With the open market price of premium motor spirit (PMS) rising to N92.34, the federal government has returned to petroleum subsidy, as it insists on retaining the current price.
Fuel Subsidy
According to the petroleum product pricing regulation agency (PPPRA), the government will begin to pay N5.84 on every litre of petrol sold from April 1, 2016.
The template also revealed that on every metric tonne of PMS, the federal government will pay a subsidy of at least N7,824.84.
With a consumption level of at least 33 million litres per day, the federal government would pay N5.782 billion on subsidies in April alone – if the template remains unchanged.
Though the federal government never really removed subsidy, it didn’t have to pay it based on the global prices of crude oil in the first quarter of the year.
He however added that the money made by the federal government in over-recovery would be saved for a rainy day – to pay petrol subsidy, when the prices spike again.
Assuring that the pump price of petroleum products would not be increased, PPPRA said the pump price of Kerosene, which was not affected by the new template, would also remain unchanged.
In a subsequent statement by Lanre Oladele, head, corporate services at PPPRA, the agency said: “The NNPC has 41.73 per cent of the total allocation, while the rest of the oil Marketing Companies got a total allocation of 58.27 per cent.”
The statement quoted Sotonye Iyoyo, acting executive secretary of PPPRA, that the agency would retain the retail prices of N86.00 for the NNPC and N86.50 for the other marketing companies.
It added that the pump price of Household Kerosene (HHK) would also remain unchanged from what it was in the last quarter.
“Therefore, marketers are advised to ensure that there is no price distortion in their respective retail outlets,” she said.
PPPRA said it would continue to monitor the global oil market performances and make reasonable changes consistent with the newly-adopted price modulation principles.
It urged depot owners to strictly adhere to the prevailing truck-out policy made by the agency, to ensure that petroleum products get to their designated retail outlets nationwide.
The agency warned against hoarding products, saying there are no plans to raise the prices.
“PPPRA is resolutely committed to the sustenance of its reform initiatives, in order to further guarantee adequate supply of products nationwide.
“We therefore assure Nigerians of our total commitment to service delivery, in the quest to deliver on our mandate to the people of Nigeria.”
The-yet-to-abate fuel scarcity in the country assumed a dangerous dimension yesterday in Ilorin, capital of Kwara State as three gunmen opened fire on motorists queuing for petrol.
The incident happened at one of the Nigerian National Petroleum Corporation (NNPC) Filling Stations in the metropolis.
In the ensuing melee, it was gathered that the gunmen left two young men and a lady with serious injuries.
Some others on the queue as well as officials of the station were said to have scampered for safety.
The incident, according to eyewitnesses, occurred in the early hours.
It was gathered the gunmen were part of some youths who forced themselves on the station, located along Offa Garage road to manage the gates.
They were there to reduce the practice by many motorists to jump the queue in their desperate bid to get fuel.
An eyewitness said: “It was due to an argument among the boys; you know they are thugs and they have been at the gate but we don’t really know what led to the argument but we just suddenly heard the gunshots and it was later discovered that some people were seriously injured.”
The three victims, it was gathered, were rushed to a private hospital, Yusjib Industrial Medicare along the same axis.
The Chief Medical Director (CMD) of the facility Dr Yusuf Abdulraheem told newsmen the three victims were in stable conditions.
He said one of them had been taken to a laboratory where the bullets in him would be extracted.
Kwara police command’s spokesperson Ajayi Okasanmi confirmed the development.
He said one of the gunmen has been arrested, adding that a locally made pistol and some live cartridges were recovered from the suspect.
The manager of the station promised to call back.
He however did not respond to text messages from reporters.
World oil prices rose for a third straight day today with traders brushing aside news of a rocket attack by jihadists on a gas plant in OPEC energy producer Algeria, the AFP reported.
The development sees the price of Brent crude, against which Nigeria’s oil is priced, rise to $42.29 dollars, $4.29 higher than the country’s proposed benchmark of $38 for the 2016 budget.
According to the AFP, with confidence growing that the world’s biggest crude producers will hammer out a deal to curb output, investors piled back into the commodity after they toyed with 13-year lows last month.
Qatar’s energy minister, Mohammed al-Sada, confirmed this week that exporters from within and outside the OPEC cartel will meet April 17 in Doha, stoking hopes of an agreement to ease a global supply glut.
Around 1215 GMT on Friday, United States benchmark West Texas Intermediate for delivery in April was up 72 cents at $40.92 a barrel.
Brent North Sea crude for May delivery won 75 cents to $42.29 a barrel compared with Thursday’s close.
WTI had advanced 4.5 per cent Thursday, closing above $40 for the first time since the start of December.
Buying in recent days has been fuelled also by the Federal Reserve, which on Wednesday halved its forecast for US interest rate hikes this year.
The outlook, citing a global slowdown and market turmoil, sent the dollar plunging, which in turn makes oil cheaper for holders of rival currencies.
“The expectation that the leading OPEC oil producing countries and Russia will agree on binding production caps on 17 April is lending prices additional buoyancy,” said Commerzbank analyst Carsten Fritsch.
Elsewhere Friday, jihadists launched a rocket attack on an Algerian gas plant jointly operated by foreign companies, three years after a deadly hostage crisis at another facility in the Sahara desert.
There were no reports of casualties in Friday’s attack, companies and workers at the site said.
Algeria is one of the world’s largest exporters of natural gas, with revenue from fossil fuels accounting for 95 per cent of its exports.
Many filling stations across the country on Friday shunned the Federal Government’s directive on the new pump price for petrol as they continued to sell the product at either the old regulated price of N87 per litre or above it.
The Petroleum Product Pricing Regulatory Agency on Tuesday announced that retail filling stations belonging to the Nigerian National Petroleum Corporation would from Friday, January 1, 2016, sell petrol at N86 per litre, while other oil marketers would sell the product at N86.5 per litre.
Fuel Subsidy
The PPPRA Executive Secretary, Mr. Farouk Ahmed, had stated that the reduction in the price of the commodity was due to an implementation of the revised components of the petroleum products pricing template for PMS and House Hold Kerosene.
But findings by our correspondents on Friday revealed that many petrol stations in Abuja and neighbouring Kaduna and Nasarawa states as well as others in the South West, South South, North West, North Central and South East had yet to comply with the directive.
Investigations also revealed that even NNPC stations were still selling the product at the old price. For instance, an NNPC mega station located in Kubwa, a popular satellite town in Abuja, displayed N87 as the selling price as against the stipulated N86 price when one of our correspondents visited the outlet on Friday afternoon.
Although this particular station was not dispensing at the time of the visit, one of its workers, who spoke on the condition of anonymity, said the decision to sell the product for N87 per litre was because other outlets in the area were still selling petrol at the old price.
The worker was not far from the truth as all the petrol stations in Kubwa were selling the product at N87.
The Oando filling station opposite the NNPC in Kubwa was also selling for N87 per litre. Similarly, Total filling station on Arab Road and another popular outlet close to the Kubwa market sold petrol at the old N87 per litre price.
In Zuba and Suleja, satellite towns on the outskirts of Abuja while heading to Kaduna, our correspondent observed that virtually all the stations in the area dispensed the product at N87.
In Nyanya, Mararaba and Keffi, all in Nasarawa State, the price of petrol was still N87 per litre on Friday in most petrol stations visited.
However, the NNPC mega station and NIPCO on the Abuja/Zuba Expressway complied with the new pricing regime, as both stations sold the product at N86 and N86.5 per litre respectively.
An official of the Department of Petroleum Resources stated that the petrol stations had no choice but to comply with the directive.
“Some of them may get away with it today, but it will surely be short-lived as monitoring by the DPR will kick off anytime from now, because it is a Federal Government directive and it must be upheld,” the official who spoke on the condition of anonymity noted.
In Lagos State, the situation was not different as a popular filling station in Abule Egba area of Lagos sold petrol for N87 per litre.
An attendant at the filling station, who declined to give her name, told one of our correspondents that she was directed by her boss to sell the product at N87 per litre. But about three filling stations located not too far away from there were not open for business.
While majority of the filling stations around Ojodu in Lagos State were not selling fuel, the Conoil located around Toll Gate on the Lagos – Ibadan Expressway was selling petrol for N87 per litre, with a relatively long queue.
Also, at an NNPC mega station in Ikeja, Lagos State, petrol was sold for N87 despite the Federal Government’s directive.
An official of the station, who spoke on condition of anonymity, said he was awaiting a new directive from the President in 2016 before selling at the stipulated N86 per litre.
He said, “We are still selling at N87 here. I have not heard anything from the President this year, asking, “Have you heard from him?”
In major cities in Ogun State, one of our correspondents observed that many filling stations were selling a litre of petrol for between N100 and N130.
In Abeokuta, the state capital, major marketers like Conoil, Total and Forte were not opened to customers because they claimed that they did not have stock. But an NNPC mega station on Abiola Way in the state capital sold petrol for N86 per litre.
But other independent marketers who were dispensing the product sold to motorists and other buyers at between N100 and N130 per litre.
At Ebenfem filling station at Ita Eko, Abeokuta, motorists bought petrol for N120 per litre.
The same scenario obtained at Supreme Petrol Station just after the Mechanic Village along Abeokuta-Lagos Expressway as a litre of petrol was sold at N110.
In Sango-Ota axis, independent marketers dispensed a litre of petrol for between N100 and N130. At NNPC franchise filling stations at Oju Ore and Koro Otun respectively, they dispensed a litre of petrol for N100 and N120 respectively.
At EMIMP filling station and Oando filling station along Sango-Idiroko Road, they sold a litre for N100 and N130 respectively.
However, MRS filling stations in Abeokuta and Sagamu still sold the product for N87 per litre.
In Osun State, marketers have yet to comply with the directive. In Osogbo, the state capital, one of our correspondents observed that petrol was not available for sale in most filling stations in the city as some fuel attendants said they could not adjust to the new price because they bought at higher price from the private depots.
A former Treasurer, Independent Petroleum Marketers Association of Nigeria, Western Zone, Mr. Shina Amoo, when contacted by one of our correspondents, said independent marketers could not comply with the directive on petrol price because they bought far higher than the approved price.
He said, “I bought at N102 per litre yesterday (Thursday) and later I bought at N94.5 per litre. So you don’t expect anybody who bought at those prices to sell a litre for N86, it is not possible.
“The price will continue to come down as the supply increases. The government will not need to force anybody to reduce the price; the forces of demand and supply will determine the price.”
In Ondo State, only the NNPC mega stations and a few major marketers complied with the directive, while many independent marketers were still selling the product for N120 per litre. The situation was the same in Bayelsa State where attendants at filling stations on the popular Swali Road in Yenagoa displayed N87 per litre for the price of petrol on their pumps, but actually sold the product at N140 per litre. But NNPC mega stations in the state capital complied with the Federal Government’s directive.
Independent marketers in Niger, Kwara and Kogi states have yet to adjust the pump price to the new approved rate as they were still dispensing at the old price. The Niger State Coordinator, DPR, Mr. Abdullahi Jankara, told one of our correspondents that he had not received any letter from the Federal Government on the new pump price of petrol.
Asked why its members have yet to comply with the new directive, the Kwara State Chairman, IPMAN, Mr. Olanrewaju Okanlawon, said they were still buying petrol at the old rate of N66.70 plus other associated costs.
The few filling stations which opened for business in Akwa Ibom and Cross River states sold petrol for N130 per litre.
The situation was worse in Enugu State as independent marketers sold the product for between N150 and N160 per litre in most filling stations in the state. But a long queue was noticed at an NNPC mega station which sold it for N87.
In Plateau State, most marketers claimed that they were not aware of the new pump price. The marketers, who declined to mention their names, said they had not received any clear directive on the new pricing system. In major cities such as Gboko, Kastina-Ala, Oturpko and Ukum in Benue State, the product was sold for N125, N150 and N165 respectively.
In Oyo State, the situation remained the same as it was before January 1. The price of a litre of petrol varied from one filling station to the other but none of them sold at the government regulated price.
Before the New Year Day, few filling stations had the product to sell. Majority of those who had the product were the independent marketers, who were selling a litre for prices ranging from between N125 and N140.
On Friday, from Mokola area of Ibadan to Owode, along Ibadan/Abeokuta Expressway, a few stations had the product and they were adamant to sell above the new government pump price, hinging the decision on the inflated rate at which they bought the product in Lagos.
The situation was the same in Bere, Oje, Oritamerin, Oke-Ado and Ring Road areas of the city.
In Edo State, apart from the NNPC mega filling station on Sapele Road, which sold petrol at N86 per litre, many of the major and independent marketers sold above the official pump price of N86.50. For instance, at Asolyn filling station opposite the state civil service secretariat on Sapele Road and Total filling station on Airport Road, Benin, a litre of petrol was sold for N130.
Petrol was sold at the rate of N130 per litre at the Total filling station in the same area.
Also on Airport Road, independent marketers like Otopec, VOE and Jeroviedd fixed their pump prices at N135, N130 and N120 per litre, respectively.
One of our correspondents noted in Asaba, Warri, Ogwashi-Uku, Ughelli and Ibusa – all in Delta State that the product was sold for between N130 and N150 per litre despite the Federal Government’s directive.
In some filling stations where the product was sold for N130 per litre in the state, attendants collected minimum of N50 bribe from motorists before selling to them.
Meanwhile, the PPPRA has vowed to sanction any filling station found flouting government’s directive.
The Assistant General Manager/Head of Operations, PPPRA, Mr. Victor Shidok, threatened that the agency would withdraw licences of defaulters.
Shidok, who led a team from the PPPRA to monitor the level of compliance with the directive in Abuja, warned that the government would not tolerate any deviation from the new directive.
He said the monitoring, which was simultaneously going on across the country, was done in conjunction with the DPR to ensure that Nigerians were not shortchanged.
Shidok stated that there was 100 per cent compliance as at press time in the city centre, but noted the team had yet to reach the outskirts where he feared that there might be challenges with regard to total compliance.
He said, “The challenge may likely be in the outskirts. All those we have visited say they have received directive from their head offices. We are in touch with the leadership of oil marketers in the country. This is a nationwide exercise.”
The Special Assistant Public Communications and New Media to Governor Ayo Fayose of Ekiti State, Lere Olayinka has stressed that Petrol pump price will sell above N100/litre in reality.
Fuel Scarcity
The federal government had said that pump price of petrol will sell at N85 or N86 per litre starting from January.
This was disclosed by the Minister of State for Petroleum , Dr Ibe Kachikwu on Friday in Port Harcourt.
Reacting to the plan, the governor’s aide said Nigerians are presently buying petrol more than the actual price, adding that there is no way any businessman would sell at the expected price after the government has succeeded in removing subsidy, which means the decision of the pump price has been handed over to the market forces.
Olayinka said “TECHNICAL, Petrol will sell at N85/litre. Realistically, Petrol will sell above N100/litre.
“Even at the present pump price of N87, Nigerians have been buying petrol at between N130 and N300 per litre in the last two months.
“To me, this announcement by the FG that petrol will sell at N85 per litre from January 1, 2016 is a deceit taken too far.
“When you remove SUBSIDY, it means you have handed the determination of Petrol price to the market forces – what you buy is what you sell. Therefore, fixing Petrol price after “Removing Subsidy” is a waste of time.
“By the way,what happened to Fashola’s position of last year that petrol should sell at N50/litre when Crude oil price was $66.27 per barrel?
“Now that Crude oil is less than $40 per barrel, shouldn’t petrol price come down to at least N35/litre?”
PORT HARCOURT – The Federal government is set to reduce the pump price of petrol to about 85 or 86 naira per litre.
Minister of State for Petroleum , Dr Ibe Kachikwu who disclosed this during a tour of the Port Harcourt refinery on Christmas Day expressed hope that the new price regime may come on stream January next year.
He said efforts were on to get the refinery to achieve 60 percent production capacity and to supply about 11 million liters of petrol daily.
“If you look at the new PPPRA template that we developed and which I just signed off two days ago, when it is announced you will find out that for now ,and I use the emphatic word of the President for now, the price of the refined product will actually be lower than 87 naira, It will be 85. We will probably announce that in January if the prices hold.
Fuel Subsidy
“like I said, we have done a modulation calculation and it is showing us below N87. I imagine that if PPPRA publishes it today, it will become effective immediately. But the 1st of January that is when we are looking at.”
“What that does for you is that its modulating. If it goes up you move up, if it comes down you come down. So we take away the fact of having to go find funds to pay for these subsidies that we cannot afford.
“More importantly we try to be as close to the pump price that we have now as possible,” he said.
Kachikwu who is also the Group Managing Director, Nigerian National Petroleum Corporation, NNPC said government had resolved to scrap oil subsidy because of alleged fraud around it.
“So for the first time people will understand that the pricing modulation I was talking about is not a gimmick. It is for real. The objective is that we cannot afford to continue to subsidize .We can’t even understand where those subsidies were going to. There is a lot of fraud elements in it so we need to cut that of.
The second is the earning capacity of the Federal Government is deteriorating by the day with lower prices of crude “, he said.
He also said there was improvement in security of pipelines with the engagement of private contractors by the federal government.
As fuel scarcity bites harder in Hadejia, Jigawa, the price of a litre of petrol has risen to N300. Many petrol stations in Hadejia had no product to sell at the time of this report. Petro is only available at black markets where it sold at N300 per litre, well above the N87 approved pump price.
Fuel Subsidy
The situation has led to drastic drop in the number of commercial buses on roads in the area. Malam Ibrahim Hassan, a commercial bus driver, said that he was experiencing difficulties getting petrol to buy. Hassan said that the situation was affecting his daily revenue as “I am spending much on fuel due to the lingering scarcity. “
The driver said that he had resorted to carrying more passengers to make up for the expenses on fuel. “I am overloading passengers to avoid incurring losses. “ Malam Baballe Haruna, the Treasurer, National Union of Road Transport Workers (NURTW) in the area, condemned the non-availability of petrol in the area.
Haruna said that the trend had exposed members of the union to hardships, adding that most of them had parked their vehicles. He appealed to the Federal Government to adopt practical measures to end scarcity of petroleum products in the country.
The fixing of petroleum products’ prices is denying the country investment in the downstream sector of the oil and gas industry and depriving Nigerians certain benefits from the country’s petroleum resources, industry stakeholders said on Thursday.
Managing Director of the NNPC, Mr. Emmanuel Kachikwu
The Federal Government currently regulates the prices of Premium Motor Spirit, otherwise known as petrol, and kerosene, and subsidises their prices to enable Nigerians to get the products at the regulated prices.
The regulated price of petrol is currently N87 per litre while that of kerosene is N50 per litre. But the products are sold above the regulated prices in parts of the country, despite government’s subsidy.
The Group Managing Director, Nigerian National Petroleum Corporation, Dr. Emmanuel Kachikwu, in his address at the National Association of Energy Correspondents’ conference in Lagos, said, “Subsidy creates distortions in government revenue distribution as a result of round-tripping and unnecessary carry-over of expenditures every year in a way that is difficult for government to control or sustain.”
He noted that subsidy accounted for 20 per cent of the Federal Government budget in 2013.
Kachikwu, who was represented by the acting Managing Director, National Engineering and Technical Company Ltd, Mrs. Bola Ashafa, said, “Deregulation policy is essential to the transformation and growth of the downstream sector of the oil and gas industry.
“Speedy implementation of this policy in Nigeria would go a long way in encouraging inflow of private sector and international investment; ensure that Nigerians derive fair deal from the abundant petroleum resources in the country through fair product prices for consumers and full cost recovery and reasonable margins for operators.”
He said the implementation of the policy would entrench efficiency in product usage; product availability and effective competition among investors, hence putting an end to product shortage.
He, however, said critical enablers such as security of the product and distribution infrastructure must be assured to guarantee the availability of the petroleum products at affordable prices.
The NNPC boss said, “We are fully committed to reforming the existing refineries and boosting domestic petroleum product supply. Currently all the refineries have been re-streamed but are yet to attain optimal capacity.
“Removal of price control mechanisms is deemed imperative to ensure full growth of the sub-sector by allowing private stakeholders to complement the government efforts in developing the industry.”
He said the NNPC would continue to maintain stability in the supply and distribution of petroleum products nationwide to avoid energy crisis.
According to him, the corporation has enough stock of petrol to service the country for 25 days at a national consumption rate of about 40 million litres per day.
“Unfortunately, the stock is not immediately available across the 21 depots in view of the challenges facing the distribution pipelines facilities,” he said.
The Chairman and Managing Director, Mobil Oil Nigeria Plc, Mr. Tunji Oyebanji, said, “What we are talking about is deregulation of the prices; for the prices to be determined by market forces,” but that “there has to be government regulation in terms of standard and quality.”
He noted that there was a time in the country where prices were not fixed by the government.
According to Oyebanji, the lack of full deregulation generates uncompetitive climate and lack of investment and innovation.
He said, “We are looking for a sustainable industry where pricing is liberalised, leading to steady supply, increased profitability, large-scale investment in refineries, increased competition, and an industry where technology plays a role. But currently there is no incentive.”
He said the government had yet to pay them their subsidy arrears.
On his part, the Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, decried what be called the absence of clear policy direction from the government with respect to the oil and gas industry.
According to him, there are people who want to invest in the industry but who are being discouraged by lack of a clear policy direction.
“It is important that we quickly deregulate the downstream sector to attract investment,” Yusuf said.
The Managing Director, NIPCO Plc, Mr. Venkataraman Venkatapathy, said the move from a regulated market to deregulation should be done in a phased manner, adding, “We must take a holistic approach rather than one pre-determined solution.”
The President, Petroleum and Natural Gas Senior Staff Association of Nigeria, Comrade Francis Johnson, said, “As a labour union, we are not averse to deregulation but that the focus of deregulation should be based on local production rather than importation.
Nigeria earned N2.512 trillion from the export of petroleum products in three months, between April and June 2015, according to data released Wednesday, by the National Bureau of Statistics, NBS.
Fuel Subsidy
The NBS, in its Foreign Trade Statistics for the Second Quarter of 2015, also stated that Nigeria recorded total merchandise trade of N4.372 trillion and a trade surplus of N1.4 trillion in the month under review.
It is instructive to noted that the amount the country earned from petroleum products sale in the second quarter of 2015, was 56.8 per cent of the country’s N4.49 trillion 2015 budget.
Also the amount earned from the export of petroleum products accounted for 57.5 per cent of Nigeria’s total merchandise trade and 87.3 per cent of total export.
In its classification of petroleum products export in the period under review, the NBS data revealed that the country exported petroleum oils and oils obtained from bituminous minerals and crude oil valued at N2.121 trillion; liquefied natural gas valued at N260.7 billion, while liquefied petroleum gas and other gaseous hydrocarbons valued at N66.41 billion was also exported.
Others are: liquefied propane — N43.88 billion, partially refined oil including crude oil having gone primary refinement —N13.577 billion and liquefied butanes — N6.15 billion.
Specifically , giving a breakdown of Nigeria’s merchandise trade, the NBS stated that Nigeria’s total export stood at N2.879 trillion, while total import stood at N1.49 trillion, thereby, leading to a trade surplus of N1.39 trillion.
The value of total merchandise trade, according to the NBS, was 0.5 per cent less than the total of ₦4.393 trillion recorded in the first quarter of 2014 and 34.3 per cent or N2.287 trillion less than the amount recorded in the second quarter of 2014.
In addition, the report stated that at N2.879 trillion, Nigeria’s total export appreciated by 8.0 per cent or N214.1 billion when compared with the value of exports in the first quarter of 2015, while it represented a decline of N1.8 trillion or 38.5 per cent when compared with total exports of N4.682 trillion recorded in the second quarter of 2014.
Continuing, the report stated that, “Other products exported by Nigeria include vehicles, aircraft and parts thereof; vessels among others at ₦250.6 billion or 8.7 per cent; Vegetable Products at ₦36.7 billion or 1.3 per cent, and Prepared foodstuffs; beverages, spirits and vinegar; tobacco at ₦24.6 billion or 0.9 per cent of the totals respectively.”
Furthermore, the report stated that Nigeria’s major export destination was India, with export trade of N406.1 billion or 14.1 per cent of total export.
Other top export destinations in the period under review were: Spain, Netherlands, South Africa and Brazil with ₦297.4 billion or 10.3 per cent, ₦296.3 billion or 10.3 per cent, ₦240.9 billion or 8.4 per cent and ₦147.8 billion or 5.1 per cent of the total exports respectively.
In the area of imports, the report said, “The value of Nigeria’s imports stood at ₦1.493 trillion during second quarter 2015, a decrease of 13.6 per cent from the value of ