Sanwo-Olu added.

He assured all fun-seekers, buyers and sellers of their safety, saying that they are in a safe, secure, peaceful environment, urging them to “to sit back, relax and see another Lagos creativity that is the first, and the very first Lagos Shopping Festival”.

Governor Sanwo-Olu expressed his appreciation to the sponsors of the Lagos Shopping Festival for their unwavering support to drive the story of Lagos commerce, entertainment and creativity.

“I want to thank all of our sponsors from FirstBank, to Zenith Bank, to Tolaram, to Smirnoff Ice, to Indomie Noodles, to OmniBiz, to PowerOil, to Minimie, and to Malta Guinness, all of them, including the Lagos State Government. I want to thank you”.

He also commended all the local and small businesses at the festival, and urged Lagosians and Nigerians to always patronize them.

“More importantly, to all the small businesses that are inside and under the canopies, go out there and make good deals. Go out there and do huge purchases from them. Go out there and make their small-scale market, work for them; because here, we want the market to be meeting all of the shoppers. That’s what this is all about. It’s about buying stuff at the most reduced market. It’s about entertainment, it’s about food, it’s about tourism. This is what Lagos has given to you again,” Sanwo-Olu said.

Also, commenting, the MD/ Chief Strategist, Chain Reactions Africa, the organisers of the Lagos Shopping Festival, Mr Israel Jaiye Opayemi, buttressed the strategic significance of the festival saying, “LSF is poised to be the catalyst that will redefine the true essence of commerce, especially SME businesses, the creative ecosystem, and fun times with family, friends and loved one. LSF is sure set to open a new vista of socio-economic growth from Lagos, to Nigeria, whilst raising a unique bar in the African market”.

Fun-seekers and business men and women alike had entertainment value for their time, with dancing and singing competition with the winners adjudged by the audience receiving cash gifts. The highlight of the day was the energy-revving musical performances from the youthful Ayo Maff, with the soulful rendition of songs from Adekunle Gold the icing on the cake for the audience who kept singing along to his enchanting stage performances.

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JUST IN: Oriyomi Hamzat, Queen Naomi, School Principal Remanded In Agodi Prison Over Ibadan Stampede

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The Chief Magistrate Court sitting in Iyaganku, Ibadan, Oyo State has ordered the remand of Prophetess Naomi Silekunola, Alhaji Oriyomi Hamzat, and Mr. Abdullahi Fasasi at Agodi Correctional Center following their roles in the Ibadan Children Funfair stampede last week.

Amid heavy security, the three individuals, including the principal of Islamic High School, Bashorun Ibadan, Mr. Fasasi; the proprietor of Agidigbo FM, Alhaji Hamzat; and the estranged wife of the Ooni of Ile Ife, Oba Enitan Adeyeye Ogunwusi, Naomi Silekunola, were on Tuesday arraigned before the court over the incident.

The trio were arrested in connection with the Wednesday, December 18, 2024, stampede that occurred at Islamic High School, Ibadan, resulting in the death of 35 minors, while others sustained injuries.

Chief Magistrate Olabisi Ogunkanmi gave the order following the arraignment of the suspects in court on Tuesday.

The Police prosecutor accused the defendants of committing an offense contrary to Section 324 of the Criminal Code, Cap. 38, Vol. II, Laws of Oyo State of Nigeria, 2000 in a four-count charge for which they were arraigned.

The court premises was filled with relatives of the defendants and other interested parties.

 

More to come…

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