Connect with us


BIG STORY

N950/Litre: Dangote Petrol Price May Justify More Importation — Oil Marketers

Published

on

Oil marketers have stated that the price of Premium Motor Spirit (PMS), popularly known as petrol, produced by the Dangote Petroleum Refinery and released by the Nigerian National Petroleum Company Limited (NNPC) on Monday, may justify the continued importation of the commodity into Nigeria.

Dealers also predicted that imported petrol vessels would start arriving in Nigeria from Tuesday, while calling for transparency in the pricing of PMS produced by the Dangote refinery.

The Organized Private Sector criticized NNPC’s role as the sole off-taker of petrol from the $20 billion Lekki-based refinery, calling for competition in the sector. They argued that NNPC’s sole off-taker role would not encourage competition.

On Monday, NNPC announced that it would sell petrol lifted from the Dangote refinery at a price above N1,000 per liter in the far north.

Its spokesperson, Olufemi Soneye, in a statement titled, ‘NNPC Ltd Releases Estimated Pump Prices of PMS from Dangote Refinery Based on September 2024 Pricing’.

Soneye explained that the price may go for as high as N1,019/litre in Borno State and N999.22 in Abuja, Sokoto, Kano, and others.

In Oyo, Rivers and other areas in the South, it will be N960/litre. The lowest price, according to an info graphic released by the NNPC, is N950 in Lagos and its environs.

“The NNPC Ltd has released estimated prices of Premium Motor Spirit, also known as petrol (obtained from the Dangote refinery) in its retail stations across the country.

“The NNPC Ltd also wishes to state that, in line with the provisions of the Petroleum Industry Act, PMS prices are not set by the government, but negotiated directly between parties at an arm’s length,” he stated.

The company explained that the product it loaded on Sunday was paid for in dollars.

“The NNPC Ltd can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as naira transactions will only commence on October 1, 2024.

“The NNPC Ltd assures that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100 per cent to the general public,” the statement added.

Soneye stated that the estimated pump prices of PMS were obtained from the Dangote refinery and would be across NNPC retail stations in Nigeria based on September 2024 pricing.

Recall that the Dangote Group had disagreed with NNPC on Sunday on the N898/litre PMS cost announced by NNPC as the price at which Dangote sold the commodity.

  • Petrol Importation

Major oil marketers stated that the high price of the Dangote petrol released by NNPC would encourage the importation of the commodity, as they noted that some PMS vessels might arrive in Nigeria today (Tuesday).

“As it is now, I don’t know what magic they (NNPC and Dangote) are going to perform because a lot of companies are surely going to be involved in the importation of PMS. This is because whatever is going to come out of that place (Dangote refinery), it is either there will not be enough transparency in the allocation of the product, or there will be other issues.

“Also, some big players may not get enough quantity from the plant and they will have to complete this with imported products. Like I told you, all things being equal, from September 17 (today), PMS vessels by marketers, not NNPC, should start coming into the country,” a major marketer, who spoke on condition of anonymity due to lack of authorisation to speak on the matter, stated.

The source added, “Let me also state that as it is now, you will see PMS for N1,200/litre in some stations, this can also happen in Lagos because, at N950 and N1,019/litre, there will be a market for imported products. Yes, you will see a price of N950 here and in another location, you will get it at about N1,200. It now depends on the customers.

“Those who can queue may opt for the cheaper prices and wait in the queues, while people in haste will drive into stations that sell at higher rates to buy the product. So, the price by Dangote will encourage importation. And like I told you earlier, a lot of marketers are having their cargoes before the end of the month.”

  • IPMAN Reacts

The Independent Petroleum Marketers Association of Nigeria raised concerns over the pricing of petrol from the Dangote refinery, urging NNPC to ensure that the product was not sold at a higher price than imported fuel.

IPMAN argued that such a disparity would be counterproductive to the nation’s drive for energy self-sufficiency and could negatively impact consumers and marketers alike.

According to IPMAN on Monday, the pricing strategy for locally refined petrol should reflect the advantages of domestic production, offering Nigerians a more affordable option.

The association emphasised that maintaining competitive pricing was crucial for the success of the Dangote refinery and for fostering a sustainable fuel market in the country.

IPMAN National Welfare Officer, John Kekeocha, stated this on Channels Television’s The Morning Brief breakfast programme on Monday.

“If NNPC can sell Dangote products higher than the imported products then it doesn’t make sense. What is the celebration we are having all these while then?” he queried.

The NNPC began loading the first batch of petrol from the Dangote Refinery on Sunday, saying it got petrol at N898 per litre from the private refinery.

