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NNPCL Hints Petrol Supply Disruption Amid $6 Billion Debt To Suppliers

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Nigeria National Petroleum Company Limited (NNPCL) has acknowledged that its financial struggles may compromise the sustainability of petrol supply nationwide.

This admission follows reports of a staggering $6 billion debt to suppliers, leading to reluctance among supply agents to provide the product.

Consequently, NNPCL has resorted to rationing stocks and urging major suppliers to continue deliveries despite payment concerns.

A major supplier revealed that at least five vessels destined for Nigeria refused to unload fuel due to fear of non-payment.

The Federal Government’s $300 million bailout has proven insufficient to sustain nationwide petrol supply.

The crisis resulted in severe fuel scarcity yesterday, with only a few filling stations dispensing petrol. Motorists in Lagos, Abuja, and other cities faced lengthy queues, highlighting the urgency of the situation.

Independent marketers took advantage of the situation to sell a litre of petrol for as high as N950 in some parts of Lagos. It sold for more in other states.

There were indications that the Federal Government was weighing options.

The NNPCL admitted the financial strain in a statement by its Chief Corporate Communications Officer, Olufemi Soneye.

“NNPC Ltd has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers.

“This financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply.

“In line with the Petroleum Industry Act (PIA), NNPC Ltd remains dedicated to its role as the supplier of last resort, ensuring national energy security.

“We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” Soneye said.

“The Federal Government is already weighing options because of the security implications of acute shortage of petrol in the country.”

On Saturday, Soneye said in the oil trading business, transactions often operate on credit with intermittent outstanding balances, saying there was nothing extraordinary in the outstanding financial liabilities.

He was reacting to reports by Reuters that the uncertainty over the payment of the $6 billion has made most suppliers “hesitant” in bringing in products.

The international news agency had indicated that Afreximbank disbursed $925 million to NNPCL as part of a syndicated $3.3 billion crude oil-backed prepayment facility.

The NNPCL, using supply agents, has been the sole importer of petrol.

The NNPCL is “struggling to supply dealers due to shortage of product at its tanks”, a source confirmed at the weekend.

The source said: “Bulk sales of ships and trucks to depot owners have slowed down in the last five days due to a shortage of supply.

“No bulk sales had happened since Tuesday, which heightened the scarcity in the downstream sector.”

An oil chief who is in the know of the goings-on in the industry linked the fuel queues being experienced in the last eight weeks “largely to the reduction in the supply of products by suppliers who were being owed.”

“I was aware that at some point in mid-August, the Federal Government had to come in by giving money to NNPC to defray some of the outstanding liabilities and boost the confidence of the suppliers to continue.

“However, what was paid was about $300 million which only helped in getting a reprieve for about a week before the queues fully returned,” he said.

Another source said: “Suppliers of petrol are hesitant about supplying new products to the Nigeria National Petroleum Company Limited (NNPCL) due to piling debts.

“At present at least five vessels originally intended for supply to Nigeria have refused to discharge fuel to NNPCL due to fear of payment.

“The situation has increased pressure on the petroleum company which has now resorted to rationing the stock it has while appealing to its long-term suppliers not to halt supplies.”

Reuters said: “Nigeria’s debt to gasoline suppliers has surpassed $6billion – doubling since early April – as state oil firm NNPCL struggles to cover the gap between fixed pump prices and international fuel costs, under rising cost of living.”

The agency said the company had still not paid for some January imports, and the late payments amount to $4 billion to $5 billion.

Under contract terms, NNPCL is meant to pay within 90 days of delivery.

“The only reason traders are putting up with it is the $250,000 a month (per cargo) for late payment compensation,” one industry source said.

The news agency said: “At least two suppliers already stopped participating in recent tenders after hitting self-imposed debt exposure limits to Nigeria, the sources said, meaning they will not send more gasoline until they receive payments.

“Nigeria’s tenders to buy gasoline in June and July were smaller, traders said. NNPC will import via tender about 850,000 tonnes in July, two of the sources said, down from the typical one million tonnes in previous months.”

  • Price Not Sustainable

On August 19, the oil giant claimed the government has been moderating the average retail price of petrol, with a view to ensuring that Nigerians have access to it at a stable price.

The NNPCL said it has been making PMS available for retail distribution at about half of the landing cost under an agreement with the government to safeguard Nigerians from the global fluctuation in oil prices.

Its Chief Financial Officer Umar Ajiya explained that the company has been offsetting the shortfall in landing price and sale price through a reconciliation arrangement between the government and the company.

He said the company has not paid any money to any marketer in the name of petrol subsidy in the last eight to nine years.

While the official pump price of petrol is about N600 per litre, the average landing cost is about N1,200.

The Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, said the NNPC Limited needed to adjust its pricing strategy for imported fuel to curb smuggling.

He also admitted that NNPCL had financial constraints in maintaining and rebuilding Nigeria’s ageing pipelines.

Lokpobiri said the weak pipelines are susceptible to vandalism.

Lokpobiri, who spoke at the 2024 Energy and Labour Summit in Abuja, said selling imported fuel below the landing cost is a key factor fueling smuggling activities.

He said: “If NNPC imports PMS and sells to marketers at perhaps N600 or below, there’s no way that smuggling can stop.

“When smugglers are taking the products outside the country, even if you put all the policemen on the road, they are Nigerians; you and I know the answer.

“These pipelines, some dating back to the 1960s and 1970s, are highly susceptible to vandalism and crude oil theft, which significantly impacts the nation’s oil revenue.

“The old, corroded pipelines, some of which date back to the 1960s and 1970s, are easily vandalised,” Lokpobiri explained.

Former Vice President Atiku Abubakar yesterday urged the Federal Government to ensure the immediate listing of NNPCL shares on the stock exchange in line with the Petroleum Industry Act.

He was reacting in a statement yesterday by his media office on the decision of the NNPCL to hand over the Warri and Kaduna refineries to private operators who are expected to manage and operate them.

Atiku emphasised that such previous efforts under government supervision never worked.

The statement reads: “The NNPCL is supposed to have been listed on the stock exchange in line with the Petroleum Industry Act.

“This would make the company more profitable and enhance transparency and corporate governance.”

BIG STORY

Tokunbo Wahab – The Steadfast Architect Of Lagos’ Water Revolution — By Babajide Fadoju

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In a city like Lagos, the hum of progress is often drowned out by the challenges of rapid urbanization, infrastructure projects can feel like distant promises rather than tangible realities. Yet, under the leadership of Governor Babajide Sanwo-Olu, Lagos State is steadily rewriting this narrative. One of the most transformative projects underway is the Adiyan Water Works (AWW), a bold initiative set to deliver 70 million gallons of clean, potable water daily to Lagosians. At the helm of this ambitious endeavor is Tokunbo Wahab, the Honourable Commissioner for the Environment and Water Resources—a man whose quiet determination and unwavering focus have become a source of hope for millions.

When Governor Sanwo-Olu recently visited the Adiyan Water Works site, it wasn’t just a routine inspection. It was a moment of affirmation—a recognition of the hard work and vision driving this project forward. As the governor walked through the site, the air buzzed with excitement, not just for the technical milestones achieved, but for what this project represents: a future where clean water is no longer a luxury but a given. For Tokunbo Wahab, this visit was a validation of his tireless efforts to turn a lofty vision into a reality that will touch the lives of everyday Lagosians.

The commissioner’s role in this project is nothing short of pivotal. Steering a project of this magnitude in a city as complex as Lagos is no small feat. Yet, under his watchful eye , the Adiyan Water Works has reached an impressive 80% completion rate. This isn’t just a statistic; it’s a testament to Wahab’s ability to navigate bureaucratic hurdles, logistical challenges, and the occasional skepticism that comes with large-scale infrastructure projects. His approach is not just about meeting deadlines; it’s about ensuring that every drop of water delivered will make a difference in the lives of Lagosians.

What sets Wahab apart is his deep understanding of what this project means for the people of Lagos. For him, it’s not just about pipes, pumps, and gallons per day. It’s about the mother who won’t have to walk miles to fetch water for her family. It’s about the child who can focus on school instead of worrying about waterborne diseases. It’s about the small business owner who can thrive with a reliable water supply. Wahab’s work is rooted in the belief that access to clean water is a fundamental right, and his actions reflect a commitment to making that right a reality for all.

The trust Governor Sanwo-Olu places in Wahab is evident. Their partnership is a rare example of how political leadership and administrative execution can come together to achieve something extraordinary. The governor’s frequent visits to the site and his public support for the project are not just gestures of goodwill; they are a recognition of Wahab’s ability to deliver on promises. In a political climate often marred by mistrust and unmet expectations, this synergy is a breath of fresh air.

But the Adiyan Water Works project is more than just an infrastructure upgrade. It’s a symbol of hope and progress for a city that has long grappled with water scarcity. When completed, it will not only improve public health but also boost local economies, create jobs, and attract investments. For communities that have endured years of unreliable water services, this project is a lifeline—a promise of dignity and a better quality of life.

Of course, the journey hasn’t been without its challenges. Large-scale projects like this require more than just technical expertise; they demand empathy and a deep connection to the communities they serve. Wahab has been mindful of this every step of the way. From ensuring fair compensation for affected residents to collaborating with neighboring states like Ogun, his approach has been inclusive and thoughtful. He understands that true progress is not just about building infrastructure but about building trust and fostering collaboration.

Critics may argue that such projects are fraught with complexities, and they’re not wrong. But Wahab’s track record shows that with determination, transparency, and a clear vision, even the most daunting challenges can be overcome. His work on the Adiyan Water Works is a shining example of what public service should be—a commitment to the greater good, even when the road is tough.

As Lagos continues to grow and evolve, the importance of reliable infrastructure cannot be overstated. Clean water is the foundation of health, education, and economic prosperity. The Adiyan Water Works project, under Wahab’s stewardship, is poised to become a cornerstone of Lagos’ transformation. And as the city eagerly awaits the day when clean water flows freely into every home, it’s clear that leaders like Tokunbo Wahab are the driving force behind this progress.

In the end, the success of the Adiyan Water Works will be more than just a technical achievement. It will be a story of hope, resilience, and the power of dedicated leadership. Tokunbo Wahab’s work is a reminder that even in the face of immense challenges, change is possible when leaders put people first. As the water begins to flow, so too will the promise of a brighter, more sustainable future for Lagos—a future built on the foundation of clean water and unwavering commitment.

Let the water flow, and with it, let the promise of progress and prosperity flow for all Lagosians.

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BIG STORY

Lagos House Of Assembly Call For Action Against Open Defecation, Laud Environment Commissioner Tokunbo Wahab

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The Lagos State House of Assembly has called on the Ministry of Environment and Water Resources to rigorously enforce environmental laws against “open defecation” and ensure the widespread availability of free public toilets across the state.

The lawmakers stressed the need for a broad and ongoing awareness campaign to educate residents about the dangers of “open defecation.” Speaker, Rt. Hon. Mojisola Meranda, condemned the practice, emphasizing the urgent need for better sanitation infrastructure.

The House also praised the Commissioner for the Environment and Water Resources, Tokunbo Wahab, calling him a “pride of the state.”

Raising the matter under “Urgent Public Importance,” Hon. Stephen Ogundipe (Oshodi-Isolo 1) warned that “open defecation” tarnishes Lagos’ reputation and obstructs sustainable development.

Hon. Bonu Solomon (Badagry 1) called for the arrest of homeless individuals contributing to the sanitation crisis, urging local government chairmen to assist the state in maintaining cleanliness.

Hon. Gbolahan Yishawu (Eti-Osa 1) proposed the introduction of affordable public toilets, while Hon. Femi Saheed (Kosofe 2) urged the creation of clear policies regarding the management of public sanitation facilities.

Hon. Aro Moshood (Ikorodu 2) connected waste accumulation to “open defecation,” underscoring the need for stricter waste management, particularly in market areas like Mile 12.

The Assembly resolved to ramp up public awareness campaigns and collaborate with private companies to fund sanitation initiatives across Lagos.

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BIG STORY

JUST IN: Nollywood Star, Kenneth Okonkwo Resigns From Labour Party

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Kenneth Okonkwo, a former spokesperson for the Labour Party’s presidential campaign council, has announced his resignation from the party.

In a statement released on Tuesday, Okonkwo stated that his resignation will take effect from February 25, 2025, after which he will be free to join other like-minded Nigerians in shaping the country’s future.

He explained that his involvement in politics was driven by a desire for good governance, and he will continue working towards this goal.

Okonkwo expressed his gratitude to Nigerians who supported the party during its time of need and pledged his loyalty to the Nigerian people. He also mentioned that the Labour Party, in its current state, is non-existent, which led to his decision to resign.

His statement reads:

11th February, 2025

To all Nigerians of Goodwill,

RESIGNATION FROM LABOUR PARTY

I sincerely thank all Nigerians of goodwill for their immense support during the 2023 presidential election, where Nigerians believed in our message for a new Nigeria and voted for us across ethnic and religious lines. We were the only party that achieved 25% support in all six Geo-Political Zones and the Federal Capital Territory. I believe that we won the election under the Labour Party with your support but were denied victory due to a technical glitch.

2. By February 25, 2025, it will be two years since the 2023 presidential election, and two years before the next presidential election. It is a global democratic convention that political consultations, alignments, and re-alignments begin two years before the next election. Unfortunately, the Labour Party, as it is currently structured, cannot be part of the political force that will shape Nigeria’s political future.

3. To avoid any confusion, the Labour Party as it stands is non-existent. According to the Labour Party Constitution, the tenure of ward, local government, and state party executives is three years (see Article 15(2)(3)(4) of the Labour Party Constitution). Since no congresses have been held at these levels within the constitutionally allowed tenure, their leaderships have effectively expired.

4. The former National Chairman of the Labour Party, Julius Abure, and his National Working Committee, having not conducted any legally recognized national convention, according to the Independent National Electoral Commission (INEC) and the courts, the leadership issue within the Labour Party remains an internal matter that the courts cannot intervene in, leaving the party without effective national leadership.

5. The Caretaker Committee, led by Senator Nenadi Usman, which was lawfully set up by the National Executive Council (NEC) of the Labour Party after the INEC’s non-recognition of the Abure-led National Working Committee (NWC), was given six months to conduct congresses and a convention. This was the only viable option to salvage the Labour Party.

6. Unfortunately, Abure and his allies, in collaboration with external forces, have waged unnecessary legal challenges against this Caretaker Committee, preventing it from functioning. More than six months after the Committee’s inauguration, it has not even started, leading many to believe that the objective of these politicians and their collaborators is to bog down the serious members of the Labour Party with frivolous lawsuits until the 2027 election is over. It’s curious that a national executive whose members are defecting daily to other parties, and who cannot fight legal battles to recover these seats, is waging intense legal battles to maintain their destructive grip on the party.

7. It’s clear that Abure is more concerned with his own interests than with the survival of the Labour Party. If he were genuinely interested in fielding a southern candidate for the 2027 presidential election, he would have ceded the position of national chairman to the North, as is the convention when a party aims to field a southern presidential candidate. This was a suggestion from those of us genuinely interested in the party’s survival. While Nigerians, especially in the North, may have overlooked the combination of a southern national chairman and presidential candidate in 2023, they will not overlook it in 2027, having had time to prepare.

8. By not doing this, it’s obvious that Abure and his colleagues want to use some southern presidential candidates as cash cows, generating money for them without any intention of making the party competitive in 2027. This confirms the belief that they are secretly working for the ruling party’s victory. I pity any southern presidential candidate who still believes there’s a future in an Abure-led Labour Party, as they are clearly unaware of Nigeria’s current political realities.

9. I have never been deceitful or betrayed any cause I’ve fought for. My entry into politics was driven by the desire for good governance, and I will continue working for it to ensure that Nigeria becomes a great country led by incorruptible leaders. However, this can no longer be achieved within the current Labour Party, which, as presently constituted, is non-existent. Therefore, I am forced to resign from the party and thank all Nigerians of goodwill who supported us when we needed them most. I pledge my continued loyalty to the Nigerian people, regardless of the political path I choose to follow.

10. This resignation takes effect on February 25, 2025, marking the second anniversary of the 2023 presidential election. After this date, I will be free to join other well-meaning, like-minded Nigerians in shaping a brighter future for our country through good governance.

 

Thank you, and God bless.

Yours sincerely,

Kenneth Okonkwo

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