‘This Is Unsustainable’: Again, Sanusi Calls For Removal Of Subsidy

 

A former Governor of the Central Bank of Nigeria (CBN) Sanusi Lamido has again defended calls for the removal of subsidy on petroleum products.

He spoke at a colloquium to mark his 60th birthday in Kaduna on Saturday.

Sanusi, who was a former Emir of Kano, said payment of subsidy on petroleum products is unsustainable.

“Many years ago, when I was screaming about the trillions being spent on fuel subsidy, I remember there was actually an attempt to attack my house in Kano. I was in the Central Bank. Where are we today? We are face to face with the reality that this [fuel subsidy] is unsustainable,” the economist and banker explained during the event.

Nigeria spends over ₦100 billion monthly on subsidy, a development Finance Minister Zainab Ahmed confirmed at a public consultative forum on the draft 2022-2024 medium-term expenditure framework/ fiscal strategy paper (MTEF/FSP).

“We have a situation wherein a month, the subsidy costs as much as ₦150 billion,” she said at the event held in July. 

“That means NNPC has to use that amount to pay for buying the PMS and distributing it across the country.”

But Sanusi believes that subsidy should have been removed several years ago.

“And when the decision is taken,” he added, “it will even be more painful and much more difficult than if we had taken it 10 years ago or five years ago.”

Paying The Price

A file photo Lamido Sanusi II.

 

Sanusi also attributed the rising cost of living to the increased level of insecurity and poverty in Nigeria 

“It is a price we see in increased poverty, it is a price we see in insecurity, it is a price we see in the high rate of inflation, it is a price we see in the loss of the value of our currency, it is a price we see in the numbers around malnutrition, around unemployment, around out of school children, maternal mortality and infant mortality.”

Moves by past governments to remove subsidy on petroleum products – introduced in the ‘70s – have met stiff opposition and generated heated debates among Nigerians. 

Why Nigeria Is Still Subsidising Petroleum – NNPC Chief

 

Solomon Elusoji, Lagos

The Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, on Tuesday suggested that the inability to find an appropriate price for petrol has forced the continuation of the subsidy scheme.

The NNPC is currently the sole, official importer of petroleum products into the country.

While its landing price is about N256 per litre, according to Mr Kyari, petrol sells for N162 to N165 in most parts of Lagos.

In March 2020, the Federal Government said it would allow market forces to dictate the pump price of petrol.

But after oil prices rose in the preceding months, the Federal Government decided not to adjust the price correspondingly under pressure from organised labour.

“The reality is that we cannot afford it,” Mr Kyari said on Tuesday while appearing on Channels Television’s Sunrise Daily.

“But also the second reality is if you don’t do something smart, you could end up throwing prices at Nigerians that are well above prices that they should pay for.”

The NNPC chief said the government is still engaging with organised labour and other stakeholders on how to properly price the product.

“The engagement is aimed at making sure there is a reasonable level of pricing that we can do that will recover the cost,” he said.

Fuel smuggling

Meanwhile, a huge chunk of the petroleum the NNPC pays for is being smuggled to neighbouring countries where they are sold at higher prices.

“Petroleum consumption in Nigeria is not up to 60 million litres per day, but we supply up to that,” Mr Kyari said.

“We always plan with 60 million litres, because anytime we do below that, there is a crisis.”

He acknowledged that there “are sharp practices which we are trying to control” and “an organised cross-border smuggling of petroleum, which is associated with the price of petroleum itself.”

The smuggling, he noted, is exacerbated by the fact that Nigeria shares borders with countries who have no choice but to transport petroleum by road.

When borders were shut last year, the NNPC chief said, consumption fell to 52 to 53 million litres per day. And during the thick of the COVID-19 lockdown in 2020, the number fell to about 42 million litres.

“If everything works well and consumption is limited to our country, we are dealing with about 42 million litres,” Mr Kyari said.

