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Fuel Subsidy Rises To N500bn, NNPC Rules Out Price Hike In May

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With the Federal Government leaving the pump price of Premium Motor Spirit (petrol) unchanged in the first five months of this year despite the increase in global oil prices, subsidy on the product is estimated to gulp N500bn in the period.

It was reported on January 11 that the sustained increase in global crude oil prices had pushed up the landing cost of imported petrol closer to the current pump prices of the product in Nigeria, and appeared to have triggered a return to the petrol subsidy era.

Going by the petrol pricing template of the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol rose from an average of N143.60 in December to N158.53 per litre on January 7, with the expected open market price (retail price) being N181.53 per litre.

On February 5, when oil price neared $60 per barrel, it was reported that the expected open market price of petrol rose to over N200 per litre, based on the petrol pricing template of the PPPRA.

The pump price of petrol has remained at between N160 and N165 per litre at many filling stations in Lagos since December.

The Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari, said on March 25 that the Federal Government was subsidising petrol with about N100bn to N120bn monthly.

He said while the actual cost of importation and handling charges amounts to N234 per litre, the government had been selling at N162 per litre, therefore, bearing the difference.

“Today, NNPC is the sole importer of PMS. We are importing at market price and we are selling at N162 per litre today. Looking at the current market situation today, the actual price could have been anywhere between N211 and around N234 per litre,” Kyari said at the time.

Petrol subsidy would gulp N480bn from February to May, based on the monthly figure given by the NNPC boss, while the corporation is estimated to have spent at least N20bn subsidising the product in January.

The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, said it had become clear that petrol subsidy had reemerged.

“They are no more deceiving us; they have told us the truth that there is a subsidy. So, we will continue to carry the burden until when the infrastructure to cushion the effects of high petrol price is put in place by the government,” he added.

Asked if marketers were comfortable with the return of subsidy, he said, “We have no choice because it is the government that is importing petrol. They have the knife and the yam. So, they are to tell us where to go, and we have no choice but to comply.”

The Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, said the announcement by the NNPC that the ex-depot price of petrol would not change in May meant that subsidy would continue. “It means status quo remains; everything continues as it is,” he added.

For more than three years, NNPC has been the sole importer of petrol into Nigeria, and depot owners, major and independent oil marketers rely on it for the supply of the product.

Meanwhile, the NNPC GMD, Kyari, on Monday announced that there would be no increase in the ex-depot price of PMS in May.

The national oil company has maintained an ex-depot price of N148/litre since February despite the hike in the actual cost of the commodity, hence incurring a subsidy of over N120bn monthly.

Ex-depot price is the cost of petrol at depots, from where filling stations purchase the commodity before dispensing to final consumers.

Kyari also announced on Monday that Petroleum Tanker Drivers had suspended their proposed strike after the intervention of NNPC in the impasse between the PTD and the National Association of Road Transport Owners.

The NNPC tweeted these via its official Twitter handle on Monday.

It said, “Following GMD #NNPC Mallam @MKKyari’s intervention in the National Association of Road Transport Owners/Petroleum Tanker Drivers impasse, PTD has just announced the suspension of its planned strike until the closure of discussion between both parties.

“Also, the GMD announced that there would be no increase in the ex-depot price of Premium Motor Spirit in the month of May 2021.”

In March, the NNPC said it would maintain its ex-depot price for petrol until the conclusion of ongoing engagement with the organised labour and other stakeholders.

It was gathered that the engagement with labour on petrol price had yet to be resolved, hence the continued maintenance of the current ex-depot price despite fluctuations in global oil prices.

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UN Pledges Support For Nigeria As Millions Endure Humanitarian Crisis

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Martin Griffiths, the UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator (USG/ERC), has returned from a four-day visit to Nigeria.

Griffiths witnessed firsthand the humanitarian situation and reaction in the region’s north, promising to increase international awareness of the catastrophe and draw attention to the fights around Lake Chad.

Vice President Yemi Osinbajo, federal government officials, Chief of Defence Staff Leo Irabor, and Borno Governor Babagana Zulum were among those that met with the USG.

In Maiduguri, Bama, and Damasak, he met with Nigerians who had been affected by the violence, as well as humanitarian partners.

In Damasak, on the border with Niger, Griffiths heard from some women and families displaced by the violence. They told him of their hopes to return home.

The humanitarian chief expressed sadness about the deep impact of the violence and repeated displacement for many citizens.

Griffiths disclosed that people he met demonstrated amazing courage in the face of vicious violence, killings, and kidnappings.

In Bama, women told the UN top officials, stories of how they escaped from years of armed group captivity only weeks ago.

He, however, confirmed getting Zulum’s commitment to the authorities’ zeal to improve security and build resilience for the most vulnerable.

“It is clear we share a common objective: upholding the dignity of Nigerians and finding ways to ease the suffering too many of them face today.

“People are yearning for security, livelihoods, and better access to social services, and we stand ready to make this a reality with the Government and our humanitarian partners.”

Griffiths hailed aid workers in Bama and Damasak after listening to the challenges they face in reaching those in need.

“Brave humanitarian workers, most of them Nigerians themselves, work tirelessly and often at great personal risk to help others.”

The coordinator promised to continuously advocate their safety and for the necessary support to the persons they serve.

The humanitarian community reached more than 5 million people in Nigeria last year. The 2022 Nigeria Humanitarian Response Plan, for launch in February, requires over $1 billion to help 8.4 million people.

