The Minister of State for Petroleum, Dr Ibe Kachikwu, said on Saturday that the Federal Government needed 700 million dollars to upgrade its refineries to produce at maximum capacities.
Kachikwu, who is also the Group Managing Director of NNPC, disclosed this while speaking with newsmen during the re-inauguration of the Port Harcourt/Bonny Crude Supply Line at the Port Harcourt Refining Company (PHRC), Eleme, Rivers.
He said that due to the fact that the nation did not have such amount, advertisements had been signed for investors to come in.
According to him, we are not inviting foreign partners to take over the refineries; the total investment for that is up to $700 million and we don’t have that. Let us be honest about it.
”So, the best thing to do is to find a very creative way to bring in investors, who will come in, work with our team here;
‘’Investors, who have the skills to reactivate and upgrade facilities in this place and help us provide technical support and we will pay through the flow-out of the refined products over time,” he said.
Kachikwu emphasised that there should be no confusion about what the investors would be coming to do, since they would not come to run the refinery.
”They are coming to provide funds to take our performance on these refineries to 90 percent and to provide us with technical skills.
”So, the areas of intervention will be funding and technical support,” he said.
Managing Director of the NNPC, Mr. Emmanuel Kachikwu
Kachikwu said that at present, Nigerians were consuming about 45 million litres of PMS daily, while the refineries were producing 12 million litres daily as they were working at 60 per cent capacity.
He said that the nation will need to upgrade these refineries and let them develop to the point where they can perform up to 90 per cent.
He said that by the time the refineries were upgraded and they start producing at 90 per cent, about 20 million litres would be produced daily.
The minister said that with such production, it would only meet up with about half of the country’s consumption.
Kachikwu, however, apologised to Nigerians for their suffering due to the fuel scarcity and also thanked Nigerians for their patience.
He explained that the government had been able to recover the two critical crude supply pipelines; which were Escravos/Warri and Bonny/Port Harcourt crude supply pipelines.
Kachikwu said that the pipelines were down for six to seven years but had been repaired and were working and supplying crude to the refineries.
”For the first time, the refineries will get their crude, pay for it, they will sell their products and they will earn the income from that product.
”And then, they can develop and continue to maintain the refineries even after this intervention is over.
”Port Harcourt is back in production, Warri is back in production; Kaduna today is receiving and will soon be back in production. It is something of joy,” he said.
Kachikwu said, ”Lagos is easing off now from fuel scarcity and Abuja is doing the same thing; once Kaduna begins to produce, the North will see a lot of improvement.
”Over and above that, we are putting long term policies in place to ensure that while smaller marketers go out and do their stuff, we can then be the key suppliers for the rest of the country.”
He commended the workers and the contractors for a job well done; adding that he has signed the promotion letters of the PHRC staff as they deserved to be rewarded.
Kachikwu, however, said there is a lot still to be done, ”I told you I will never give up.
‘We owe Nigerians the duty to ensure that the refineries are working. We owe Nigerians that, we can’t give up,” he said.
The minister urged Nigerians to remain resilience, “support what the government is doing because this is the only way to change the system.”
The scarcity of petrol got worse in many parts of the country on Monday despite assurances by the Nigerian National Petroleum Corporation that the situation would improve.
Fuel Scarcity
Lagos, which traditionally receives more product than other parts of the country, was virtually grounded on Monday as only few vehicles moved about, with many passengers stranded at bus stops, while queues of desperate motorists stretched for kilometres at the few filling stations that had the product to sell, and partially blocked major roads.
The same situation was recorded in the Federal Capital Territory, Osogbo, Abeokuta, Ibadan, Minna, Maiduguri, Bauchi, Ado Ekiti and Benin City, among others.
At most filling stations belonging to independent marketers, a litre of the product sold for between N120 and N200 instead of the N86 and N86.50 official pump prices, while black market hawkers sold it for as high as N400 per litre.
Many commuters were seen in Lagos struggling to get commercial vehicles to different destinations, even as some transport operators increased the fares by 100 per cent or more.
On the Otedola Estate and Berger end of the Lagos-Ibadan Expressway, the Mobil, Capital Oil and Oando filling stations had longer queues of desperate motorists and other customers, which spilled onto the road and caused a serious gridlock.
The long queues at the filling stations forced many motorists to resort to the black marketers, who were having a field day as they sold the product at exorbitant prices.
Our correspondent gathered that most of the independent marketers’ depots in Apapa did not have petrol on Monday, while few had kerosene and Automotive Gas Oil (diesel).
Out of the 36 depots surveyed, only Capital Oil, Folawiyo and Heyden were said to have petrol, while MRS was still expecting its vessel.
Aiteo, Acorn, Nipco Plc, Fatgbems, Aiteo, Sahara, Techno, Zenon, Stallionire, Gulf Treasure, Global Fleet, Honeywell, Obat, Eurafic, Rahamaniyya, Index and other depots did not have petrol to load.
A commuter, Jumoke Awe, said she bought a litre of petrol for N300 on the black market on her way to Palmgrove from Ajah, but had to park her car somewhere along the Lekki-Ajah Expressway so as to take a commercial bus due to the attendant gridlock.
When asked if there was any new development in terms of supply, the National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr. Mike Osatuyi, said the supply had not really improved.
“We are expecting the ships to come; when the ships come and they discharge, we will start loading. We are expecting that any moment from now, the ships will be arriving, based on what the NNPC said. But it will take some days before the vessels will clear,” he said.
Another source, who is an official of an independent marketer, said “There is no new development today (Monday). Some of the vessels that the government promised to bring in have yet to come. They promised to bring two vessels last week, but only one came on Thursday, and it started discharging on Saturday, and is still discharging now.
“One of the vessel’s areas has been cleared now. So, we are expecting that they will bring one overnight if they are going to keep to their promise. There is a gentleman’s agreement now that until this problem abates, no other product vessel should come into the Apapa jetty.”
The National President, Nigeria Union of Petroleum and Natural Gas Workers, Igwe Achese, said members of the union were ready to work with the NNPC to ensure effective distribution of fuel to filling stations.
He, however, said the NNPC needed to meet the conditions the union earlier discussed with its management.
While speaking at the Central Working Committee meeting of the Joe Ajaero’s faction of the Nigeria Labour Congress in Lagos on Monday, Achese highlighted challenges that the Ministry of Petroleum Resources needed to address to include the passage of the Petroleum Industry Bill, building of new refineries and prevention of gas pipeline vandalism.
“While removing subsidy, our refineries must work because we cannot continue to import. With the prices of crude oil in the international market, it is difficult for any nation to sustain the payment of subsidy to any importer of petroleum products,” Achese said.
In Oyo State, a litre of fuel was selling for between N180 and N200, while black market rate was between N250 and N300.
There were few vehicles plying the roads in the state capital on Monday, while the small number of transport operators on the road charged exorbitant fares.
Many prominent markets like those at Dugbe, Aleshinloye and Gbagi were nearly deserted because traders decided to stay indoors and buyers seemed to have postponed shopping till the situation normalises.
Residents of Bauchi metropolis lamented the unending hardship they are facing as the scarcity of petrol become worse.
One of our correspondents, who went round some filling stations in the state capital, observed that the product was not available.
Most of the filling stations visited were under lock and key, while black marketeers continued making brisk business by selling the product for between N250 and N300 per litre.
In Minna, Niger State, the situation has forced the Department of Petroleum Resources to relax its crackdown on independent marketers who are now selling the product for between N220 and N260 per litre.
The State Controller, DPR, Mr. Abdullahi Jankara, said the agency had decided to allow independent marketers to sell the product at their own prices because of its non-availability in order to reduce the hardship being faced by the people.
The fuel crisis in Borno and Yobe states got worse on Monday as petrol sold for between N250 and N300 on the black market.
There was virtually no place to buy at the right price other than the NNPC mega stations where it could take two or three days to get.
One of our correspondents reported that the fuel situation in Osogbo, the Osun State capital, and other towns in the state had not improved.
It was observed that many filling stations were shut on Monday because of non-availability of the product, while the few ones that had sold a litre of petrol for between N180 and N200.
The NNPC mega station in Osogbo sold at the official price of N86 but the queues at the station were about two kilometres long.
Motorists in queue at the station were disorderly until a team of the Nigerian Security and Civil Defence Corps led by the state Commandant, Mr. Olusola Ayodele, came to restore sanity.