Before lifting petrol from the Dangote Refinery on Sunday, NNPC retail outlets in Lagos sold petrol for around N855 but said a litre of Dangote petrol would sell for N950/litre in Lagos and N1,019 in Borno.

However, Dangote refinery denied selling petrol to NNPC at N898. A spokesman for the refinery Anthony Chiejina in a statement late Sunday described the claim by the NNPC as “misleading and mischievous.”

  • Terrifying Price

Reacting to the price list released by NNPC, the President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, described it as “terrifying.”

He, however, noted that the breakdown of the prices by the national oil company was clear, adding that “NNPC did not even tell us if they are making any profit from the Dangote selling price.”

Gillis-Harry stated, “This is the kind of transparency that we are requesting that the industry should be inundated with. We need this transparency so that the public will understand what they are engaged in.

“However, whatever it is, the good news is that PMS will be rolling out into the tanks of commuters and that businesses will not be grounded to a halt due to scarcity. But as for the pricing, I believe there will be a stakeholder review about it and we will make our input known.”

The PETROAN president called for minimal importation of PMS while the country should try to stabilise the supply of products from the Dangote refinery.

He again pointed out this would be achieved when there was transparency, accurate and timely information from both NNPC and Dangote refinery.

  • OPS Expresses Concern

The President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Dele Oye, said NACCIMA members were concerned about NNPC’s role as the sole off-taker for the Dangote refinery.

He said, “The arrangement whereby NNPC is the sole buyer from the Dangote refinery does indeed create a monopolistic situation, which appears to contradict the principles of a deregulated market and is in conflict with the government’s current position that they have deregulated the sector. This raises concerns about the potential distortion of pricing mechanisms and the limited opportunities for other stakeholders to participate in the market.

“The conflicting statements between Dangote refinery and NNPC further underscore the need for clarity and transparency in the fuel pricing process. The public deserves a clear explanation of the rationale behind the pricing decisions to enhance trust and confidence in our energy sector. The recent price increase, while necessary, has had a significant impact on the already challenging inflationary situation, and has led to some businesses and even some state governments resorting to remote work arrangements.”

He asserted that the NNPC needed to open the market by allowing multiple buyers from Dangote refinery.

He added, “This would not only enhance competition but also ensure that prices reflected true market realities rather than being solely dictated by regulatory control.

“Furthermore, it is imperative that the NNPCL provide a clear timeline for the completion and commencement of operations at the Port Harcourt Refinery. This would introduce much-needed competition among the local refineries, thereby strengthening our energy security.

“The current uncertainty and perceived lack of transparency, as well as the perceived lack of demonstrated support for the Dangote Refinery, may send negative signals to potential foreign and existing local investors. This could undermine President Tinubu’s efforts to attract foreign direct investment and drive economic growth. It is essential that we address these issues promptly to build a more favourable investment climate that encourages sustainable development and prosperity for our nation.”

The President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said NNPC could not prevent Dangote refinery from selling PMS to other marketers.

Idahosa noted that independent marketers had called on the NNPC to allow them decide whether they could afford to buy at whatever price Dangote would sell and then sell accordingly.

He said, “If we can sell at N900 and make a profit, that’s our problem. If we cannot sell, and we are forced to sell above N898, and there are Nigerian buyers in various parts of the country who are willing to buy because they are not ready to stay in long queues at NNPC stations that are selling at N898, so be it.”

Idahosa observed that while independent oil marketers were not restrained from buying Dangote’s PMS, they may be hesitant to compete with NNPC’s pump prices in the open market.

“What NNPC can do, and it has done, is to say whatever price we and Dangote have agreed to pay is a private treaty between the supplier Dangote and the buyer NNPC. And NNPC will sell to you and me at the pump at N898, which is the price they announced.

“So, they have yet to fix the price for Dangote to sell its products, but they have sealed the price that you and me can buy from the pump,” he continued.

The LCCI president noted that NNPC’s increase in pump price to a minimum of N898 following its purchase of PMS from the Dangote refinery came at a time when Nigerians were enmeshed in hardship and hunger worsened by declining average income levels

“It is difficult for the majority of Nigerians to afford it easily. That point is not in dispute,” Idahosa said. “The only point is, how do we gradually begin to see a reduction in the pump price of petrol?

“We have travelled through this road before (about) the high price of diesel and aviation fuel, but because the market was deregulated, it gradually and steadily came down. So, how can we see that for petrol? I think that is everyone’s primary concern,” Idahosa added.

