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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.

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JUST IN: Protesters Storm APC Secretariat, Demand Ganduje’s Resignation

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Numerous protestors on Thursday stormed the All Progressives Congress (APC) national secretariat in Abuja, demanding the resignation of Dr. Abdullahi Ganduje, the party’s national chairman, in response to his recent suspension by a faction of his ward executives and the Kano State government’s alleged bribery charge against him.

Singing solidarity songs and carrying banners bearing the slogans “Ganduje must resign” and “Return the APC chairmanship to North Central,” the demonstrators urged President Bola Tinubu and Secretary to the Government of the Federation George Akume to take into consideration moving the party’s leadership back to their area.

The agitation comes two days after the Forum of APC State Chairmen passed a vote of confidence on Ganduje and backed him to remain as national chairman.

The delegation of 37 state chairmen gave the endorsement during a solidarity visit to the national secretariat of the party.

The former governor had recently been slammed with a fresh suspension by a faction of the Ganduje Ward in Dawakin Tofa Local Government Area of Kano, an action the ruling party said was carried out by some impostors allegedly being sponsored by the state government.

Addressing newsmen in Abuja, the protesters under the aegis of Concerned North Central APC Stakeholders lamented that the continued stay of Ganduje in office was a clear violation of the zoning process in the party.

Leader of the demonstrators, Mohammed Mahmud Saba, disclosed that, unlike the 37 APC state chairmen, his people in the North Central have passed a vote of no confidence on the national chairman and equally demanded his immediate resignation.

Saba reiterated that the people of North Central felt betrayed when the position of APC national chairman was hijacked from them following the exit of Senator Abdullahi Adamu despite giving Tinubu the third highest votes after North West and South West at the 2023 presidential election.

He said, “We the North Central APC Concerned Stakeholders have resolved to unanimously agitate for our right and reclaim our mandate which was handed unto us by the National Convention of our great Party in 2022. Various sections of our constitution have established the procedure of replacing an executive member at all levels of the party in the event of death, resignation, incapacitation or expulsion from the party by any executive member.

“It is a fact that the emergence of Dr. Umar Ganduje as national chairman was done against the spirit and soul of the APC which is the constitution of our great party. This singular act has impacted negatively on us as a people in the North Central. We feel betrayed and spited because we gave His Excellency, President Bola Ahmed Tinubu, the third highest votes after North West and South West in the country which put us in a better position to enjoy the fruit of our labour.

“We, therefore, demand that Dr Umar Ganduje resign immediately and stop parading himself as the National Chairman of our great party; the zoning arrangements made by the National Convention in 2022, which zoned the office of the national chairman to the North Central be respected by the NEC and all other organs of the party and that all governors elected on the platform of the APC in the North Central should wake up from their slumber and mobilize their members against this impunity until Ganduje resigns as the national chairman.”

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Fuel Queues Resurface As Scarcity Hits Abuja, Anambra 4 Other States

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Many filling stations in Abuja and roughly five other states are closed on Wednesday as scarcity of  Premium Motor Spirit, also known as petrol cause heavy queues at few locations that dispensed the product.

The lack of PMS, which carriers need to operate their vehicles, left thousands of commuters in the Federal Capital Territory, Nasarawa, Niger, Gombe, Sokoto, and Anambra states stuck at several bus stops.

Due to the few transporters who had access to petrol, this resulted in an increase in transit fares in the impacted states.

It was gathered that the scarcity was due to a shortage in the supply of PMS to the nation’s capital and other states, as this led to the closure of filling stations in the affected areas.

Oil marketers, however, stated that they would hold a meeting with the management of the retail subsidiary of the Nigerian National Petroleum Company Limited today (Thursday) to know the cause of the shortage and how to tackle it.

Hundreds of motorists besieged the Conoil and Total filling stations that sold petrol in front of the corporate headquarters of NNPC in Abuja on Wednesday.

This led to vehicular traffic on the roads leading to NNPC headquarters and other surrounding companies in the Central Business District of Abuja.

Several filling stations in Zuba, Niger State, including NNPC, AYM Shafa, among others, were closed on Wednesday for lack of petrol to dispense.

Similarly, the NNPC outlet on Arab Road, Kubwa, Abuja, had no product to sell. Many other outlets along the Kubwa-Zuba expressway were also shut. In Nyanya, Nasarawa State, many filling stations were closed.

Their inability to operate piled pressure on the few stations that had PMS on Wednesday, leading to massive queues by motorists at these outlets.