Many civil servants in Ekiti State have abandoned their cars for public transport due to the fuel scarcity.
A litre of petrol sold for N200 at filling stations in Ado Ekiti, while a commercial driver told our correspondent that it sold for N230 in the hinterlands.
In Edo State, the lingering fuel scarcity worsened on Monday, as a litre of petrol sold for N230 at the few filing stations that sold the product to hundreds of desperate motorists.
On the black market, it sold for between N250 and N300 per litre, while some black marketeers insisted on selling to only customers willing to buy five litres and above.
In Ogun State, transport fares on most of the routes had increased by between 50 and 150 per cent.
Commuters paid between N600 and N700 from Sango to Abeokuta, a journey that hitherto attracted between N250 and N300.
However, queues by motorists and other petrol seekers reduced marginally on Monday as more filling stations dispensed fuel in Abuja and parts of Nasarawa State.
The largest mega filling station belonging to the NNPC, located on the Kubwa-Zuba Expressway, had lesser number of motorists when compared to what obtained all through last week.
Officials at the Department of Petroleum Resources and the Federal Ministry of Petroleum Resources stated that the number of trucks from the Suleja depot to Abuja and environs had increased.
According to them, more filling stations received the product on Monday, as they expressed the hope that the situation would improve by the day.
Additional reports by Okechukwu Nnodim, Olufemi Atoyebi, Femi Makinde, Armstrong Bakam, Enyioha Opara, Kayode Idowu, Godwin Isenyo, Kamarudeen Ogundele, Alexander Okere and Samuel Awoyinfa
The Minister of State for Petroleum, Dr. Ibe Kachikwu, appeared before the Senate Committee on Petroleum Resources (Downstream) on Tuesday to give reasons for the acute fuel scarcity across the country and the efforts being made by his ministry to resolve the embarrassing situation.
Managing Director of the NNPC, Mr. Emmanuel Kachikwu
He regretted the situation and apologised to Nigerians, who he said were really going through difficult moments, and promised that the scarcity would end on or before April 7.
Kachikwu said he would not resign from his position as minister and instead asked those who were threatening to stage a protest in Abuja to save their money because he took the appointment to work for his fatherland.
The minister stated, “I will not resign. I am here to do my job. Those who are planning to stage a protest against me in Abuja should save their fuel money because I have a job to do, and I am committed to doing it well.
“I share the pains of Nigerians. I feel that pain every day. I walk the streets and those who are following my trajectories since I resumed office would see that even on Christmas day, I was at the refineries. On Easter Day, I was in Lagos monitoring fuel distribution at the depots.
“I have given 24/7 attention to the problems in this industry, which are unbelievable. I have continued to work with one sole purpose in mind, which is that every problem will have a solution.”
Kachikwu added, “I do apologise if a comment I make jocularly with my friends in the press about not being a magician offends some Nigerians; it wasn’t meant to be. It is a side jocular issue and I did go ahead to explain what needed to be done. I didn’t intend to create this kind of hyperbole that it did.
“Let me admit that I am not a typically experienced politician. I am a technocrat. Some of the phraseologies that I may use, while being acceptable in the arena in which I play, obviously will not be acceptable in the public political arena. If anybody’s sensitivities were offended by that, I totally apologise.”
He attributed the current petrol scarcity to the refusal by the major oil marketers to import, diversion of the product by marketers, pipeline vandalism, panic buying and non-computerisation of the distribution network to monitor trucks.
The minister lamented that since the payment of N600bn subsidy arrears, which the current administration inherited from the administration of former President Goodluck Jonathan, oil marketers had stopped fuel importation.
The development, he said, had forced the Nigerian National Petroleum Corporation to overstretch its capacity, human resources and facilities in order to bridge the gap, but that the corporation lacked the immediate capacity to handle the task.
Kachikwu said, “Let me put the reasons for the scarcity in three categories. First, when we came in August, this country had arrears of unpaid subsidy claims that were in excess of N600bn, which were not paid for over a year.
“Progressively, over a period of eight months, prior to my coming on board, people had been staying away from importation not at a heavy level, but by about 10 to 15 per cent of allocations were not being met.
“There was hope that ultimately, if the subsidy regime continued, they would get paid; so, some people continued to import, but by the time we came in, people had reached a breaking point and most of the companies didn’t have the liquidity even to go to the banks and open letters of credit, and that became a major issue.”
He said it was obvious that having cleared the N600bn subsidy claims, the country could no longer continue with the subsidy regime owing to dwindling oil revenue and the fact that monumental frauds were being uncovered in the system.
As of January 1 this year, the minister stated that the country was no longer paying subsidy, saving a cumulative amount of over N1tn in a one year period.
Kachikwu noted, “The second major issue was that once the N600bn subsidy money was paid, the ability of the marketers to import the product became a challenge, because they could not raise letters of credit, and up to this point, that still remains a major issue.
“So, even if they wanted to import, they needed letters of credit and adequate foreign exchange cover. Some of them were owing arrears of liabilities as a result of the commitment I had made on petroleum importation.”
As part of efforts to ensure a lasting solution to the problem, he stated that the nation was setting up for the first time strategic reserves of about two million tonnes to provide products always.
He said these would be operational as from May and would contain between five and seven cargos of fuel per reserve.
Kachikwu said, “Once we do that, we should be away from the incessant fuel crisis that we have.
We expect that between now and about the 6th to the 7th of April, the fuel queues will disappear, the DSDP will begin and the foreign exchange allocation will see us smoothly through the track.
“The refineries will be working and the volumes they will be producing will be sent to the strategic reserves to address difficult times. In April, we are expected to get 150 per cent of the volumes that will be needed. A lot of that will go to storage tanks. Hopefully, that should sort out the problem.”
He said privatisation of the refineries remained the best solution to end the fuel crisis in the country.
There are strong indications that President Muhammadu Buhari has initiated moves to forestall the escalation of the festering feud between the All Progressives Congress National Leader, Asiwaju Bola Tinubu, and the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu.
Managing Director of the NNPC, Mr. Emmanuel Kachikwu
The PUNCH reliably gathered on Monday that Buhari believed that Kachikwu’s statement and Tinubu’s criticisms could tear the party apart.
It was learnt that the President had therefore cautioned the APC chieftains and members of his cabinet against taking sides in comments and issues that could divide the party and derail his government.
A member of the cabinet, who confided in The PUNCH, said the President was of the view that any comment by the APC on the propriety or otherwise of Tinubu’s statement would divide the party and his government.
It was gathered that Buhari had told the minister that he should concentrate on how to end fuel scarcity before May, the time Kachikwu had proposed that there would be smooth fuel supply in the country.
The cabinet member stated, “I am aware that the President has moved in and cautioned ministers and party chieftains against divisive statements on the seeming feud between Tinubu and Kachikwu.
“At this time of the nation’s history, the President needs all the support of Nigerians. There should not be any distraction. The minister has been told that his main focus should be how to end fuel queues.”
Kachikwu had, in an interview with journalists in Abuja on Wednesday, said fuel queues could not be eliminated before May, adding that he was not a magician.
But Tinubu had, in a statement on Saturday, criticised the minister, saying Kachikwu’s position amounted to an act of insubordination to Nigerians, who voted public office-holders into their offices.
The National Secretariat of the APC on Monday kept mute over the controversy generated by Kachikwu on the fuel situation in the country, which was roundly condemned by Tinubu.
The National Chairman of APC, Chief John Odigie-Oyegun, and the party’s National Secretary, Mai Mala Buni, could be reached for comments on Monday.
Calls to their mobile telephones indicated that they were switched off while responses to text messages sent to them were still being awaited as of the time of filing this report.
However, a source within the party said, “The statement by our revered leader is not ambiguous. I honestly don’t see any ambiguity; he issued the statement and signed it in his personal capacity.
“He, like every Nigerian, has every right to speak out when he sees anything going wrong in the polity; you cannot deny him that right.
“Besides, I understand that the matter is being handled at the highest level; it is an internal party affair.”
Meanwhile, the Senate has directed Kachikwu to appear before it on Tuesday (today) to explain the cause of the embarrassing fuel scarcity across the country.
The Senate Committee on Petroleum Resources (Downstream) issued the summons after carrying out an on-the-spot assessment of the fuel situation at major filling stations within the nation’s capital, Abuja.
Members of the committee were confronted with long queues of vehicles at many filling stations.