The UN added that the Lake Chad basin conflict has taken a heavy toll on communities across Nigeria, Cameroon, Chad, and Niger, putting 10 million people at risk and in need of assistance.

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Subsidy: Presidency, Governors Deny N302 Fuel Increase

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The presidency and governors have reportedly distanced selves from a planned hike in fuel pump prices from N165 to N302 per liter next month. The Nigeria Labour Congress (NLC) has spoken out against the planned removal of the petroleum subsidy, which the National Economic Council (NEC) ad hoc committee advising the Nigerian National Petroleum Corporation (NNPC) on the appropriate pricing of premium motor spirit (PMS) said would save the country N250 billion per month.

The ad hoc committee, led by Kaduna State governor Mallam Nasir El-Rufia, is said to have suggested a petrol price of N302 per liter, which will be enforced by February. The presidency, on the other hand, denied that a resolution like this was passed at NEC. NEC sessions are presided over by Vice President Yemi Osinbajo.

His media aide Laolu Akande, who also coordinates NEC media activities, in a tweet on his handle, @akandeoj noted that: “While there are indeed ongoing discussions on the issue of fuel subsidy, at no time has NEC made any such resolution. Public discourse can be better served by seeking further clarification from relevant quarters on matters of such importance.”

Nigerian governors, who met in Abuja on Wednesday night, dismissed the report that they were the ones pushing for an increase in the pump price of fuel. Chairman of the Nigeria Governors’ Forum (NGF), the umbrella body of the governors, Dr. Kayode Fayemi, who briefed journalists at end of the meeting, argued that it is not within the mandate of sub-national body, such as the NGF, “to decide on what happens to PMS price.”

According to the Ekiti governor, “the National Economic Council, chaired by the Vice President has been dealing with this issue over time.”

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How Construction Firm Completed Road To Buhari’s Kaduna Residence In Few Days

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Residents in Kaduna were astounded when the construction firm in charge of the road leading to President Muhammadu Buhari’s private Kaduna residence completed the work in a matter of days.

“This has shown that with the right people and the required resources, infrastructural development could be achieved in this country,” Malam Bala, a trader near Sultan road Kaduna has said.

He said the company engaged the engineers and other workers to work round the clock on the road that connects to the President’s house, and the result was marvelous.”

“We heard that the contractor was mandated to complete the section of the road leading to Buhari’s residence before the president’s arrival and before the president flew into Kaduna from The Gambia, the road had been completed, with street lights installed as well as road signs.

“The road is not opened for general use, security agents are still there. The construction workers worked day and night, for 4 days so as to deliver on the road. It’s a surprise that the road could be fixed within such a short time. As of last Saturday, that section of the road was under construction, a lot of work had not been done, only for me to see that a rapid project was being made and it was completed before the President arrived. This shows that if the leaders are determined, they can work for the people,” he said.

The President, who was impressed with the numerous projects he commissioned across the state, exclaimed that “if you had not been in Kaduna for some time now, surely you would miss your road home just like me. El-Rufai has really changed the face of this state. I relocated to Kaduna after serving my jail term in the 1980s from Daura. I cannot find my way home with the current development.”

On Friday, Buhari commissioned the ultra-modern Sabon Gari market in Zaria, amidst applause from locals who have not seen the President physically, some years.

President Buhari had commended Malam Nasir El-Rufai for committing himself to change Kaduna, noting that the Kaduna State Governor has been successful in that quest.

The president, who was on a two-day working visit to Kaduna State to commission some of the state’s urban renewal projects, was speaking at the Murtala Square in Kaduna.  He had arrived in Kaduna on Wednesday night direct from Banjul, Gambia.

From Kaduna, President Buhari, accompanied by Governor El-Rufai, flew to Kafanchan this morning to commission Emir Road, Katsina Road and Dan-Haya Road.

He returned to Kaduna around noon, and immediately commissioned the remodelled Murtala Square, a sprawling sporting, event and recreational centre.

Noting the impact of the urban renewal programme, President Buhari said that he can no longer find his way around Kaduna, even as someone who has lived in the city for a long. Commending El-Rufai, the president said, “you have committed yourself to change Kaduna and you have been very successful and people throughout the country are appreciating it. You are writing your history in letters of gold. I congratulate you for your achievements so far.”

The president commissioned some of the 19 completed urban renewal road projects, including the reconstructed Kawo Flyover, an almost one-kilometer long dual carriageway with three ground rotaries, the 5.6km Aliyu Makama Road, the multi-storey Basic Education Mega-School in Lokoja Road in Rigasa, and the dualised Yakubu Gowon Way and Leventis Underpass.

President Buhari also commissioned the Infectious Disease Hospital in Mando, after Dr. Hadiza Balarabe, Deputy Governor of Kaduna State, explained the thinking behind the project. He also commissioned the fertiliser blending plant of Barbedos Group.

Malam Nasir El-Rufai launched the Kaduna State Urban Renewal Programme in June 2019 by Governor El-Rufai, shortly after which the projects commenced in Kaduna before those of Kafanchan and Zaria started. “The goal of the urban renewal programme is to regenerate Kaduna, Kafanchan and Zaria, the three major cities in the state.”

According to Malam El-Rufai, “these unprecedented investments in urban infrastructure are to consolidate the state’s position as an investment destination, improve its economic competitiveness and promote the welfare of the residents of the state.”

The president would be hosted at a state banquet in Kaduna on Friday.

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