‘How Many Nigerians Have Cars, Generators?’: Presidency Defends Petrol Hike

 

The Presidency has continued to defend the recent hike in petrol prices, as spokesman Garba Shehu on Friday questioned how many Nigerians benefit from low fuel charges.

The Buhari administration earlier this year put in motion plans to cut out fuel subsidy and deregulate the petroleum downstream sector.

Since then, prices of petrol have fallen, in line with a dip in international demand attributed to the coronavirus pandemic.

However, in September, the price of petrol went up, sparking outrage among many Nigerians.

Some have blamed the government for allowing the prices to rise even as many Nigerians are still dealing with the effects of the pandemic.

On Friday, during an interview on Channels Television’s Politics Today, Mr Shehu argued that it is unfair for poor Nigerians to continue to subsidise the lifestyle of urban dwellers.

“We belong to a global market system,” Mr Shehu said. “We are buying, mostly, refined products from the international markets.

“Is it fair that the taxpayer’s money . . . how many Nigerians have cars anyway? How many of them run generators in their homes that they need this fuel for? Is it fair that the farmer and the herder and all of these low-level people in our society, that the taxpayer money is taken from them and is subsidising the lifestyle of our city, urban dwellers?

“So the President is just trying to be as practical as possible on this matter.”

Deregulation is the answer

Mr Shehu also defended President Muhammadu Buhari’s comments on Independence day, where he compared the price of fuel in Nigeria with that obtained in Saudi Arabia.

He said: “So Saudi Arabia is important in this discussion because what is the technical cost of producing a barrel of oil in Saudi Arabia? It’s not more than a quarter of what we spend here. And yet you see that they charge more than Nigeria. How much comes to Nigeria? One, you look at their technical cost. So therefore Nigerians should be realistic.”

He added that it was unwise for the government to continue to determine prices and be an active player in the petroleum industry.

Deregulation, Mr Shehu argued, will see an end to long queues during festive periods.

“Government is not the best manager of businesses; we should surrender them to the market,” he said.

“We have done this with the telecoms; the telecoms are serving the whole nation excellently well, and when we do this with petrol, we will no longer have to cope with queues, spending two nights ahead of Christmas travel.

“All nations of the world put this thing to the market. We should no longer pretend.”

Electricity, Fuel Price Hike Will Benefit Nigerians In The Long Run – Lai Mohammed

 

The Minister of Information, Lai Mohammed on Saturday said the recent increase in electricity and fuel prices will benefit ordinary Nigerians in the long-run.

Mr Mohammed made the remarks while meeting with online publishers in Lagos.

He also appealed to the Nigeria Labour Congress to shelve its industrial action planned for Monday.

READ ALSO: NLC Insists On Monday Protest Despite Court Order

The planned action, which is being organised as a protest against the increases, can only bring more hardship to ordinary Nigerians, Mr Mohammed argued.

“Ordinary citizens are not the beneficiaries of the subsidy on petroleum products that has lasted for years,” the Minister said, adding that the government can no longer afford the cost of the subsidy.

The Minister also argued that despite the increase, Nigerians still pay less for fuel, compared to neighbouring countries.

On electricity, Mr Mohammed said the hike will lead to increased quality in the supply of power, noting that the government cannot sustain its subsidy to the sector.

Again, he stressed that Nigerians still pay less for electricity, compared to people in neighbouring countries.

“We thank Nigerians for their understanding, and wish to appeal to
them to please bear with the government,” he said.

 

READ FULL TEXT OF THE MINISTER’S SATURDAY BRIEFING

TEXT OF THE BRIEFING BY THE HON. MINISTER OF INFORMATION AND CULTURE, ALHAJI LAI MOHAMMED, DURING MEETING WITH ONLINE PUBLISHERS IN LAGOS ON SATURDAY, 26 SEPT 2020 ON THE RECENT INCREASES IN PETROL AND ELECTRICITY PRICES.

Good morning gentlemen, and thank you most sincerely for honouring our
invitation to this briefing.