The operators did not dispense the product to motorists, alleging lack of supply from the Nigerian National Petroleum Corporation’s depot in Suleja, Niger State.
The Acting Chairman of the committee, Senator Jibrin Barau, said the petroleum minister must appear before the panel to explain what led to the scarcity and the way to resolve it.
He said the fuel scarcity had become pathetic, forcing Senate President Bukola Saraki to call on the committee to assess the situation and the way to resolve it.
Barau added, “This situation is very bad and unacceptable, hence, the need for the minister to appear before us tomorrow (today) and unveil his plan of the way out to us.
“Even if he doesn’t have any plan yet out of the lingering problem, the Senate President and the entire members of the committee are more than ready to rub minds with him for that needed purpose.”
The Senate Minority Whip and a member of the committee, Senator Philip Aduda, called on the Federal Government to arrest the situation fast by making fuel available to Nigerians.
Aduda said, “What Nigerians need is fuel and not blame game. The government should look for petrol and ensure that it is given to the people.
“This situation is very and unacceptable. We are Nigerians and it will be bad for us to continue remaining in queues.
“If the APC leaders like, let them blame themselves; that is their problem, but the most important thing is for us to have fuel in the Federal Republic of Nigeria.
“That is what we are looking for and that is what we want. We want to see all these queues disappear.”
One of our correspondents observed that petrol marketers at various stations visited, lamented lack of supply and inadequate supply of petroleum products by the NNPC in recent times.
Isa Friday, the manager of Oando Filling station, Zone 4, Abuja, said it had been long the station got supply from NNPC depot in Suleja.
In a related development, the official pump price of petrol, otherwise known as Premium Motor Spirit, was largely upheld in just one state in the month of February 2016 out of the 36 states of the federation and the Federal Capital Territory, the National Bureau of Statistics has said.
According to the bureau, the average monthly price paid by consumers for petrol in Edo State was N86.5 per litre, while in Ogun, the price was close to the official rate as petrol users paid an average price of N86.53 per litre during the period under review.
The official pump price for petrol as approved by the Petroleum Products Pricing Regulatory Agency is N86 per litre for petrol stations run by the NNPC, and N86.50 per litre for outlets managed by other major and independent oil marketers.
The NBS, in its PMS Price Watch for February 2016, revealed that petrol was sold for as high as N122.88 per litre during the review period.
A study of the bureau’s report showed that the average cost for the product in Abia was N112.5 per litre; Bayelsa, N120.6; Cross River, N116.65; and Yobe, N122.88. The average price of PMS in February was higher in these states.
States that recorded average prices that were close to the official pump price included Lagos, N87.03 per litre; Borno, N87.88; Delta, N87.5; Oyo, N87.21; and Katsina, N87.95.
In its bid to ensure strict adherence to approved prices, the Department of Petroleum Resources recently announced the constitution and deployment of special intelligence monitoring teams nationwide to ensure the prompt delivery of products to designated filling stations.
“The teams would enforce government approved price regime and ensure the right quantity and quality of products are dispensed,” the DPR had said in a statement issued in Abuja.
Also, motorists on Monday pleaded with the Federal Government to step up efforts in ensuring that fuel queues disappear.
Motorists, who spoke with one of our correspondents while waiting to be served petrol in front of some filling stations in Abuja, wondered why it was becoming difficult for Nigeria to complete a full year without experiencing severe fuel crisis.
“This is becoming something that we must experience every year and it’s not good at all for an oil producing country like Nigeria,” said Onyema Christopher, a motorist, who was in queue at one of the NNPC’s mega stations on the Kubwa-Zuba Expressway, Abuja.
“The government should please look for a lasting solution to this problem and let Nigerians, at least, enjoy one whole year without experiencing fuel scarcity and the problems associated with it.”
The Federal Government Friday issued an apology to Nigerians on the prevailing power situation in the country which it attributed to gas failure, sabotage and vandalization of power infrastructure.
Lai Mohammed
Information and Culture Minister Lai Mohammed in a statement in Abuja said all efforts were being made to rectify the situation and ensure a gradual improvement in the power situation.
”There will be a decent improvement in the power situation from this weekend, thanks to ongoing remedial efforts that will double the current power supply to 4,000WM. Getting back to the 5,074MW all-time high that was reached earlier will take a few more weeks,” he said.
Alhaji Mohammed said at a time the routine maintenance by the Nigeria Gas Company has affected the supply of gas to power stations, forcing down power supply from an all-time high of 5,074 MW to about 4,000MW, a combination of unsavoury incidents further crashed the power supply to about half that figure.
He said: ”The vandalization of the Forcados export pipelines forced oil companies to shut down, making it impossible for them to produce gas. Then, workers at the Ikeja Discos, who were protesting the disengagement of some of their colleagues after they failed the company’s competency test, apparently colluded with the National Transmission Station in Osogbo to shut down transmission.
“The unfortunate strike by the unions at the NNPC, over the restructuring of the Corporation, shut down the Itarogun Power Station, the biggest in the country. Due to these factors, only 13 out of the 24 power stations in the country are currently functioning. It is this same kind of unsavoury situation that has affected fuel supply and subjected Nigerians to untold hardship.”
The Minister condemned some Nigerians who he said “will continuously sabotage the country’s power infrastructure” under the guise of the various unions in the oil and gas sector or sheer vandalization.
”The bitter truth is that for as long as these groups of Nigerians continue to sabotage the power infrastructure, Nigerians cannot enjoy a decent level of power supply. We therefore admonish all Nigerians who may be agitating for their rights in whatever form to refrain from any action that will further hurt the same people they claim to be protecting,” he said.
• Nigeria to stop importing petrol in 18 months, says Kachikwu
• House opposes new structure, minister clarifies state oil firm has not been unbundled
President Muhammadu Buhari has approved the restructuring of the Nigerian National Petroleum Corporation (NNPC) into seven new divisions, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, announced on Tuesday at a press briefing in Abuja.
Managing Director of the NNPC, Mr. Emmanuel Kachikwu
He explained that under the new structure, NNPC will have five core new divisions comprising the upstream, downstream, refining group, gas and power, as well as the ventures’ groups. The other two, he said, are finance and services groups.
He said the restructuring was the only opportunity available to the NNPC to become productive again, adding that employees of the corporation would have to work to earn their wages going forward.
Kachikwu pointed out that nothing much had changed with the unbundling except for the distribution of subsidiary companies of the corporation that would further be restructured into direct management of the new divisions.
He named some of the heads of the new divisions to include Mr. Bello Rabiu who would take charge as the head of the upstream company; Mr. Henry Ikem-Obi who would head the downstream company; Mr. Anibor Kragho as the head of refining group; Mr. Saidu Mohammed as head of gas and power market; and Babatunde Adeniran as head of the ventures’ groups.
Isiaka Abdul Rasaq is the chief financial officer, while the deputy managing director of the Nigeria Liquefied Natural Gas (NLNG), Mr. Isa Inuwa is now to head the corporate services unit of NNPC.
He listed some of the subsidiaries under the divisions to include Upstream: the Nigerian Petroleum development Company (NPDC) and Integrated Data Services Limited (IDSL); Downstream Retail: Nigerian Product Marketing Company (NPMC), which was formerly PPMC, (NPSC); Gas and Power: Nigerian Gas Pipeline and Transportation Company (NGPTC), Nigerian Gas Marketing Company (NGMC), and gas and power investment; and the Refineries: Warri Refining and Petrochemical Company (WRPC), Kaduna Refining and Petrochemical Company (KRPC), and Port Harcourt Refining and Petrochemical Company (PHRC).
The ventures’ company includes medicals, property, pensions, shipping, and wheel insurance.
Kachikwu said: “The president has approved the final phase of the restructuring of the NNPC, under that phase it is not so much different from what we have now but we have restructured ourselves into four key business components: the upstream, which is what you used to call the Exploration and Production (E&P), the downstream, which is what you called the Commercial and Investment (C&I), the gas power market, which is basically a pullout from the E&P, the refinery group, which is basically the three refineries, and of course the ventures, which is every other small company here and there that did not have a sense of direction.
“Underneath these companies, we have a collective of 20 companies on the whole, where we had about 16 before, so only about four are new introductions. So it is not so much the size and we have not split NNPC into 30 companies, but there are four major divisional groups.
