• FG, Dangote refinery brainstorm on local petrol pricing
'Seun Ibukun-Oni, Abuja
Tayo Busayo, Abuja
DAILY COURIER - Former Vice President Atiku Abubakar, on Monday, challenged President Bola Tinubu to be brave and admit the return of fuel subsidy months after the President declared that subsidy was gone.
Atiku, who lost to Tinubu in the 2023 presidential election, insisted that fuel subsidy had returned and alleging that it “has become an even wider conduit pipe through which money for funding the 2027 election will come from.”
The ex-Vice President stated this in a statement released on Sunday by his media aide, Phrank Shaibu.
“Tinubu visited the FMDQ in New York, Qatar and France, where he told lies about removing petrol subsidies. This is not a man who is serious about attracting FDI.
“More worrisome is that he is not even brave enough to admit that subsidy is being paid. The NNPCL admits that N7.8tn is owed to the national oil company by the Nigerian government.
“IMF estimates that subsidy payments this year will constitute three per cent of GDP, which is about $7.5bn. This will be about N11.8tn. Yet, the petrol scarcity continues to linger while the Tinubu administration continues to frustrate the Dangote Refinery and even its own NNPCL facilities.
“Obviously, the subsidy regime has become an even wider conduit pipe through which monies for funding the 2027 election will come from,” Atiku said.
The Adamawa politician also challenged the Federal Government to clarify how Oando Plc, owned by President Tinubu’s nephew, Wale Tinubu, received accelerated approval to acquire the onshore assets of AGIP and ENI.
On Thursday, Oando PLC announced the successful completion of its acquisition of 100 per cent of the shares in Nigerian Agip Oil Company Limited.
In a statement released on Thursday, the company stated, “Today marks a significant milestone for Oando Plc as we proudly announce the finalisation of our agreement with Eni to acquire the entire shareholding of Nigerian Agip Oil Company Limited (NAOC Ltd).”
In a response issued on Sunday, Atiku alleged that Oando received unfair and preferential treatment in the oil and gas sector, which he claimed harmed more capable investors.
“Former Vice President of Nigeria, Atiku Abubakar, has asked the Federal Government to explain why Oando Plc, owned by the President’s nephew, got an accelerated approval to buy the onshore assets of AGIP and ENI, while other transactions such as the Shell/Renaissance deal and the Mobil/Seplat continue to suffer delays,” he said.
Atiku also condemned the House of Representatives for failing to act properly on the NNPCL, which has allegedly moved to “mortgage the country’s national oil assets to vested interests.”
Atiku said, “Within just eight months, the Nigerian Upstream Production Regulatory Commission approved a deal which saw the divestment of ENI/AGIP onshore assets to Oando.
“Within that same period, Nigeria controversially withdrew all litigation against Shell/ENI in the OPL 245 scandal in what has been described as a quid pro quo.
“However, the attempt by Seplat to buy Mobil’s onshore assets has continued to stall for the last three years, even as the consent letter remains on Tinubu’s table. The deal between Renaissance and Shell continues to stall.
“In fact, the only deal that has fully scaled through so far is the one involving Oando. We now know why it got accelerated approval.
“Ideally, democracy ought to be the government of the people, for the people, and by the people. But democracy in Nigeria has become the government of Tinubu, by Tinubu, and for Tinubu and his family members.”
He noted that in July 2023, the House of Representatives, following a motion by Miriam Onuoha, instructed the NNPC Ltd to halt the acquisition of OVH assets until its committee completed an investigation.
According to the former Vice President, the committee requested detailed information from NNPC Ltd, including registration documents, board resolutions, audited financial statements, management accounts, and evidence of tax payments.
He alleged that despite these requests, the oil company ignored them and proceeded with transferring ownership and properties in its retail arm to OVH, thus compromising the future of Nigerians.
“Despite the rot in the oil sector, the head of the NNPC, the head of the NUPRC, and the head of the NMDPRA continue to keep their jobs. This is clear evidence that they are fulfilling the mandate given to them by Tinubu.