2. As you are aware, the hike in the cost of fuel as a consequence of deregulation and the higher prices occasioned by service-based electricity tariff adjustment have led to various reactions, especially from organized labour which has threatened a nationwide strike. It has also led to accusation of insensitivity on the part of government.

3. I want to assure Nigerians, through you – gentlemen of the press – that the government is not insensitive to their plight. As a matter of fact, the full deregulation of the petroleum sector and the service-based electricity tariff adjustment will in the long run benefit the ordinary people

4. Let’s start with deregulation. Ordinary citizens are not the beneficiaries of the subsidy on petroleum products that has lasted for years. Between 2006 and 2019, a total of 10.4 trillion Naira was spent on fuel subsidy, most of which went to fat cats who either collected subsidy for products they didn’t import or diverted the products to neighbouring countries, where prices are much higher. Instead of subsidy, ordinary Nigerians were subjected to scarcity of petroleum products. They endured incessant long queues and paid higher to get the products, thus making the subsidy ineffectual.

5. Apart from that, the truth is that the government can no longer afford the cost of subsidy, especially under the prevailing economic conditions. Revenues and foreign exchange earnings by the government have fallen by almost 60%, due to the downturn in the fortunes of the oil sector. And there is no provision for subsidy in the revised 2020 budget. So where will the subsidy money come from? Remember that despite the massive fall in revenues, the government still has to sustain expenditures, especially on salaries and capital projects.

6. Still on subsidy, as I said, from 2006 to 2019, fuel subsidy gulped 10.4 trillion Naira. That is an average of 743.8 billion Naira per annum. According to figures provided by the NNPC, the breakdown of the 14-year subsidy is as follows:

– – In 2006 Subsidy was 257bn
– In 2007 Subsidy was 272bn
– In 2008 Subsidy was 631bn
– In 2009 469bn
– In 2010 667bn
– In 2011 2.105tn
– In 2012 1.355tn
– In 2013 1.316tn
– In 2014 1.217tn
– In 2015 654bn
– In 2016 Figure Not Available
– In 2017 Subsidy was 144.3bn
– In 2018 730.86bn
– And in 2019 Subsidy was 595bn

7. The drastic fall in the revenues of the government explains why the government had to take certain tough decisions, even as it is acting to mitigate the effect of the economic slowdown by adopting an Economic Sustainability Plan. One of such difficult decisions, which we took at the beginning of the Covid-19 pandemic in March – when oil prices collapsed at the height of the global lockdown – was the deregulation of the prices of PMS.

8. Recall that the benefit of lower prices at that time was passed to consumers. Everyone welcomed the lower fuel price then. Again, the effect of deregulation is that PMS prices will change with changes in global oil prices. This means quite regrettably that as oil prices recover, there will be some increases in PMS prices. This is what has happened now. I am sure Nigerians will prefer to pay slightly higher for PMS than to queue for hours just to get the products at higher prices.

9. I also want to say that the effect of the changes in the international prices of crude oil on local fuel prices will not last forever. Modular refineries are beginning to come on stream in the country, and this will help lower the cost of petroleum products. Next month, the Waltersmith Modular Refinery in Ibigwe, Imo State, will be commissioned, starting with refining 5,000 barrels of crude per day and increasing rapidly to 50,000 barrels of crude. Many more modular refineries are also in different stages of completion across the
country, in addition to the 650,000 barrels per day Dangote Refinery. The deregulation will bring more investments into the sector, to the benefit of Nigerians,

10. Gentlemen, even with the increase in the price of fuel due to deregulation, PMS is still cheaper in Nigeria than in the neighbouring countries, and indeed in the entire West/Central African sub-regions. Here is a comparative analysis of petrol prices in the sub-regions (Naira equivalent per litre):
– Nigeria – 162 Naira per litre
– Ghana – 332 Naira per litre
– Benin – 359 Naira per litre
– Togo – 300 Naira per litre
– Niger – 346 Naira per litre
– Chad – 366 Naira per litre
– Cameroon – 449 Naira per litre
– Burkina Faso – 433 Naira per Litre
– Mali – 476 Naira per litre
– Liberia – 257 Naira per litre
– Sierra Leone – 281 Naira per litre
– Guinea – 363 Naira per litre
– Senegal – 549 Naira per litre

11. Outside the sub-region, petrol sells for 211 Naira per litre in Egypt and 168 Naira per litre in Saudi Arabia. You can now see that even with the removal of subsidy, fuel price in Nigeria remains among the cheapest in Africa. In the long run, deregulation will pay off and Nigerians will pay less.

ELECTRICITY TARIFF

12. Another issue we want to address here today is the recent service-based electricity tariff adjustment by the Distribution Companies, or DISCOS. The truth of the matter is that due to the problems with the largely-privatized electricity industry, the government has been supporting the industry. To keep the industry going, the government has so far spent almost 1.7 trillion Naira, especially by way of supplementing tariff shortfalls. The government does not have the resources to continue along this path. To borrow just to subsidize generation and distribution, which are both privatized, will be grossly irresponsible.

13. But in order to protect the large majority of Nigerians who cannot afford to pay cost-reflective tariffs from increases, the industry regulator, Nigerian Electricity Regulatory Commission (NERC), has approved that tariff adjustments had to be made but only on the basis of guaranteed improvement in service. Under this new arrangement, only customers with guaranteed minimum of 12 hours of electricity can have their tariffs adjusted. Those who get less than 12 hours supply will experience no increase. This is the largest group of customers.

14. Government has also noted the complaints about arbitrary estimated billing. Accordingly, a mass metering programme is being undertaken to provide meters for over 5 million Nigerians, largely driven by preferred procurement from local manufacturers, and creating thousands of jobs in the process. NERC will also strictly enforce the capping regulation to ensure that unmetered customers are not charged beyond the metered customers in their neighbourhood. In other words, there will be no more estimated billings.

15. The government is also taking steps to connect those Nigerians who
are not even connected to electricity at all. As you are aware, under its Economic Sustainability Plan, the government is providing solar power to 5 million Nigerian households in the next 12 months. This alone will produce 250,000 jobs and impact up to 25 million beneficiaries through the installation, thus ensuring that more Nigerians will have access to electricity via a reliable and sustainable solar system.

16. Again, like PMS, despite the recent service-based tariff review, the cost of electricity in Nigeria is still cheaper or compares favourably with that of many countries in Africa.

HERE ARE COST IN NAIRA PER KWH IN SOME AFRICAN COUNTRIES.
– Nigeria 49.75
– Senegal 71.17
– Guinea 41.36
– Sierra Leone 106.02
– Liberia 206.01
– Niger 59.28
– Mali 88.23
– Burkina Faso 85.09
– Togo 79.88

TIMING OF THE PRICE INCREASES

17. Gentlemen, the timing of these two necessary adjustments, in the petroleum and power sectors, has raised some concerns among Nigerians and reinforced the false narrative that the government is insensitive
to the plight of the citizens. This is a mere coincidence. First, the deregulation of PMS prices was announced on 18 March 2020, and the price modulation that took place at the beginning of this month was just part of the on-going monthly adjustments to global crude oil prices.

18. Also, the review of service-based electricity tariffs was scheduled to start at the beginning of July 2020 but was put on hold so that further studies and proper arrangements can be made. Like Mr. President said at the opening of the last Ministerial Retreat, this government is not insensitive to the current economic difficulties our people are going through and the very tough economic situation we face as a nation. We certainly will not inflict hardship on our people. But we are convinced that if we stay focused on our plans, brighter and more prosperous days will come soon.

19. We thank Nigerians for their understanding, and wish to appeal to them to please bear with the government. The deregulation of the petroleum sector will save the country trillions of Naira, which can then be used to provide modern infrastructures for the benefit of the people. It will also spur investments in the petroleum industry, especially in the building of local refineries which will result in lower fuel prices.

20. Also, the service-based electricity tariff adjustment and the ongoing work by German company Siemens to boost power supply in Nigeria will help end the perennial power problem in the country. Let me remind you that under the three-phase Siemens deal, Nigerians will enjoy 7,000 megawatts of reliable power supply by the end of 2021 (phase 1), 11,000 megawatts by the end of 2023 (phase 2) and 25,000 megawatts in the third phase.

21. Finally, we wish to appeal to organize labour to shelve its planned strike, which can only bring more hardship to ordinary Nigerians.

22 I thank you for your kind attention

Petrol Price Increase: Why Nigeria Cannot Afford Fuel Subsidy – Buhari

A file photo of President Muhammadu Buhari.

 

President Muhammadu Buhari has reacted to the increase in the price of Premium Motor Spirit (PMS), also known as petrol, by oil marketers in the country.

He explained why the country has found itself in such a situation, as well as why the Federal Government cannot afford to pay fuel subsidy at this time.

The President gave the explanation on Monday at the first-year Ministerial Performance Review Retreat which held at the Conference Centre of the Presidential Villa in Abuja.

“There are several negative consequences if the government should resume the business of fixing or subsidising PMS prices. First of all, it would mean a return to the costly subsidy regime,” said President Buhari who was represented at the event by the Vice President, Professor Yemi Osinbajo.

He added, “Today, we have 60 per cent less revenues; we just cannot afford the cost. The second danger is the potential return of fuel queues – which has, thankfully, become a thing of the past under this administration.

“Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices.

“Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now have no choice.”

The President’s explanation comes against the backdrop of the outrage triggered by the increase in the pump price of petrol – one which was widely condemned by various individuals and groups in the country.

While the Pipelines and Product Marketing Company (PPMC) reviewed the ex-depot price of petrol from N138.62 to N151.56 per litre in September, a majority of oil marketers were selling above N160 per litre.

A fuel station in Lagos sells petrol at N162 per litre.

The Long-Term Gains

For President Buhari, the COVID-19 pandemic, which has affected economies globally, has compelled the government to make some adjustments which he described as far-reaching.

Although he admitted that such reviews would cause some initial pain for the people, he insisted that they were necessary for the long-term gains.

“As you all know, when oil prices collapsed at the height of the global lockdown, we deregulated the price of Premium Motor Spirit (PMS) such that the benefit of lower prices was passed to consumers.

“This was welcome by all and sundry. The effect of regulation though is that PMS prices will change with changes in global oil prices. This means, quite regrettably, that as oil prices recover, we would see some increases in PMS prices,” he stated.

A file photo of an attendant filling the fuel tank of a car.

 

The President, however, gave an assurance that the government would remain alert to its responsibilities.

According to him, the role of the government now is to prevent marketers from raising prices arbitrarily or exploiting citizens.

President Buhari stressed that this was why the PPRA made the announcement last week to set the range of price that must not be exceeded by marketers.

“The advantage we now have is that anyone can bring in petroleum products and compete with marketers, that way the price of petrol will keep coming down,” he said.

Removing Fuel Subsidies Is The Right Way To Go, IMF Tells Nigeria

The Managing Director, IMF, Christine Lagarde at a press conference on Thursday, during the on-going joint annual spring meetings with the World Bank in Washington DC.

 

The International Monetary Funds (IMF) has asked the Nigerian Government to consider the complete removal of fuel subsidy.

IMF Managing Director, Christine Lagarde, who said this at a press conference on Thursday, noted that it was the right way to go.

Addressing a joint annual spring meeting of the World Bank in Washington DC, United State, she explained that the move would save a lot fiscally and in terms of human lives.

“We believe that removing fossil fuel subsidies is the right way to go,” Lagarde affirmed.

She added, “If that was to happen, then there would be more public spending available to build hospitals, to build roads, to build schools, and to support education and health for the people.”

READ ALSO: IMF, World Bank Urge Caution With China Loans

The IMF boss revealed that the figures spent on subsidy from 2015 were staggering.

She, however, urged the government to put in place a social protection safety net while the subsidy was being removed, to reduce its effect on the people.

“If you look at our numbers from 2015, it is no less than about $5.2 trillion that is spent on fuel subsidies and the consequences thereof,” she said.

Lagarde added, “And the Fiscal Affairs Department has actually identified; you know how much would have been saved fiscally but also in terms of human life if there had been the right price on carbon emission as of 2015. The numbers are quite staggering.

“Now, how this is done is more complicated because there has to be a social protection safety net that is in place so that the most exposed in the population do not take the brunt of the removal of subsidies principle. So that is the position we take.”

According to the IMF boss, with the low revenue mobilisation that exists in Nigeria in terms of tax-to-GDP, the nation is amongst the lowest.

She said there was a need for “a real effort” to maintain a good public finance situation for the country and in order to direct investment towards health, education, and infrastructure.

The IMF had in a recent ‘Staff Article IV consultation report on Nigeria’ made recommendations that the fuel subsidy should be removed.

PDP Accuses FG Of ‘Massive Corruption’ In Fuel Subsidy Regime [Full Text]

PDP Accuses FG Of ‘Massive Corruption’ In Fuel Subsidy Regime [Full Text]
A file photo of Nigerians queuing to buy fuel

The Peoples Democratic Party (PDP) has accused the Federal Government of ‘massive corruption’ amid the controversy over the alleged payment of fuel subsidy.

The party made the allegation in a communique issued shortly after the meeting of members of its National Working Committee (NWC) on Sunday in Asaba, the Delta State capital.

As fuel scarcity persists, the PDP questioned why billions of naira are allegedly deducted monthly from the Federation Accounts.

They also condemned the killings across the country and asked President Muhammadu Buhari to ensure that the lives and property of Nigerians are well protected.

The communique was jointly signed by the National Chairman Uche Secondus and Chairman of PDP Governors’ Forum Ayo Fayose.

Read the full statement below:

We strongly condemn the unabated killings across the country. We call on Mr President to come out clean on the herdsmen killings and address the nation on how to end the carnage. The President must take responsibility for the protection of lives and property of Nigerians which is the most important of his responsibilities.

We believe that the Federal Government’s decision to set up a Committee to address the issues of herdsmen killings is a pretentious approach to a matter that requires firm action and leadership by the President in line with his oath of office to protect all Nigerians irrespective of creed, tribe and political affiliation.

The People’s Democratic Party (PDP) has been the author of restructuring and this was further expressed in the Report of the 2014 National Conference. The All Progressive Congress (APC) as a later day convert of restructuring is merely paying lip service to a matter of national importance.

However, we have mandated our members in the National Assembly to immediately commence the process of initiating a Bill to address issues bothering on restructuring.

We urge Mr President to henceforth direct the Economic and Financial Crimes Commission (EFCC) to adhere to the Rule of Law by obeying Court judgements and orders such as the one involving the Ekiti State Government against EFCC and restrain itself from further political intimidation and harassment of known or perceived political opponents.

We commend the judiciary for their commitment to the enthronement of constitutional democracy in the face of intimidation and harassment. We condemn in strong terms the massive corruption going on in the management of fuel subsidy regime which the Federal Government had declared nonexistent while billions of naira are deducted monthly at Federation Accounts Allocation Committee (FAAC) meetings.

The PDP states and local governments are vehemently opposed to the unilateral withdrawal of USD1Billion from the Excess Crude Account by the Federal Government under any guise.

We want to state unequivocally that neither the Governors’ Forum nor the Federal Executive Council has the power of appropriation of Federation Accounts, as such powers reside with the National and State Assemblies.

We commend members of our party for their unalloyed support. We reiterate that our repositioned party is prepared for the 2019 elections and will ensure that all Nigerians aspiring to elective offices are free to contest on the platform of the PDP.

We want to assure that no established organ of the party is allowed to align with any presidential aspirant. We thank the people and government of Delta State for playing host to this all-important meeting.

Subsidy: We’ve Received N4.9trn So Far, NNPC Tells Senate

Subsidy: We’ve Received N4.9trn, NNPC Tells Senate
L-R: Maikanti Baru and Isiaka Abdulrazak

 

The Nigerian National Petroleum Corporation (NNPC) says it has received more than N4.9trillion as payments for subsidy on Premium Motor Spirit, popularly known as petrol between 2006 and 2015.

NNPC Chief Finance Officer, Mr Isiaka Abdulrazak, disclosed this on Monday during a public hearing conducted by the Senate Committee on Petroleum (Downstream) in Abuja.

READ ALSO: Fuel Scarcity: NNPC Says Porous Borders Affecting Distribution

Top officials of the corporation who appeared at the investigative hearing were led by the NNPC Group Managing Director, Dr Maikanti Baru.

The NNPC officials were summoned by the lawmakers amid the persisting fuel scarcity in the country and the controversy over the payment of fuel subsidy.

Briefing the senators on the issue, Abdulrazak said subsidy payments were duly approved by the Petroleum Products Pricing Regulatory Agency (PPPRA).

He said: “All NNPC’s subsidy claims and entitlements are duly verified and approved by PPPRA with relevant certificates issued,” he was quoted as saying by the corporation.

“The subsidy approved for NNPC is backed out of Domestic Crude Cost payable to Federation Account Allocation Committee (FAAC).”

On the essence of the payment, the NNPC official explained that subsidy is a duly authorised reimbursable amount from Petroleum Support Fund (PSF) to compensate for products supplied at the government regulated price.

He, however, informed the panel that while a total of N5.1tr was duly approved by PPPRA as subsidy claims for the corporation, NNPC is still being owed N170.6bn.

Abdulrazak further sought the understanding of members of the committee on the peculiarity of NNPC operations, and its role as “a supplier of last resort in the downstream sector of the economy.”

Despite the purported payment of fuel subsidy, Nigerians have continued to experience difficulty in getting the product with long queues at filling stations.

On Wednesday last week, Baru had decried the sustained nefarious activities of cross-border fuel smuggling syndicates and hoarders in the country.

The NNPC boss, who addressed a Joint National Assembly Committee on Petroleum (Downstream), noted that fuel supply and distribution matrix across the country have been hindered by such activities.

Concerned with the lingering fuel crisis, the Senate issued a directive to the NNPC to end fuel queues in seven days from January 25.

Reps Summon Kachikwu, Baru Over Alleged Fuel Subsidy Payment

Reps Summon Kachikwu, Baru Over Alleged Fuel Subsidy Payment
File photo

 

The House of Representatives has summoned the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru.

The summon followed a motion sponsored on Wednesday by a lawmaker from Kogi State, Honourable Sunday Karimi, who drew attention to the need to investigate the allegation of fuel subsidy payment by the corporation.

Mr Karimi was concerned that “the Federal Government claimed that it has stopped fuel subsidy payment and it is the NNPC that is paying subsidy through its routine trading activities.”

He was also worried about claims that such payment does not “require budgetary approval”, while motion gained the support of a majority of the lawmakers.

Kachikwu and Baru were consequently directed to appear before a Joint Committee of the House to explain the current subsidy payment.

Both men were also asked to account for the funds spent on subsidy payment since January 2017 to date.

The House, however, asked President Muhammadu Buhari to formally request for approval of budgetary provision for fuel subsidy in the 2018 Appropriation Bill, if there is a need for such.

Subsidy Fraud: Two Convicted For Stealing 754m Naira From Govt.

artificial fuel scarcity, imo state, imo state governmentA Lagos State High Court in Ikeja on Friday convicted two oil marketers, Walter Wagbatsoma, Adaoha Ugo – Ndagi and their company, Ontario Oil and Gas Limited for defrauding the Federal Government of the sum of 754 million Naira.

The convicts, were arraigned before the court for allegedly obtaining the sum from the government through the Petroleum Product Subsidy Support Fund.

They were arraigned by the Economic and Financial Crimes Commission on an eight count charge of conspiracy, obtaining property by false pretence, forgery and altering of documents.

While delivering judgment in the five year old case, Justice Lateefat Okunnu held that the prosecution had proved its case against the convicts beyond all reasonable doubt.

Collapsed In The Dock

The judge stressed that the convicts knew that the documents they presented to the government to claim subsidy was forged but they presented it anyway to derive “undeserved benefits”.

The first convict, Walter Watgbasoma, who is the Chairman of Ontario Oil and Gas Limited, was convicted in absentia, as he had fled the country despite the fact that the court was with his passport and other travel documents.

He is currently under house arrest in the UK where he is also accused of fraud.

The second convict, Mrs Ugo-Nnadi, who was present in court, collapsed in the dock before the judge could pronounce the sentence.

The ensuing confusion forced the court to adjourn the proceedings to Monday, January 16 when the sentence will be delivered.

Family members later claimed that Mrs Ugo-Nnadi, who is the Managing director of Ontario Oil and Gas Limited, was subsequently rushed to a hospital in the company of some prison officials.

The Court has, however, acquitted and discharged the third defendant, one Babafemi Fakuade, an official of the Petroleum Products Pricing Regulatory Agency (PPPRA) for lack of evidence linking him to the crime.

The offense committed by the two convicts attracts a minimum sentence of seven years imprisonment while the maximum sentence is 20 years.

Oil And Gas Suppliers Support Fuel Subsidy Removal

DPR - IlorinThe Natural Oil and Gas Suppliers Association of Nigeria has directed its members to sustain the full supply of oil and gas throughout the country especially within the industrial sector, to aid manufacturers and the construction companies.

The directive by the association is against the backdrop of the call for industrial action by the Nigeria Labour Congress which is protesting the recent hike in the price of petrol by the Federal Government from 86.50 Naira to 145 Naira per litre.

In a statement, the Secretary of the Association’s Board of Trustees, Mr Eddy Nwosu, urged members of the association to shun any attempt to disrupt their production.

Mr Nwosu explained that the decision to remove subsidy was in the best interest of Nigerians.

He further called for Nigerians understanding as regards the hike in the price of petrol, stressing that the hard impact of the decision on the people was only going to be momentary.

He therefore urged them to support the decision and other policy directives of the government as its long term effect would be in the interest of Nigerians.

Mr Nwosu also said the removal should be full to promote effective competition in the oil and gas sector.

New Petrol Pump Price Enjoys High Compliance Nationwide

petrolThere seems be high compliance level for the new pump price of petrol across the country.

This is according to Channels TV correspondents, who visited petrol stations across the country.

While petrol is selling at between 86 naira and 86.50 in Abuja, the product is selling for N87 per litre in Kano.

Many petrol stations in the Federal Capital Territory have been nearly empty with just two to three cars at the fuel pumps at a time.

At the NNPC filling station visited, the pump price was 86 naira per litre and the station manager who spoke off camera said that the new pump price was put in place as soon as government announced the reduction.

Other filling stations visited; Conoil, Oando, Forte Oil, were selling at N86.50k per litre.

Vehicle owners buying at the new rate said that they were happy that the product was available whether or not there is a reduction in pump price.

They also said that the 50 kobo reduction would be taken as a sign of better things to come.

However, one customer asked that federal government pay attention also to the pump price and availability of kerosene which he said is used by a greater number of Nigerians, especially the poor.

For the oil majors in Lagos, they have reverted to the approved rate of N86.50k, while the same may not be said of independent marketers who are still selling above the recommended retail price.

The situation seems to be bad in Ogun State where the product is still selling for between N110 and N120 per litre except for the capital city, Abeokuta where the NNPC mega station is selling at the new pump price.