Oil marketers, however, stated that the reason for the shortage in the supply of PMS to Abuja and neighbouring states was being investigated, adding that a meeting would be held on the matter today (Thursday).

According to The Punch, the National Secretary, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief John Kekeocha said “It is obvious that there is supply shortage in Abuja and other states that are close to the FCT (Federal Capital Territory)”

He added, “This is the reason why many filling stations in these areas are not selling PMS, which, of course, has led to the serious queues you see in the few ones that are dispensing the product. I cannot tell you the reason for this supply shortage now.

“But we are meeting with NNPC Regal tomorrow (Thursday), and this is going to form part of our discussions. The matter is being looked into right now, and we hope to find a solution to it during the meeting.”

Earlier, the National President, IPMAN, Abubakar Maigandi, told our correspondent that the queues for petrol in many states would be a thing of the past when the Dangote Petroleum Refinery starts pumping out PMS to the domestic market.

But when asked whether the refinery had briefed marketers about when it would start pumping out the product, Maigandi replied, “We don’t know the time. But since he said he would start it, I know that he will do that.

“So we are still waiting and we know that once he starts releasing petrol to the domestic market, this issue of fuel scarcity and queues will become a thing of the past.”

His position was corroborated by the IPMAN National Public Relations Officer, Chief Ukadike Chinedu, who also expressed hope that the Port Harcourt Refining Company would start producing refined petroleum products very soon.

  • Commuters Stranded

It was gathered that thousands of commuters going to their various destinations were stranded at different motor parks in Anambra State on Wednesday due to the unavailability of transportation vehicles because of the shutting down of petrol stations across the state.

Most petrol stations in the major cities of Awka, Onitsha, Nnewi, Umunze, Ekwulobia and other environs remained shut and were not dispensing fuel on Wednesday morning.

As a result of this, the few vehicles plying the road increased the transportation fares by over 200 per cent while commuters who struggled to board them were made to pay the high rates.

For instance, commercial transporters charged N500 for a journey that used to be N200, while a journey of N500 was charged between N1,200 to N1,500.

The development caused many commuters to start trekking to their various destinations while others waited at the parks.

It was also observed that many offices and business premises did not open till around 10:30 am because their employees had yet to report for duty.

The reason why the petrol stations were closed could not be ascertained immediately. But the development generated a lot of mixed feelings among the public.

Some people believed that the petrol stations were on strike, others were of the opinion that it was a deliberate attempt by the marketers to increase the pump price of the commodity.

According to The Punch, a tricycle operator plying the Onitsha axis, simply identified as Tochukwu, said, “I bought fuel from the black market for as high as N1,350/litre this morning in order to work, after we discovered that filling stations did not open. Some of my colleagues went to Asaba in Delta State to get the product and that is why transportation fares are high this morning.

“We don’t really know why the filling stations are shut, but we are hearing that is like they are in a meeting somewhere in Awka. We have experienced this kind of situation before and when they came back from their meeting that day, they hiked the pump price of petrol. It’s likely to be the same situation, we are watching as events unfold.”

A commuter at Awka, Chinwe Okeke, said, “I have been standing at the Regina Caelis Bus Stop for over two hours waiting to board a vehicle to UNIZIK, but it has been difficult. The vehicles that are coming have been charging very exorbitantly, I don’t know what is really happening.”

When contacted on the development, the Anambra State Commissioner for Petroleum and Mineral Resources, Anthony Ifeanya, said, “There is no cause for alarm and commuters and motorists should not panic.

“It’s likely that the petrol marketers are in a meeting and whenever they are having such meeting, shutting of petrol stations is a way of compelling every member to attend the meeting. Their meeting usually starts from morning till noon.”

It was also observed that the sudden fare hike also affected both interstate and intrastate movements.

  • Queues In Lagos

It was observed that the NNPC filling station along Cele expressway in Lagos had long queues on Wednesday due to the fact that the pump price was selling at a lower rate of N585/litre when compared to other filling stations.

But the AP filling station located at Barracks along Chemist Bus Stop in Lagos was not selling petrol.

However, there were no queues at Jezco filling station at Oja-Oba, along Pako Bus Stop in Lagos because the station was selling at N650/litre.

The Northwest filling station along the Gbagada expressway had long queues as the pump price at this station was N610/litre.

Heavy queues were seen at the NNPC filling station along the Ogudu expressway with the station selling at N585/litre.

  • Fuel Sells At N710/Litre In Ogun

Residents of Abeokuta, Ogun State capital now buy a litre of petrol for between N650 and N710/litre.

It was observed that while many of the filling stations were not selling fuel on Wednesday, the few independent filling stations that were attending to customers sold the product at between N660 to N710/litre.

However, the NNPC mega station along Abiola Way dispensed a litre for N580 but the queues here were very long.

Eternal Oil along Kobape road with a fairly large crowd sold petrol for N660/litre while others such as KH filling station, Adigbe, among others, sold theirs at N700/litre and above.

  • Scarcity In Gombe

Fuel scarcity has hit most filling stations in the Gombe State metropolis.

Some motorists told our correspondent in the state that they suspected sabotage, as fuel was sold for between N760 to N800/litre depending on the station. The worst hit areas are the hinterlands.

Bako Hussain, a motorist, said, “We know that it is a sort of plan work by the filling stations. How can one open today and tomorrow the next one will open and the one that sold yesterday will not open.”

Also speaking, Hajara Bala, said “It is hard to get fuel in the state as the queues are building across filling stations. I think it’s artificial scarcity. I see no reason why we will have money and still wait with your N760 or more depending on the station.”

Motorists in Sokoto State also decried the continued rise in the price of petrol as the product rose to N830/litre on Wednesday.

Findings (by The Punch) in Sokoto on Wednesday evening showed that most of the filling stations that opened for business in the morning had closed their outlets before 4 pm, making the product more scarce for consumers.

Almost all the big marketers including NNPC, AA Rano, Shafa, among others, were not dispensing the product on Wednesday evening.

The few filling stations that dispensed the product on Wednesday evening sold it at between N800 and N830/litre and still had long queues.

A motorist, Abdul Ahmad, said, “How do you explain a filling station which sells fuel at the rate of N770/litre in the morning, only for you to come back in the afternoon and same people now sell at N820/litre.

“This is very bad and we should stop doing this to ourselves in this country.”

  • NNPC Silent

Meanwhile, efforts to get the NNPC to explain reasons for the queues and the fuel supply shortage in states were unsuccessful.

NNPC is currently the sole importer of petrol into Nigeria, as other marketers stopped importing the commodity due to their inability to access adequate foreign exchange required for PMS importation.

NNPC’s spokesperson, Olufemi Soneye, did not answer calls to his phone when contacted on the matter.

 

Credit: The Punch

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BREAKING: 118 Inmates Escape As Heavy Rainfall Destroys Suleja Prison

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The Medium Security Custodial Centre in Suleja, Niger State, sustained significant damage from Wednesday night’s downpour, which also made it easier for 118 prisoners to escape.

This was revealed in a statement released on Thursday and signed by Adamu Duza, the Federal Capital Territory Command spokesperson for the Nigerian Correctional Service.

Duza reported that the heavy rain severely damaged the infrastructure of the detention facility, including a break in the perimeter fence that let the prisoners escape.

As a result, the NCoS moved quickly to initiate its recapturing procedures, working with other security organisations to retrieve ten of the fugitive prisoners.

Efforts to recapture the remaining fleeing inmates are said to be ongoing.

Recognising the vulnerability of aging facilities, many of which were built during the colonial era, Duza acknowledged that the NCoS was committed to modernising its infrastructure.

The statement further noted that the Controller of Corrections, FCT Command, Francis John, assured the public that the situation was under control and urged them to carry on with their daily activities without fear.

The public was encouraged to remain vigilant and report any suspicious activities or sightings of escaped inmates to the nearest security agency.

The statement read in part, “A heavy downpour that lasted for several hours on the night of Wednesday, April 24, 2024, has wreaked havoc on the Medium Security Custodial Centres, Suleja, Niger state, as well as surrounding buildings, destroying parts of the custodial facility, including its perimeter fence, giving way to the escape of 118 inmates of the facility.

“The service has immediately activated its recapturing mechanisms, and in conjunction with sister security agencies, has so far recaptured 10 fleeing inmates and taken them into custody, while we are in hot pursuit to recapture the rest.

“The service is not unmindful of the fact that many of its facilities were built during the colonial era and that they are old and weak. The Service is making frantic efforts to ensure that all aging facilities give way to modern ones.”

“The Controller of Corrections, FCT Command, Francis John, wishes to assure the public that the service is on top of the situation and that they should go about their normal businesses without fear or hindrance,” the statement added.

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