“Four or five are business focused, while others provide services. Beneath these five that are business-geared are the companies that are there. For example, with PPMC, we have taken the pipeline and depots unit and put them into a different company so that somebody focuses on that, while PPMC deals with the marketing of products.”
According to him, all the analysis done to date in terms of the number of staff is that we are overstaffed and the only way we can do this is to create work so that everybody who is in the system has something that they are doing and so that they get busy and earn money.
On the restructuring, he explained that “this took months of work with consultants to flesh that out”, adding, “The principle of our restructuring is that nobody loses work because the environment is just too testy for now to throw people out of work.
So nobody is losing his/her job, but people are going to get busy in the respective business units and it is a chance for anybody who wants to progress in his career and prove himself to rise up and get what he/she wants.
“It is a five business focused unbundling and they all report to the GMD and the whole idea is to focus everybody that it is no longer an administrative but business role. The group is going to become more nimble.”
Similarly, the minister who disclosed that Nigeria was working to end importation of petrol in the next 18 months, said it would cost about $500 million to get the country’s refineries back to full capacity.
Kachikwu said that the plan would be supported by his ongoing discussions with new joint venture partners to build refineries alongside the country’s four existing refineries in Kaduna, Warri and Port Harcourt.
He said it was a shame that the country imports most of its domestic petrol needs, and that by the time the plan comes to fruition, the country should be able to attain self-sufficiency in providing for its domestic fuel needs.
“The policy on the whole is that we must target a time frame or 12 and 18 months to get out of importation. It is not good for the country, it is not a good image, it does not create jobs and we lose tax when it comes to the government and creates a huge amount of, quite frankly, emotional backlash when people have to queue looking for fuel.
“We are working feverishly, trying to work with joint venture partners who can come in and work with us. We have advertised recently for co-located refineries and asking people to come and co-locate new refineries into our refinery premises so that they can share pipelines, tankages, and we are working hard to see that we can complete whatever refinery upgrade we are trying to do within the next 12 to 18 months.
“Obviously, for the co-located refineries which are the new ones, we are targeting to see that we are able to finish within two to three years and if we do that, we will have excess capacity of refined products and bear in mind that Dangote is also bringing on-stream his own refinery.”
Speaking to THISDAY on the rationale for the restructuring of NNPC, especially the creation of the 20 new companies or new business units (NBUs), Kachikwu said it was done to prepare them for private sector participation.
“As you know, we intend to concession or enter into joint ventures in respect to injecting new capital and the operations of some of these firms; so they had to be unbundled so the right sort of investors can come in with capital and expertise to turn them around.
“Also the rationale for the restructuring of the corporation stemmed from the fact that it had become unwieldy, so the aim is to create smaller units with deliverable targets that are easier to manage,” he said.
However, before Kachikwu’s announcement on the president’s approval of NNPC’s restructuring, the House of Representatives yesterday cautioned against restructuring it without an amendment to the Act which established the state run-oil firm.
The House recalled that the NNPC was established through the Nigerian National Petroleum Corporation, CAP N123, Laws of the Federation, 2004, adding that its structure could therefore only be altered, changed or otherwise amended only by an Act of the National Assembly.
Following a resolution sponsored as matter of urgent importance by the Hon. Jarigbe Agom Jarigbe (Cross River PDP), the House urged Buhari, who is also the Minister for Petroleum Resources, to urgently transmit an executive bill to the National Assembly, if he intends to unbundle NNPC or execute fundamental restructuring or reforms in the oil sector.
Jarigbe noted that since petroleum and natural gas are included in the Exclusive Legislative List (Item 39) in the Nigerian Constitution, “not even a presidential fiat can restructure it”.
He called for the condemnation of what he termed an executive legislation by Kachikwu to “unbundle NNPC into 30 different entities without legislative approval”.
“The minister’s pronouncement preempts the provisions of the proposed Petroleum Industry Bill (PIB), which has not been introduced in the Eighth National Assembly,” he added.
The matter was referred to the House Committees on Petroleum Upstream, Petroleum Downstream, Gas and Local Content and Legislative Compliance.
However, Kachikwu, in his defence, told THISDAY that NNPC has not been broken up or unbundled as erroneously reported, explaining that what the president approved was the restructuring of the corporation and there was nothing wrong with it as long as it was done within the confines of the law.
“NNPC has not be unbundled or broken up. It remains the same entity but with different units internally for enhanced efficiency and profitability. Besides, the NNPC Act allows for the restructuring of NNPC.
“It is the PIB that provides for the unbundling or break up of NNPC into separate units and that has not happened with what we have done,” he said.
By Michael Eboh, Emman Ovuakporie & Johnbosco Agbakwuru
ABUJA—THE Minister of State for Petroleum/Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Ibe. Kachikwu, yesterday said the Federal Government did not pay any subsidy on petroleum products in January 2016.
Managing Director of the NNPC, Mr. Emmanuel Kachikwu
He also stated that the country would save $1 billion (N200 billion) from the newly introduced Direct-Sale-Direct-Purchase, DSDP, arrangement in Nigeria’s crude oil for products transaction which is to commence next month.
Kachikwu stated these when he appeared before the House of Representatives’ Ad-Hoc Committee set up to investigate the NNPC’s offshore processing and crude swap arrangement for the period from 2010 to date.
He explained that the DSDP was adopted to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement so as to introduce and entrench transparency in the crude oil for product transaction by the corporation in line with global best practices.
The Direct Sale-Direct-Purchase alternative allows for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.
Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.
Kachikwu stated that the DSDP option eliminated all the cost elements of middlemen and gave the NNPC the latitude to take control of sale and purchase of crude oil transaction with its partners, adding that the initiative would save one billion dollars for the Federal Government.
He said: “When I assumed duty as the Group Managing Director of NNPC, I met the Offshore Processing Arrangement (OPA) and like you know, there is always room for improvement.
“I and my team came up with the DSDP initiative with the aim of throwing open the bidding process. This initiative has brought transparency into the crude-for-product exchange matrix and it is in tandem with global best practices.”
He further stated that the DSDP initiative whittled down the influence of the minister in the selection of bid winners as it allowed all the bidders to be assessed transparently, based on their global and national track records of performance before the best companies with the requisite capacities are selected.
Need for introduction of DSDP
Commenting on the need for the introduction of the DSDP, Kachikwu maintained that the policy was aimed at reducing the gaps inherent in the OPA and the losses incurred by the NNPC in the past.
He stated that the new arrangement would help the NNPC grow indigenous capacity in the international crude oil business and generate employment opportunities for indigenous companies that were selected.
He added that the DSDP initiative gave other government agencies, such as the Bureau of Public Procurement (BPP) and Nigeria Extractive Industry and Transparency Initiative (NEITI) the opportunity to be part of the bidding process in order to engender adherence to due process.
Misgivings by some agencies
Speaking on some of the reported misgivings by some federal agencies over the alleged non-transparent nature of past crude-for-products exchange arrangements, Kachikwu assured that the reconciliation process was ongoing and that going forward, the ministry would deploy technology to track cargoes and trans-shipment at the reception depots in order to forestall any incidence of round tripping.
The NNPC had in November, said it had discontinued the Offshore Processing Arrangement, OPA, and had replaced it with Direct Sale-Direct-Purchase (DSDP) programme.
The NNPC had also stated that the replacement of the OPA with the more efficient DSDP was aimed at enshrining transparency and eliminating the activities of middlemen in the crude oil exchange for product matrix.
To this end, the NNPC withdrew the call for commercial bids issued to 44 bidders, made up of 34 international firms and 10 indigenous companies, earlier shortlisted.
The National Economic Council (NEC) rose from its 65th meeting on Thursday in Abuja, with a resolution to engage two audit firms to conduct forensic audit on 81 government revenue generating agencies.
Managing Director of the NNPC, Mr. Emmanuel Kachikwu
The approval followed submission of an interim report by the ad hoc committee of NEC, chaired by Gov. Adams Oshiomhole of Edo, to review the management of the Excess Crude Account and remittances into the Federation Account.
The governors of Jigawa, Baderu Abubakar; Anambra, Willie Obiano; Lagos, Akinwumi Ambode; and the Minister for Budget and National Planning, Udoma Udo Udoma, said this in their joint briefing to journalists.
According to Mr. Ambode, 18 core revenue generating agencies, such as NNPC, will be audited by KPMG, an international audit firm, while an indigenous firm, SIAO, will audit other non-core revenue generating agencies.
The governor said that NEC would take further action on the agencies after the firms had completed the forensic auditing.
The Jigawa governor said that the Accountant-General of the Federation reported to council that as at Dec. 31, 2015 the Excess Crude Account stood at $2.26 billion.
The governor said that the Central Bank Governor, Godwin Emefiele, informed the council of the standing of the bailout funds given to states.
He said that 23 states had benefitted from N10 billion each, Excess Crude Account-backed soft loan, while 28 states benefitted from the presidential bailout for the payment of salaries and gratuities.
Gov. Obiano gave a report concerning some MDAs collecting revenue in foreign currency and remitting in local currency into the Federation Account.
Mr. Obiano said the permanent secretary, Ministry of Finance, reported that besides NNPC, NIMASA and NPA, other agencies involved in such practice were FIRS, Shippers Council, Airport Authority and Nigeria Immigration Service.
Mr. Obiano said that the official reported that the introduction of the Treasury Single Account (TSA) had resolved the problem as all account was now under the CBN.
He also said that Vice President Yemi Osinbajo, who presided at the NEC, reiterated the Federal Government’s policy that NNPC and other agencies must present budget for approval before spending in line with the TSA.
Mr. Udoma hinted on the 2016 budget focus of the administration, saying that plans were on to foster macro-economic stability conducive to the grow of the GDP at 4.2 per cent.
He said the budget’s objective was to deliver inclusive growth to Nigerians, create sufficient jobs and build an economy less vulnerable to oil price shocks.
According to Mr. Udoma, while the government intends to ensure more revenue drive, it will not increase taxes, but strive to raise the collection of VAT from its 20 per cent level.(NAN)
Oil workers in the industry’s three regulatory agencies have rejected the redrafted Petroleum Industry Bill (PIB) soon to be presented to the National Assembly.
OIL
The PIB is to replace the one passed by the Seventh Assembly but which was not assented by the president.
Minister of State for Petroleum Resources Dr. Ibe Kachikwu had announced plans by the government to send another draft of the bill for the lawmakers’ consideration. The old bill, he said could not meet the yearnings of value-addition to the oil industry. But the content has not been made public.
But yesterday, workers in the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA) and Petroleum Equalisation Fund (PEF), said they would not accept the draft bill because it neglects their welfare.
The workers said: “Petroleum Industry Governance & Institutional Framework Bill 2015”, if allowed to be passed into law, the bill, will lead to job cuts in some of the regulatory agencies. The bill seeks to provide the governance and institutional framework for the petroleum industry and other related matters.
The workers operating under the auspices of Regulators Forum have petitioned the national leadership of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) not to allow the bill scale through without taking care of the anomalies contained in it.
The petition signed by PENGASSAN Chairman, PPPRA Chapter, Victor Ononokpono, along with his DPR counterpart, Garba Bello, and PEF, Aminu Ahmed, said the concerns of the workers bordered on observations that the redraft institutional and legal framework for reforms in the oil and gas industry may have inadvertently left the oil workers in the cold.
While commending the Minister’s effort to stimulate reforms in the industry after several failed attempts, they argued that some inconsistencies in the draft PIB had stirred some fears about a veiled attempt by the government to sack its members.
They drew attention to some of the inconsistencies, especially in Part 3 of the redraft PIB which seeks to establish the Nigeria Petroleum Regulatory Commission (NPRC), Section 13, on the composition of its Board, and Section 87, on the Transfer of staff.
They noted that the Bill provides that the Commission would combine the monitoring and regulatory roles and responsibilities of DPR and PPPRA to “administer and enforce policies, laws and regulations relating to all aspects of petroleum operations.”
They expressed concern about the silence of the redraft Bill on the fate of the Petroleum Equalisation Fund (PEF) vested with the responsibility of ensuring uniform pricing of petroleum products, adding that “the union senses a subtle ploy to retrench or drop some of the work force transiting to the Nigeria Petroleum Regulatory Commission with the contentious clause on ‘transfer of certain employees.
“Cessation of employment and transfer of staff should be automatic and guaranteed as provided by the Public Service rules and Constitution of the Federal Republic of Nigeria.”
According to the workers, unlike the former PIB, the redraft bill does not make provision for the representation of the organised labour on the board of the Nigeria Petroleum Regulatory Commission (NPRC).
To the workers, the redraft bill is a departure from the provisions of the original draft 2012 Bill. Part D, Section 47 (2) (f) and (g) on the Board of the Downstream Petroleum Regulatory Agency (DPRA), representatives of the two major oil workers unions, the National Union of Petroleum and Natural Gas Workers (NUPENG) and PENGASSAN were listed as members.
“Apart from the uncertainty of the agency’s institutional role, the draft Bill as currently drafted will create job loss, as no provision for absorption or transfer of service for the work force is contemplated,” the oil workers’ representatives said.
“The Central Working Committee must make a public position known on the non-inclusion of organised labour in the composition of the governing Boards of Commission against international best practice.”
They asked the national unions to extract a memorandum of understanding on the re-drafting of the contentious issues, particularly as it concerned job loss of PENGASSAN members across the existing agencies (PEF, PPPRA and DPR).
ABUJA — The Nigerian National Petroleum Corporation, NNPC, yesterday, apologised to Nigerians for the hardship experienced in purchasing petrol, while it also stated that it had entered into a partnership with security agencies in the country to assist in the monitoring of fuel supply across the country.
Managing Director of the NNPC, Mr. Emmanuel Kachikwu
He said: “We must all make sure that petroleum products get across to Nigerians at the regulated price especially as the yuletide season approaches. We have enough products and we want to plead with the Petroleum Tanker Drivers (PTDs) not to be involved in the diversion of petroleum products in order to avoid causing untold hardship to motorists.”
Role of the security agencies
Providing insight on the role of the security agencies in curbing product diversion, Managing Director of the Pipelines and Products Marketing Company, Mrs. Esther Nnamdi-Ogbue, said the DSS and EFCC have been mobilized to bring to book any marketer involved in sabotaging the efforts of the Federal Government in making petroleum products available to motorists across the country.
She said: “We have invited the EFCC and DSS to join us in this campaign of monitoring the movement of petroleum products and they have our mandate to sanction any errant marketer. Enough is enough.”
She urged Nigerians and other motorists to desist from panic buying assuring that there are sufficient petroleum products to satisfy local consumption.
Meanwhile, giving breakdown of fuel supplied to petrol stations, the NNPC stated that Suleja, Kaduna, Kano, Minna, Gusau, Mosimi and Satelite depots dispatched 7.398 million litres, 0.937 million litres, 4.4 million litres, 0.444 million litres, 0.939 million litres, 4.351 million litres and 1.937 million litres respectively.
In addition Ore, Ibadan, Gombe, Benin, Warri, Port Harcourt, Aba, Makurdi and Enugu dispatched 0.338 million litres, 0.412 million litres, 3.024 million litres, 0.318 million litres, 0.318 million litres, 3.097 million litres, 0.298 million litres, 0.891 million litres and 1.737 million litres respectively to petrol stations across the country.
Some angry casual staff of the Nigerian National Petroleum Corporation (NNPC) took to the street on Wednesday to protest their complete neglect by their contractors.
The workers blocked the entrance of the NNPC requesting for the payment of 9 months from the contractors.
One of the protesters who spoke with NAIJA CENTER NEWS said that the government paid the contractors who have refused to pay them.
A protester who didn’t want to be named said ” We are in Warri refinery, we are on a demonstration in refinery. They have held our salaries for seven months, some over twelve months. The promises we have been hearing is that there is no money, so we matched today that no one is going in and out until our monies are paid.
“The contractors owe the support staff for many months, they said they held their meetings and told us they will pay us at the end of the month, but we said that is too far”
“But what we knew was the former Managing Director, Engr Adewole ladenegan mismanage our fund which some of this present management were among”
Several calls put across to manager of one of the contractors, Desire Mike were not answered.
The Economic and Financial Crimes Commission (EFCC) has seized bullet-proof vehicles, huge cash and jewellery from five prominent Nigerians fingered in the money laundering allegation against former Petroleum Resources Minister Mrs Diezani Alison-Madueke.
Alison Madueke
EFCC and its British counterpart, National Crime Agency (NCA), are probing the suspects for allegedly conniving with Alison-Madueke to commit the crime, it was learnt yesterday.
The former minister was arrested in London on October 2 for alleged money laundering, bribery and corruption.
EFCC has restricted the movement of the ”high-profile” suspects to Nigeria, pending the conclusion of investigation.
Some of them may be extradited to the United Kingdom (UK), if the former minister is going to face trial.
According to investigation, EFCC is still searching the companies and homes of more suspects linked with the former minister, following fresh clues.
Most of the areas under surveillance are in Abuja and Lagos.
A top source said: ‘’It is too early to declare whether they are guilty or not. But in line with international best practices, the EFCC has invoked the assets forfeiture clause in its Act to seize some choice bullet-proof vehicles, huge cash and jewellery from these suspects.
‘’The movement of the affected suspects has also been restricted to Nigeria pending the conclusion of investigation.
‘’The case at hand involves a high-net worth syndicate with tentacles across the strata of the society. But we are already cracking the investigation.’’
Asked if the suspects will be tried in Nigeria, the source added: ‘’It is uncertain or remote because the NCA has initiated a process in the UK, we will not want to duplicate the process.
‘’ If necessary, some of the suspects might be extradited to the UK for trial. This depends on NCA because EFCC is only collaborating with the agency.’’
It was learnt that some NCA officials are in the country to work with EFCC on the case.
A source said: ‘’Some officials of the NCA are in the country for collaboration with the EFCC on this investigation of the allegations against the ex-minister.
‘’The EFCC has more knowledge of the terrain than the NCA in tracking down some of these suspects.’’
Neither the EFCC nor the NCA was willing to speak on record last night.
Alison-Madueke and four others have been under investigation. On October 2, they appeared before the NCA team in the UK.
The names of the four remaining suspects are being kept under wraps in ‘’order not to jeopardise investigation.’’
ACCRA: A Ghanaian government delegation is holding emergency talks in Nigeria to avert a drastic gas supply cut threat, a government spokesman said, thus avoiding a potential political crisis.
KACHIKWU nnpc
The Nigerian National Petroleum Corporation said it will cut gas supply by 70 percent to Ghana’s main power generation company by Friday due to unpaid debts of $181 million. Ghana already suffers power shortages and Nigerian gas meets about 25 percent of its needs.
“They are already in Nigeria. They left Ghana last night. We are praying that they are able to negotiate … so that it doesn’t come to a cut in supply,” a spokesman for the power ministry told Joy FM radio Thursday.
Power cuts have raised the cost of doing business and angered voters at a sensitive time for President John Mahama’s government ahead of what is expected to be a tough re-election battle next year.
Mahama has vowed to end the power cuts by the start of next year and the minister for power has said he would resign if the problem has not been fixed by then.
The government’s room for manoeuvre is limited, however, under the terms of an aid program with the International Monetary Fund it is following to restore balance to its economy.
Ghana was for years one of Africa’s economic stars but falling global commodity prices have blunted the value of its gold, cocoa and oil exports.
Its fiscal problems include inflation of up to 17.4 percent in September, a currency that has fallen sharply in the last two years and a debt-to-GDP ratio of around 70 percent with what economists say are high debt service costs.
The Nigerian threat is a sign of budgetary stress and the strain of energy sector reform in Ghana, experts said.
“It is extremely embarrassing for the government. It touches on credibility … Every investor will be looking at that and saying, ‘Is this a country to do business in?"” Ben Boakye of the Africa Centre for Energy Policy think tank told Reuters.
Nigerian gas flows to Ghana through the West African Gas Pipeline Company’s pipe that runs via Benin and Togo. VRA buys the gas to fire power plants mainly in the east of the country.
Hydro supplies around 50 percent of Ghana’s power with the rest from its own gas and other sources.
The power crisis stems from a fall in supply from Ghana’s dams, government underpayment to the Electricity Company of Ghana, residents’ illegal consumption and tariffs too low for VRA to recoup its costs.
President Muhammadu Buhari has taken his first major step towards overhauling the Nigerian National Petroleum Corporation (NNPC) by giving its exploration joint ventures control over their own budgets as a way of overcoming chronic cash shortages.
General Buhari
The approval is no different from one of the crucial reforms proposed in the Petroleum Industry Bill (PIB) which has been pending before the National Assembly for eight years.
The PIB provides for the incorporation of the joint venture assets into companies, enabling them to raise funds independently from financial markets and control their budgets.
The initiative will save the federal government cash calls running into several billions of dollars for funding the joint venture oil blocks.
To speed up an often glacial decision making process at NNPC, Buhari has given the green light to revamp several joint ventures involving its poorly managed production and exploration arm – the Nigerian Petroleum Development Company (NPDC) – according to a letter by NNPC’s Group Managing Director, Dr. Ibe Kachikwu signed by Buhari, a copy of which was reviewed by Reuters.
NNPC did not respond to a request for comment but several oil sources confirmed the authenticity of the letter.
Nigeria produces about 2.2 million barrels per day of oil with foreign and local companies through production sharing contracts and joint ventures (JVs).
But projects have been held up because NNPC needs parliamentary and regulatory approval to spend anything. Officials and lawmakers are often six months late in giving their nod, making proposals irrelevant as costs exceed the original budgets. As a result, unpaid bills have been piling up.
According to the letter, the JVs will be turned into firms that control their own budgets. This will be similar to gas firm Nigeria LNG (NLNG), which “sources for its own funding, pays taxes and royalties and also pays dividends,” the letter said.
NLNG, in which Shell, Eni and Total have stakes along with NNPC, is one of the few efficient oil operations in Africa’s top crude producer.
There won’t be any immediate impact on oil exploration and production from the new model, so-called incorporated joint ventures, as it will be tested on a few blocks first. If successful, it could be expanded to other arms of NNPC, an industry source said.
But analysts see the new joint venture structure as a sign that reforms are finally underway.
“This could be an important early indicator for a key aspect of reformed oil sector policy – how to incentivise and maintain upstream investment by local private companies, and resolve operational issues between them and NNPC,” said Roderick Bruce, West Africa energy analyst at IHS.
To bypass time-consuming parliamentary approval, NNPC is expected to reduce its stake in joint ventures to below 50 per cent from 55 per cent by selling assets to local firms.
“Now the incorporated JV can raise funding more easily as it’s a model international investors will understand and there will be a balance sheet behind the IJV,” said Kola Karim, chairman of energy company Shoreline.
The letter states that this plan will apply to five oil blocks sold by Shell in 2011-2012 to local companies Shoreline Natural Resources Nigeria Ltd (OML 30), First Hydrocarbon Nigeria Ltd (OML 26), ND-Western Ltd (OML 34), Elcrest E&P Nigeria Ltd (OML 40) and Neconde Energy Ltd (OML 42).
It also covers West African Exploration and Production Co, which bought two oil assets in 2015 from Shell.
Oil traders and executives said dealing with NNPC has become more efficient under Kachikwu, who took over in August and is expected to be appointed oil minister following his confirmation by the Senate on Wednesday.
The exploration overhaul is seen as a start to further changes at NNPC after years of relative standstill under Diezani Alison-Madueke, the former oil minister under Buhari’s predecessor, Goodluck Jonathan.
She is being investigated by Britain for money laundering but has denied any wrongdoing.
Apart from dealing with stagnating oil production, Buhari needs to shake up the ailing refinery business, which forces the government to rely on expensive imported fuel for 80 per cent of its energy needs.
Since his arrival, Kachikwu has been wading through piles of receipts in the four towers of NNPC’s Abuja headquarters to get an idea of what the state giant owes foreign firms, part of an audit ordered by Buhari to tackle corruption.
With oil exploration firms working more efficiently under the new model, NNPC hopes to make a small step towards reducing its pile of unpaid bills.
But uncomfortable talks loom as oil firms say they are owed as much as $7.5 billion from the past few years, while NNPC puts the amount at $6 billion.
“During Diezani, the board hardly met, so expenses were not approved. Now NNPC is saying they won’t honour those that weren’t approved … the paper trail did not keep up. There has been a disconnect between expenditure and approval,” a source close to the matter said.
For example, for one joint venture project worth about $3 billion, NNPC still disagrees that over $300 million was spent on it ages ago, an industry source said.
“It will take three months to reconcile and another six months at least to figure out how to cover it. The obligations date back three years to 2012,” a banking source said, speaking of the overall debt.
Fashola calls for state police, apologises on deportation of Igbos
By Henry Umoru & Joseph Erunke
ABUJA — FORMER Lagos State Governor, Babatunde Fashola (SAN), Group Managing Director of the Nigeria National Petroleum Corporation, NNPC, Dr Ibe Kachikwu and Mrs Kemi Adeosun were clearly the star attractions at the screening of ministerial nominees, yesterday, as the Senate cleared 18 nominees for ministerial appointment.
Governor Fashola
Fashola’s suggestions on state police, review of the Abuja Master plan and apology to the Igbo over the deportation of some Igbo residents of Lagos during his second term marked one of the major highlights of yesterday’s screening of the nominees.
So also were Kachikwu’s comments on the oil industry and Adeosun’s remarks on the economy, devaluation of the Naira and Treasury Single Account, TSA, foreign direct investment and how to improve Nigeria’s alternative sources of revenue.
Their robust comments paved the way for the approval and confirmation of 18 of the 36 nominees for appointments as ministers after two days of screening. President Muhammadu Buhari had first sent a list of 21 names. He later sent a list containing 16 names, from which he yesterday withdrew the name of former Deputy Governor of Niger State, Ahmed Isa Ibeto.
Those screened, cleared and confirmed by the Senators as full time ministers to be assigned portfolios by the President were Senator Udoma Udo Udoma (Akwa Ibom); Dr. Kayode Fayemi (Ekiti); Chief Audu Ogbeh (Benue); Dr. Ogbonnaya Onu (Ebonyi); Dr. Osagie Ehanire (Edo); Lt.Gen. Abdulrahman Dambazzau (Kano); Alhaji Lai Mohammed (Kwara); Hajia Amina Ibrahim Mohammed (Gombe); Engr. Suleiman Hussaini Adamu (Jigawa); and Ibrahim Usman Jibril (Nasarawa).
Also cleared and confirmed as ministers were former governor of Lagos State, Babatunde Raji Fashola; Group Managing Director, Nigeria National Petroleum Corporation, NNPC, Dr. Emmanuel Ibe Kachikwu (Delta); Abubakar Malami, SAN (Kebbi); Senator Chris Nwabueze Ngige (Anambra); Senator Aisha Jummai Alhassan (Taraba); Barrister Solomon Dalong (Plateau); Mrs Kemi Adeosun (Ogun); and Senator Hadi Sirika (Katsina).
After yesterday’s screening exercise which started at 11.48am and ended at 5.10pm, Senate President Bukola Saraki called for a voice vote to approve and confirm the nominees.
Those Awaiting Screening
Rotimi Amaechi, Barr. Adebayo Shittu, Bukar Ibrahim, Cladius Omoleye Daramola, Prof Anthony Onwuka, Geoffrey Onyema, Dan Ali, Barr James Ocholi, Zainab Ahmed, Okechukwu Enelamah, Muhammadu Bello, Mustapha Baba Shehuri, Aisha Abubakar, Heineken Lokpobiri, Adamu Adamu, Isaac Adewole, Abubakar Bawa and Pastor Usani Uguru.
Drama over Lai Mohammed’s confirmation
There was, however, a mild drama when Saraki called for yes or nay chant over the National Publicity Secretary of the All Progressives Congress, APC, Alhaji Lai Mohammed as nay chants from Senators of the Peoples Democratic Party, PDP appeared to have overtaken that of the ayes during the Committee of the Whole because of their large number in the chambers, but Senate President Saraki had his way and confirmed Mohammed. The nominee from Oyo State, Barrister Adebayo Shittu whose name was number nine on the Order Paper was however not called for confirmation, probably for lack of time.
Ibeto’s nomination withdrawn
Before the commencement of yesterday’s screening exercise, Senate President Saraki announced that President Buhari in a letter to him had withdrawn the name of the immediate past Deputy Governor of Niger State, Ahmed Musa Ibeto. Ibeto’s name was one of the 21 ministerial nominees first sent to the Senate on September 30, 2015. No reasons were given for the withdrawal of Ibeto’s name. Senate President Saraki had on Tuesday read the final list from the President containing 16 names and on the list was Abubakar Bwari Bawa from Niger State, obviously the replacement for Ibeto.
Why senators will screen Amaechi today
Meanwhile, contrary to the Order Paper which had former governor of Rivers State, Rotimi Amaechi as one of those to be screened yesterday, the Senate shelved his appearance.
Chairman, Senate Committee on Ethics, Privileges and Public Petitions, Senator Samuel Anyanwu said that it was not possible to screen Amaechi because the report on the petition against Amaechi was not ready. Senate President Saraki, however, urged members of the Committee to ensure that the report was ready today.
How Fashola rattled Senators
Former governor of Lagos state who appeared before the Senators from 11. 48am to1pm told the Senators of the need to review the Abuja Master Plan which has been distorted, just as he said that it has become imperative to decentralize the Nigerian Police as he advocated the establishment of a state policing system if the nation’s insecurity problem must be addressed.
Fashola who defended allegations concerning a N78 million website and N258 million borehole, said that throughout his stay as governor for eight years, nobody has so far come out to accuse him of enriching himself corruptly, even as he said that he did not personally sign any cheque as well as his commissioners. He also apologised to Nigerians for deporting some citizens of the state,particularly from the South-East to their states of origin.
He said: “The number available to me is that we have probably a standing Police force of about 500,000, les than a million in every event to a population that is heading to 180 million. So, we are under-policed and if the Federal Government decide to take up these responsibilities on its own, can it do so in the micro level that is necessary at the state and local government levels?
“My recommendation is a compelling urgency for decentralization. I have made those recommendations to some of the committees on constitution amendment where I was privileged to make presentations. There have been arguments about why we should not go there but those argument did not go far. They did not address the fundamental responsibilities that government has. I have heard the argument that government will abuse the Police for political purposes.
“The abuse of political power is not as important as loss of lives, and everything we do to advance that cause makes us more respected as government that cares. There is a process for curing abuse of institution but there is no process known to me today for recovering lives already lost. These are challenges that are before us as a people and as a nation. At the state level, you can also wonder what governors are going through.
“They have parliaments that make laws but they have no capacity to enforce their own laws. We are talking about domestic issues — rape and domestic violence — there are criminal offences in many states across the country but who is prosecuting them? This is because the Police officer is too busy chasing a robbery. Our mothers, daughters and sisters are expected to tolerate rape. If we are afraid of abuse, one of the things I will suggest is that we start a state Police.
“I proposed a system where we have six zonal commands from existing the Police force. It is not every state that can start if it cannot fund it. States who can fund can decide to employ 1,000 men, the Police Service Commission will train and graduate and if at the end of the training, only 800 pass the exam, they would be employed. The state buys their uniforms, there is a national license.”
On security, Fashola said, “ As far as security is concerned, that is the primary purpose of every government. It is the purpose for which government exists, to protect the citizens and their assets and it is the toughest job that any government can have. It is the challenge that leaders across the world are facing — terrorism, youthful gangs, cults and so on.
“My attitude was to see criminals as my competitors and in a competition, my desire was to use my resources to outspend my competitors, out-think the competition and out-maneovre the competition. But our risks are different. As a governor, my job was to ensure that nobody died, my job was to ensure that nobody robs. So, I have no magic for error. Every citizen that was robbed, I have failed that citizen. So, I have to be right every time, the criminal has to be right only once.
“So, we brought all the stakeholders — from the banks who were being robbed everyday then without the capacity to respond and one of the things I told one of the bankers was that if he could protect and bullet-proof his banks, if he cared about his workers and customers, can the government bullet-proof every home? If you bring some of this money and we put it in a pool and give these Policemen, it will help us and so, the point here is that there is a necessity here to decentralize.
Speaking on Abuja, the nominee said, “ In deciding what to do about Abuja, these are the real issue. First, getting a hold of its resources, knowing its districts and its problems, knowing the people, sharing with them what the thoughts are. The Master Plan itself may perhaps need to be reviewed. Plans are not static documents, they must be reviewed periodically. A level of consultation and knowledge would be necessary in order to accurately say this is where Abuja should be heading. In spite of our complaints, it is still a beautiful city, getting it to be better than it is, is a matter of choice for all of us. Laws have to be enforced and it should be rigorously followed.”
On old and young politician and how they relate to economic development, he said, “The sum total of every nation is its people. The more elderly ones are the more matured ones. No matter how hard we try, we will never discount the experience, the maturity, counselling and guiding support of people who are older than us. We must continue to interface with them. I must walk away from the tendency to condemn the level of our national development. We must begin to see our cup as half full rather than half empty.”
On the alleged website project, Fashola said: “Let me say first that it raises the question of public understanding of the role governors, public servants and some have a surprise to learn that as a governor of Lagos State, I didn’t sign cheques, none of my commissioners signed cheques. I didn’t fix contract prices. It is an institutional process.
“The only training I have is that of a lawyer. Nobody can award contract over benchmark price. Throughout my tenure, I have been confronted with the price of things and the reality is that when you design a road, what you meet in reality when construction starts is usually not what you end up with. In all of these, nobody has alleged that I have corruptly enriched myself. I could not have been a master in computer and technology. I need something to do my work.”
When asked about his definition of loyalty, Fashola who noted that he remained loyal to causes he believed in said: “As for loyalty, the concept of loyalty is a strange one. The real answer to that question is, may your loyalty not be tested. I always pray that my loyalty will not be tested because you might have to take a bullet for somebody. We discuss it loosely, but in public service, I have remained loyal to causes that I have signed onto and in all my life, nobody can fairly accuse me of giving my word and going back on my word.”
Fashola calls for state police, apologises on deportation of Igbos
On deportation of Igbo people, he said: “In a federation, the right to free movement is not absolute, it carries with it a responsibility not to be a nuisance.” He said those moved to their states of origin were those who asked to be taken home. Fashola concluded his submission by saying he apologised in the interest of national cohesion.
No palliatives, no fuel subsidy removal
Also answering questions from Senators when he appeared before them, Dr. Emmanuel Ibe Kachikwu who noted that there will be no removal of subsidy until palliatives were put in place, disclosed that with the non-passage of Petroleum Industry Bill, PIB, Nigeria was losing 15 billion dollars yearly, adding that the Federal Government has no plans to reduce the price of fuel.
Kachikwu who disclosed that plans were on to distribute free cylinders to every home with gas stations closer to homes, said that over 40 percent of what NNPC makes is used by the corporation, adding, “in the next one, two days, you find that individuals will open their stations and products are there. We have enough storage in this country that will last us for the next 40, 50 days.
“First of all, let me say that one of the things I’ve said to myself since resuming as GMD of NNPC is that I will not be constrained by the lack of PIB in making sure that holistic solutions to the industry continue to be propelled. So, using existing laws, we have continued to make changes.
Because at the end of the day, whether or not PIB is available and passed, it really doesn’t lie within the umbrella of the executive, it lies with this revered Assembly. But I also do not think that the problem with PIB has been the facts of the versions. By the time the last Senate was rounding off, it had gotten a version that was clearly the version that both houses were looking at. Am I going to create a new version? Not really. What I will need to do is take the version that you have, look at it again and make changes.
“The key issue is that as long as we continue to want to pass a holistic PIB, it is going to be a very major challenge. But once you begin to break it up into critical aspects, you begin to make a faster run to passing PIB. Fiscal regime, for example, you ask yourself, why would you want to have fiscal regime inside the PIB? Because to change those fiscal regimes, which are very dynamic environment, you have to come back to this Assembly to also make changes.
“You must find a way of pulling out fiscal regimes and leave them to existing tax laws which you can amend. And additionally, look at the PSCs and Joint Venture Agreements to enable you determine fiscal regimes. The advantage in that is that you have the flexibility of changing with the times.
“At the time when oil prices was so low that nobody was willing to invest in your country, you may give some incentives. At the time when they are so high that people are making outrageous profits, you may increase your taxes. But so long as you leave it in a holistic blue-barrelled, high voluminous PIB, you are stuck in terms of how you are going to get the required votes each time to make amendment. I think the way to go is, first of all, take what is there, look at it in the context of where we are today.”
We need creative solutions – Adeosun
Mrs. Kemi Adeosun expressed the need for creative, innovative solutions to add value to our country and economy. Responding to questions, Mrs Adeosun said that to block leakages, we need to ‘chase out cash. Every where that people transact in cash, there are leakages.”
She said the country needs to adopt other forms of cash transfer that phases out physical cash, adding that there is need to invest primarily in infrastructure. She also said that banks are not in business to sit on government money, it’s bad economics.”
“TSA was introduced in Ogun State in 2011, which consequently reduced borrowing by the state government,” Mrs. Adeosun said. Speaking about foreign investment, she said that the major challenge of foreign investment is infrastructure.
“We need to establish public-private-partnerships to develop Nigeria’s infrastructure. If we get our infrastructure right, there are opportunities,” adding that Nigeria has to increase its revenues and improve on things like audits.
“Increase revenues, better cost efficiency and seek out other sources of funding to avert recession”, Mrs Adeosun said. Advising the government on cost-reduction, Mrs. Adeosun said that we all need to eat, drink, and focus on ‘Made in Nigeria. Addressing funding to non-oil sectors of the economy, she said that our interest rates are far too high. It’s very difficult to make a profit with these interest rates.
“Markets tend to over-react when there is a shock or a slight depression, hence, the recent recession projections”, Mrs. Adeosun said. She added that unemployment Solutions, jobs and entrepreneurship are what she intends to capitalize on while crashing interest rates.
“TSA was introduced in Ogun State in 2011, which consequently reduced borrowing by the state government,” Mrs. Adeosun said. Speaking about foreign investment, she said that the major challenge of foreign investment is infrastructure.
“We need to establish public-private-partnerships to develop Nigeria’s infrastructure. If we get our infrastructure right, there are opportunities,” adding that Nigeria has to increase its revenues and improve on things like audits.
“Increase revenues, better cost efficiency and seek out other sources of funding to avert recession”, Mrs Adeosun said. Advising the government on cost-reduction, Mrs. Adeosun said that we all need to eat, drink, and focus on ‘Made in Nigeria. Addressing funding to non-oil sectors of the economy, she said that our interest rates are far too high. It’s very difficult to make a profit with these interest rates.
“Markets tend to over-react when there is a shock or a slight depression, hence, the recent recession projections”, Mrs. Adeosun said. She added that unemployment Solutions, jobs and entrepreneurship are what she intends to capitalize on while crashing interest rates.
Abuja – National Publicity Secretary of the Peoples Democratic Party (PDP), Olisa Metuh, said on Monday that it was immediate past President Goodluck Jonathan, and not President Muhammadu Buhari, who discovered the current Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Ibe Kachikwu.
Olisah Metuh
Metuh said Jonathan was preparing Kachikwu as a replacement for ex-petroleum minister, Diezani Alison-Madueke, who headed the ministry till last May.
Metuh made the claims in a Channels Television discussion programme, SunriseDaily, monitored in Abuja.
The PDP spokesman, who was reacting to the decision of Buhari to supervise the Petroleum Ministsery, said that the NNPC helmsman was not a new discovery by the president.
Metuh said that the party would closely monitor Buhari as the minister of petroleum and would not hesitate to expose any wrongdoing in the oil industry under the president.
Metuh said: The PDP under Jonathan discovered the incumbent group managing director of Nigerian National Petroleum Corporation (NNPC), over two years ago.
“Ibe Kachikwu was supposed to be Minister of Petroleum under PDP two years ago; he is not a new discovery.
“If the President handles the petroleum industry and does anything dishonest, we will expose him and tell Nigerians,” Metuh said.”
The publicist said that his party was committed to constructive criticism and not unnecessary opposition of every government policy.
“The style we are bringing is constructive criticisms because the essence is not about winning. It is about serving the people. We want to serve the Nigerian people – that is why we are in politics.
“When we were in government, the then opposition government (APC) did certain things that were indecent and not good for the progress or unity of our country.
“Anytime there was a terrorist attack on the country, we had lots of condemnation of the government and it made the terrorists emboldened. The insurgents were dividing us along ethnic and religious lines and the APC was promoting it.
“As an opposition party, we have decided that we will not adopt the same tactics. We have not abused Mr. President; we do not abuse his office. We limit ourselves to issues, providing alternatives and options to his policies and programmes, although we haven’t seen any yet.”
He said the PDP had no problem with the people he had chosen as his ministers, knowing fully well they those he could vouch for and where their strength and capacity lies.
But he frowned at the delay in choosing the ministers early enough to make way for the smooth running of the country.
“At this time, we are still discussing ministers as if it’s a big deal,” the PDP spokesman said.