 

Credit: The Punch

BIG STORY

N70,000 Minimum Wage: States’ Salaries Increase By 90% To N3.8tn

Published

on

The amount allocated for personnel expenses, including salaries and allowances for state civil servants, has risen from N2.036 trillion spent in 2024 to N3.87 trillion in the approved 2025 budget.

Although the 36 sub-national governments budgeted a total of N2.8 trillion for salaries, they only disbursed N2.036 trillion throughout 2024, a reduction of N764 billion, according to the budget implementation report.

Data from the 2025 approved budget for all 36 state governments shows an almost 90.23 percent increase due to the introduction of the new N70,000 minimum wage and the rise in political appointments.

These figures are also available on Open States, a platform supported by BudgIT, which serves as a repository for government budget data.

The report also revealed that at least 27 states in the federation would not be able to pay workers’ salaries this year without waiting for federal allocations from the central government.

In July 2024, President Bola Tinubu approved a substantial increase in the minimum wage for Nigerian workers, raising it from N30,000 to N70,000.

This decision came after months of intensive negotiations between the government and labor unions.

However, the implementation of the new wage increase has been gradual across the country, with some states still not adopting the revised minimum wage.

In response to this delay, the Nigerian Labour Congress issued a stern ultimatum to state governments, demanding full implementation of the new wage by December 1, 2024.

Despite this pressure, many states have yet to begin paying the revised minimum wage, further delaying the financial relief workers expected.

An in-depth analysis of the budget documents revealed significant disparities in personnel costs across states. 20 states experienced a personnel cost increase of over 50%, while 16 states saw more moderate increases below 50%.

A closer examination revealed that states like Abia, Cross Rivers, Ekiti, Niger, Rivers, and Taraba saw the highest increase in their payroll, exceeding 100% of their 2024 personnel cost budget. Conversely, states such as Gombe, Osun, and Ondo had the lowest salary increase percentages, staying below 15%.

Detailed analysis of salary increases across states showed that Abia saw a notable rise in personnel costs, escalating from N33.045 billion to N77.34 billion, a 134% increase. Similarly, Adamawa’s personnel costs rose from N48.61 billion to N74.23 billion, a 52.7% increase.

In Akwa Ibom, personnel costs surged from N91.74 billion to N126.69 billion, reflecting a 38.1% growth.

Anambra state, under Governor Charles Soludo, also approved a significant rise from N34.001 billion to N63.41 billion, indicating an 86.45% increase.

Bauchi followed suit with an increase from N42.29 billion to N70.41 billion, showcasing an uplift of about 66.5%.

Meanwhile, Bayelsa saw its personnel costs climb from N60.18 billion to N114.21 billion, a rise of over 89%, indicating a strong investment in its workforce.

In Cross River, the personnel cost grew sharply from N35.02 billion to N106.12 billion, a 202% increase, one of the highest among the states. Delta also recorded a significant increase from N139.999 billion to N185 billion, reflecting a 32.5% rise.

Ebonyi had an increase from N23.076 billion to N36.66 billion, growing by 58.9%.

Edo’s personnel expenses surged from N74.58 billion to N101.29 billion, a 35.8% increase, while Ekiti saw a notable rise from N30.69 billion to N62.51 billion, almost doubling its personnel cost.

Enugu also experienced a substantial rise from N47.988 billion to N70.954 billion, a 48% increase.

However, Gombe stood out with a slight decrease in personnel costs, falling from N40.52 billion to N40.28 billion, a dip of just 0.6%.

On the other hand, Imo saw an increase from N41.92 billion to N67.4 billion, showing a rise of 60.9%.

Jigawa’s personnel costs jumped from N51.445 billion to N90.73 billion, a 76.4% increase, while Kaduna’s personnel expenses grew by 23.4%, rising from N68.010 billion to N83.94 billion.

Kano, which saw one of the largest increases, saw its personnel costs surge from N89.97 billion to N150.996 billion, a staggering 67.8% rise.

Katsina, with an increase from N29.69 billion to N58.62 billion, experienced a growth rate of 97.6%. Kogi’s personnel budget grew from N64.798 billion to N109.96 billion, an increase of 69.8%.

Kwara followed a similar trend, rising from N51.045 billion to N69.152 billion, a growth of 35.5%.

Lagos saw the largest increase, more than doubling its personnel costs from N225.114 billion to N401.12 billion.

In Nasarawa, personnel expenses rose from N48.704 billion to N80.456 billion, a 65.2% increase, while Niger saw an even more significant leap from N25.36 billion to N104.301 billion, a growth of 311.5%. Ondo experienced an increase from N75.96 billion to N139.726 billion, an 83.9% rise, while Osun also registered a significant increase, from N55.571 billion to N102.89 billion, an 85.1% growth.

Oyo experienced a massive increase in personnel costs, rising from N116.207 billion to N214.116 billion, an 84.3% increase.

Similarly, Plateau saw its personnel expenditure climb from N38.963 billion to N67.144 billion, marking a 72.5% increase.

Rivers State, under Governor Siminalayi Fubara, recorded a remarkable rise from N167.05 billion to N343.196 billion, a 105.6% increase.

Sokoto also saw a significant increase, from N55.32 billion to N64.711 billion, a 17% rise.

Taraba experienced a notable increase from N36.319 billion to N95.23 billion, a 162% rise, while Yobe recorded a 34% increase, rising from N47.95 billion to N64.12 billion.

Zamfara saw a moderate increase, with personnel costs rising from N34.21 billion to N58.38 billion, a growth of 70.7%.

Meanwhile, the substantial rise in salaries and allowances across various states has introduced new challenges.

With the sharp increase in personnel costs, at least 27 states now face the reality of being unable to meet their payroll obligations without depending on federal allocations from the central government.

This means only 9 out of the 36 state governments can independently pay their workers without relying on federal funds.

This represents an increase from 24 states that couldn’t cover their salaries without federal assistance in 2024, based on the analysis of state governments’ approved budgets for the 2024 fiscal year.

States with strong internal revenue include Lagos, Abia, Benue, Enugu, Ogun, Niger, Kaduna, Kwara, and Osun.

According to the budget analysis, 27 states cannot cover their salary expenses from internally generated revenue alone and may have to rely on federal allocations or borrow from banks and related institutions.

This situation means the wage bills in these states now surpass their internally generated revenue, raising concerns about worker productivity and the states’ efficiency in generating revenue.

Speaking (with The Punch), the economist emphasized that the latest data highlights the need to reduce governance costs across the country.

Commenting on the situation, Muda Yusuf, director and CEO of the Centre for the Promotion of Private Enterprise, argued that several factors contribute to states’ low revenue generation and bloated civil service workforces.

He explained, “The IGR issue must be recognized, as there are significant disparities in states’ natural resources. You can’t compare a coastal state like Lagos or Delta, which have numerous oil companies that pay taxes through P.A.Y.E., with states like Jigawa, Gombe, or Kogi, where most businesses are SMEs, and agriculture is predominant. How much IGR can you generate from these businesses? Essentially, these states rely heavily on workers’ salaries for IGR.

“The second issue is the bloated workforce many states have, which they don’t need. In some ministries, there are ghost workers, and some employees don’t even show up at work. Some ministries could operate efficiently with half the staff they have. But due to political pressures and other factors, they carry far too many workers.”

Professor Segun Ajibola, an economics professor at Babcock University, emphasized that states must strive to raise internal revenue without putting excessive pressure on their citizens. He also urged states to reduce governance costs, eliminate waste, streamline ministries, and improve transparency.

Marcel Okeke, former chief economist at Zenith Bank, pointed out that the expansion of ministries and governance at the national level would impact subnational wage bills.

“Most decisions by governors are politically driven rather than economically sound,” he stated. “From the location of companies to the appointment of aides and advisers, there are cases of governors appointing hundreds or thousands of assistants. What are these people doing? Can’t they manage with fewer assistants? Additionally, many ministries are bloated, with positions that should be held by one person being filled by five people, some of whom carry files without contributing meaningfully. Conducting staff audits can help address these issues.”

Okechukwu Nwagunma, executive director of the Rule of Law and Accountability Advocacy Centre, criticized government officials for their lack of vision, sincerity and patriotism.

Nwagunma pointed out that despite promises from the president to cut the cost of governance by reducing the number of appointees and ministries, the reality is the opposite—new ministries are being created, and a record number of appointees are being appointed.

He said, “The government at all levels in Nigeria is composed mainly of people who are visionless, insincere, unpatriotic, selfish, and insensitive to the suffering of the people they claim to serve.

“They do the opposite of everything they claim they will do. The president talked about reducing the cost of governance by pruning down the number of government appointees and ministries. But the president is busy creating new ministries and appointing the highest ever number of appointees, both as ministers and aides.

“The same thing is happening at the state levels. State governors appoint needless numbers of aides with almost every other aid having their aides. While the state of the economy continues to worsen, with government policies unable to alleviate the suffering of the majority of Nigerians who continue to groan in deprivation, poverty, and hunger, the same government officials continue to live in obscene and provocative opulence and extravagant lifestyles. And they ask Nigerians to be patient and to continue to make sacrifices.”

 

Credit: The Punch

Continue Reading

BIG STORY

I Try Not To Be The Type Of Man My Dad Was Towards Women — Clarence Peters

Published

on

Clarence Peters, the Nigerian music video director, has spoken about his complex relationship with his father, the renowned juju singer Shina Peters.

In a recent episode of the WithChude podcast, Peters shared his thoughts on his father’s past mistakes, particularly regarding his treatment of women and how it has shaped his own approach to relationships.

He revealed that Shina, 66, “screwed up” by failing to protect his celebrity mother, Clarion Chukwura, 60, who he said “was blackballed by his (Shina’s) colleagues.”

The 41-year-old explained that the experience had a significant impact on him and that he has made a deliberate effort to avoid repeating his father’s mistakes in his own relationships with women.

“My dad screwed up, I mean using the word screwed up is me putting it lightly because his colleagues blackballed my mum and she was already dealing with a lot of trauma from when she was young,” he said.

“In making ‘Inside Life’, I started to discover some of the things I did not know. Episode 5 of ‘Inside Life’ is written by my cousin who went through that and so my mum went through the script and started crying because she also went through the same thing.

“We keep forgetting that it was a different time. My mum told me recently that he has been with women, driven some of the amazing cars, stayed in the best houses, hotels, he has had money. He is approaching his 70s, death is certain because we are all going to die.

“All he can do now is pray to God to forgive him and that is all that he has and so we have had that conversation. My father has made mistakes that I have also made, so I can’t judge him. I can relate to the mistakes that my father has made.

“As much as I was raised by my mother, one of my greatest fears was not to be my father to the opposite sex. I have been a version of that, so I am not a saint. So I cannot judge him. I would like to but I am in the position to.”

Continue Reading

BIG STORY

MAN Faults NPA’s 15% Tariff Hike, Says “It’s Ill-Timed”

Published

on

The Manufacturers Association of Nigeria (MAN) has criticized the Nigerian Ports Authority’s (NPA) proposed 15 percent increase in tariffs.

On February 6, the NPA announced it had secured approval for a 15 percent tariff increase to improve infrastructure and upgrade equipment. This is the first tariff hike since 1993.

In a statement on Sunday, Segun Ajayi-Kadir, MAN’s director-general, pointed out that the manufacturing sector is already burdened with numerous challenges.

Ajayi-Kadir described the timing of the increase as detrimental, emphasizing that businesses are struggling with rising operational costs, a high rate of foreign exchange (FX), and other economic uncertainties.

He also noted that Nigeria’s current economic situation is marked by rising inflation, FX challenges, and declining industrial capacity utilization.

Ajayi-Kadir stressed that ports, as gateways to international trade, play a crucial role in the efficiency and cost-effectiveness of business operations.

“According to the United Nations Conference on Trade and Development (UNCTAD), 80 percent of Nigeria’s traded goods are transported by sea, with 70 percent of total imports and exports in West and Central Africa destined for Nigeria,” he said.

“This underscores the critical role Nigerian ports play in facilitating trade and industrial productivity.

“For manufacturers, port-related charges constitute significant indirect costs, as most raw materials and industrial machinery are imported through these ports.

“Any increase in charges will have a ripple effect, leading to higher production costs, increased inflationary pressures, and reduced competitiveness of locally manufactured goods.”

Ajayi-Kadir further stated that many businesses are experiencing a downturn due to unsustainable operating costs.

He argued that the increase is poorly timed and could signal a departure from the government’s stated commitment to improving the ease of doing business.

‘UPWARD REVIEW WILL LEAD TO JOB LOSSES, LOW ACTIVITIES’

Ajayi-Kadir warned that the additional strain on industrial activities will likely result in reduced capacity utilization and potential job losses.

“Furthermore, Nigeria must remain competitive in regional trade,” he added.

“Neighboring countries with more efficient and cost-effective ports will become far more attractive alternatives, leading to increased cargo diversion.

“This will not only reduce revenue for the Nigerian government but will encourage smuggling and other untoward trade practices that weaken our economy.”

Ajayi-Kadir suggested alternative methods for increasing port revenue, such as reducing turnaround time for vessels, improving cargo clearing processes, addressing bottlenecks, and focusing on infrastructural development.

“While we acknowledge the need for revenue generation, increasing port tariffs can be counterproductive in the long run,” he said.

The MAN DG called on the NPA to put the proposed 15 percent tariff increase on hold and collaborate with stakeholders to explore long-term revenue generation options.

Continue Reading



 

Join Us On Facebook

Most Popular