“Furthermore, Atiku pointed out that the NNPC lied in its vacuous response to their statement last week, as it is on record that the Kyari-led management appointed Huub Stoksman, a former Chief Executive Officer of OVH Energy, as Managing Director of NNPC Retail, and Mumuni Dangazau, the former Chief Operating Officer of OVH Energy, as his Special Adviser Downstream, long before the consummation of the incestuous marriage of the entities.”
Also, Atiku criticised the Tinubu administration for allegedly increasing human rights abuses.
He said the President betrayed his claims of being a freedom fighter by allowing the Department of State Service, police and the military to violate citizens’ rights without accountability.
The former Vice President also argued that the Cyber Crime Prevention Act 2015 had been misused by Tinubu’s officials to detain citizens, with the Nigeria Police Force National Cybercrime Centre effectively becoming a replacement for the disbanded Special Anti-Robbery Squad.
Atiku added, “The dangerous trend of enforced disappearances has become a national embarrassment for a country which claims to be practising democracy.
“On May 1, 2024, Daniel Ojukwu of the Foundation for Investigative Journalism went missing and was presumed abducted by kidnappers until he was later discovered to be in police custody on the orders of IGP Kayode Egbetokun. Ojukwu’s crime was that he exposed the corruption of a government official who currently serves in Tinubu’s administration.
“On July 23, the DSS arrested one Aliyu Sanusi in Sama Road of Sokoto, the state capital, for printing and distributing materials ahead of the #EndBadGovernanceProtest.
“Even the arrest and release of the former BBC Pidgin Editor and current West Africa Regional Editor of the Conversation, Adejuwon Soyinka, clearly show a pattern, whose objective is to intimidate journalists for speaking truth to this government.
“Now, the police have arrested Bristol Tamunobiefiri, who owns the PIDOM Nigeria blog on X, formerly Twitter. After detaining him for over two weeks, he was granted an administrative bail, which would be impossible to meet.
“This is despite the fact that the Appeal Court, in the case of EFCC V. Emem Uboh (2022) LPEIR – 57968 (CA) held that administrative bail is illegal. Bristol should, therefore, be arraigned in court immediately or released.”
Meanwhile a Punch report disclosed that there are indications that the Federal Government’s committee which was set up to ensure the implementation of crude oil sales to local refineries in naira will further discuss the pricing of Premium Motor Spirit, popularly called petrol, to be released by the Dangote Petroleum Refinery next month.
Multiple officials, both among oil marketers and members of the Implementation Committee on crude oil sales in naira, under the leadership of the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed that the panel would be holding a series of meetings this week and in coming weeks on the development.
They also stated that the committee would be concluding a framework that would put a benchmark on the amount which the Dangote refinery would pay for crude in naira, adding that the Federal Government would have to decide whether to pay subsidies for petrol from the plant or to allow Nigerians buy the product at the market price.
However, oil marketers declared that the cost of Dangote petrol would be higher than the current pump prices of the commodity, stressing that it would be tough for dealers to buy the commodity from the plant if the Federal Government fails to intervene in the price.
Petrol sells at between N600 and N700/litre depending on the area of purchase across the country. The landing cost of the commodity, according to data released by the Major Energies Marketers Association of Nigeria recently showed that the cost of PMS was N1,117/litre.
Marketers say this is the actual market price of the commodity and explain that the cost of the product from the Dangote refinery should be around this figure.
The Nigerian National Petroleum Company Limited is the sole importer of petrol into the country. Other marketers stopped importing the commodity due to their inability to access the United States dollar required for petrol imports.
But last week at the presentation of the audited report and accounts of NNPC for the 2023 business year in Abuja, the firm’s Chief Financial Officer, Umar Ajiya, admitted that the oil firm was shouldering a heavy subsidy burden on petrol imports.
He said NNPC had been making PMS available for retail distribution at about half of the landing cost under an agreement with the government.
He explained that the company had been offsetting the shortfall in landing price and sale price through a reconciliation arrangement between the government and the company. He said the company had 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/litre, the average landing cost is about N1,200/litre. Ajiya said the company covered about N7.8tn in “shortfall” in the first seven months of this year.
“I think there is one fact that I need to make very clear, in the last eight or nine years, this company, even as a corporation as it were, has not paid anybody a dime or one naira as subsidy.
“No one has been paid a kobo by the NNPC in the name of subsidy. No marketer has received money from us by way of subsidy,” Ajiya said.
He said the government directs NNPCL to sell the petrol it imports, at a price that is half of the landing price. According to him, at times the Federal Government pays the money and it could as well net off for it.
“What has been happening is that we have been importing PMS, landing at a certain price, and the government is telling us to sell it at half price. So, that gap between that landed price and the half price is what we call shortfall or we call it a subsidy,” the CFO explained.
On August 20, 2024, The PUNCH reported that the Federal Government’s committee which was set up to ensure the implementation of crude oil sales to local refineries in naira has reached an agreement with the Dangote Petroleum Refinery for the rollout of petrol in September this year.
The Federal Government also disclosed that the sale of crude oil to Dangote Refinery and other local refineries will commence on October 1, 2024.
On Sunday, impeccable sources among oil marketers, the Federal Ministry of Petroleum Resources, and the Presidency confirmed to our correspondent that the cost of petrol from the $20bn plant would be discussed by the government and the management of the plant in the coming weeks.
They said the options before the government are to either pay subsidies on petrol without piling the burden on NNPC or to allow Nigerians to buy the product at the market price to be released by the Dangote refinery, which, of course, will be high.
“The only way the government can intervene is to subsidise. There is nothing NNPC can do. I mean this. Do you want to kill the NNPC? Do you want the company to continue carrying the subsidy burden after the explanation it gave last week? It is not sustainable.
“Except you are saying NNPC will start doing whatever it can and nobody will expect profit from the company,” a source at the FMPR, who spoke in confidence due to lack of authorisation to speak on whether the NNPC would intervene in PMS price from Dangote, stated.
Asked to state a possible solution to the matter, the official replied, “The solution is for Nigerians to pay the real cost of petrol. But then you know, other things will come into play, because, you know, our economy is not that good. Things are not good for everyone.
“However, it is for Nigerians to pay the real cost of petrol or for the government to bring back subsidies. I don’t know, but it’s just those two things. They may consider this at the meeting, but for now the major discussions centre on crude supply in naira, which should be finalised in a few weeks.”
The source said the sale of crude to Dangote in naira had been settled, stressing that “his (Dangote) own portion will be sent to him. But they are still working on the framework, I know, we’ve been having meetings. So we’re having meetings. So hopefully, I think by next week we should be able to get a clearer picture on the modalities. We meet almost every two or three times a week.”
The source noted that one major challenge is the lack of the United States dollar, but stressed that the committee “will benchmark the exchange rate for crude sale to Dangote.”
The official added, “All the framework will be sorted and you know AfreximBank is with us in this.”
Also commenting on the development when contacted and asked if marketers had reached a price for Dangote petrol ahead of its release next month, a senior official of the Major Energies Marketers Association of Nigeria explained that though members of the association were willing to load from the plant, it would be tough due to the price.
“There are two things: the first one is logistics and cost-taking. We’ve been taking AGO (diesel), ATK (aviation fuel) by vessel and truck. By now, we all know ourselves and we understand how it works. So that one is not a problem. When PMS starts, it will not be changed from what we were doing before. The methodology of picking it from them (Dangote) has already been worked out and it is already in place and play.
“Now, when it comes to price, that’s the second thing and the third one is, in what currency are we paying? That one is going to be between Dangote and the government because as the government has just confessed to you, there is a subsidy. So, Dangote cannot clear the subsidy by himself. In order to deal with it, I think the government is trying to intervene, though still in denial.
“However, I do not think the subsidy is a good policy. I do not think anything has changed concerning the subsidy. Subsidy shortchanges the country. The government still must recognise that things are very tough on Nigerians right now and must find a way. If it wants to remove the subsidy, what can it do to mitigate the challenges?”
The official, who also spoke in confidence, said the government had introduced the Compressed Natural Gas initiative to tackle the cost of subsidy on PMS.
“So, what he’s (President Bola Tinubu) trying to do is he’s trying to push CNG which is possible so that he can stop paying subsidies for PMS. The CNG uptake is going a lot slowly; but that is the solution, to move quickly with the alternative CNG, especially for commercial transportation and long-distance movement of foodstuffs from the bread baskets to the urban centres so that you can manage your inflation.
“But, can the government continue with a subsidy of N7.7tn? I don’t think so, and anybody who says that is not being fair to Nigerians. The government is just a temporary group of people in power; they will soon go when their time finishes but our country will still be here.
“It is government policy. Currently, the government policy is that there is no subsidy; there is no subsidy provided for in the budget. How much will Dangote sell for? Dangote is not prepared – I don’t think – to sell at below the cost of production. So, we will need to wait to see what the government will do,” the source stated.
Asked whether there would be an intervention from the government, the official replied, “There may be an intervention, yes. Refined crude will still be at the international market price, as it should be.”
On whether marketers are ready to buy petrol at the international market price form Dangote, the MEMAN official said, “No, marketers will not buy at higher than our pump prices and sell at our prices. But we don’t know how marketers will buy it.”
When probed further to tell if there is a pricing template for petrol now from Dangote, the official said, “No law allows you to have a pricing template; we have PIA (Petroleum Industry Act). The prices of diesel and aviation fuel are the market price. There is no official market price for PMS as we speak, no.”
On his part, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria, Mustapha Zarma, said unless there is an intervention by the government in the price of Dangote petrol, marketers will not be able to buy it if the policy on capping is not lifted.
“Nobody can start discussing petrol pricing modalities with Dangote now because you cannot buy their product. At the prevailing retail price in Nigeria now, you cannot buy their PMS. So they can only go into agreement with the government on pricing. Otherwise, the policy on capping of petrol prices will have to change.
“There is a cap on the price of petrol in Nigeria now, and I don’t think that as a businessman who is into business to make a profit, Dangote will want to sell his product below the market price. We all know NNPC has been shouldering subsidies on petrol.”
A post on the official X (formerly Twitter) page of the finance ministry about two weeks ago, stated that the meeting of the committee on crude sale in naira was to review progress on key initiatives.
At the meeting, key roles were outlined for stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Central Bank of Nigeria, Nigerian Upstream Petroleum Regulatory Commission, and the African Export-Import Bank to ensure smooth implementation.
The post read, “The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, today led the Implementation Committee meeting on the transition to crude oil sales in naira.
“The meeting reviewed progress on key initiatives, including the upcoming commencement of naira payments for crude oil sales to the Dangote Refinery starting October 1, 2024.”
Also, the Executive Chairman of the Federal Inland Revenue Service, Dr Zacch Adedeji, and the Chairman of the Technical Sub-Committee reported that “The first PMS delivery from Dangote is expected next month under existing agreements.”
On August 15, The PUNCH reported that the finance minister inaugurated a technical sub-committee tasked with developing the framework for the sale of crude oil to local refineries in naira.
This initiative aligns with the recent presidential directive aimed at enhancing Nigeria’s refining capacity and promoting economic growth.
Crude oil supply to domestic refineries has been an issue for months, particularly since the multi-billion dollar Dangote Petroleum Refinery came on board.
Domestic crude oil refiners, including the $21bn Dangote refinery, have repeatedly complained about the poor supply of crude to their plants.
IYC, HOST COM, Call For Lokpobiri's Redeployment
The Ijaw Youth Council (IYC), Worldwide has clarified that its call for the redeployment of the Minister of Petroleum, Oil, Dr Heineken Lokpobiri, is not borne out of parochial sentiment, but out of a genuine desire to address issues bedeviling the petroleum sector.
The IYC in a statement signed by Maobuye Nangi Obu, the IYC Secretary-General; Comrade Miracle Iyaye, National Women Leader; Tamunotonye David Altraide, National Legal Adviser and Comrade Abiye Bob-Manuel, National Deputy Director of Mobilisation, said since he emerged as the portfolio’s minister, there had been unresolved issues from his office threatening the country’s economy.
The council insisted that Lokpobiri’s continuous stay in the office, where he lacked the expertise, was making life difficult for the Niger Delta people and the country.
The council frowned at the negative insinuations its earlier statement generated and insisted that there was no time it called for the removal of Lokpobiri as a minister.
The IYC executive members observed with dismay that instead of addressing their concerns, some persons were already reaching out to the minister, to milk him financially with a promise that they would tame us.
The IYC officials said contrary to the position of the IYC Spokesman that the council passed a vote of confidence in Lokpobiri, there was no time a meeting was called for such purpose insisting that a no-confidence vote on the minister was passed by the council.
They clarified that only the Secretary-General of IYC reserved the right to convene the meeting of the council to deliberate on issues such as confidence votes.
They further added that instead of addressing issues they raised in their statement, the Minister had resorted to using his younger brother, Jonathan Lokpobiri, who is the President of IYC to attack and try to intimidate them.
The officials said: “We are not attacking the personality of the Minister and we are not saying that he is not an illustrious son of the Ijaw nation.
“All we are saying is that the Minister is occupying an office he knows nothing about and that he lacks the knowledge to confront the issues bedevilling the oil subsector of the petroleum industry. His lack of capacity and technical know-how is eroding the gains of President Tinubu’s Renewed Hope Agenda.
“Our observations have been confirmed by the President of Host Communities of Nigeria Producing Oil and Gas (HOST COM), High Chief Benjamin Tamaranebi, when he led members of his organisation to visit the Leader of Pan Niger Delta Forum (PANDEF), Chief Edwin Clark, at the weekend.
“Instead of embarking on a witch-hunt against us, we advise the Minister to sit up and address issues causing hardship for Nigerians and giving President Tinubu’s administration a bad name.”
The council said it only wanted the minister to be posted to a ministry where he could utilise his experience and recalled that Lokpobiri performed better when he was the Minister of State for Agriculture.
The executive officials, however, said Lokpobiri could begin to exert himself as the minister of Petroleum, and oil, by explaining the current crisis in the petroleum sector and circumstances surrounding the Warri and Port Harcourt refineries.
The council insisted that in developed countries, ministers, who discovered that there were forces stopping them from discharging their duties either sought redeployments or resigned their offices.
The officials said being a Minister in a critical subsector like oil, which is the nucleus of the Nigerian economy, without having the powers to call the shots, would continue to give the occupant of such office a bad name.
The IYC officials said: “Our statement was not borne out of any parochial sentiment. We have the highest regard for the Minister having served in different capacities. But what we are saying is that his continuous stay in the Ministry is making things more difficult for people of the Niger Delta and Nigerians.
“What we expected was for the issues we raised to be addressed. But sadly, political jobbers, disgruntled elements and some expired politicians have jumped in to catch on the issue and milk the Minister dry. They want to milk him with the assurance of taming us. He should be weary of them.
“We also want to restate that we didn’t call for his sack as some people have been saying. We only ask for his redeployment which is not out of place. He did far better as Minister of State for Agriculture so if this current position is overwhelming then he should be moved to another ministry.
“We have said that we will not support a non-Bayelsan or ijaw to occupy that office. So, even if he is redeployed we are advocating for his replacement to come from the Ijaw ethnic nationality.
“Those attributing our position to be a declaration of war between the Eastern and Central zones are missing the point. We will not condescend to their absurd level of reasoning and thinking.
“We want to be personal, there are too many things before us that we will unleash but we don’t want to go there. We call on the Honorable Minister to explain to Nigerians what is going on with the Port Harcourt and Warri Refinery and also tell those around him not to aggravate issues.”
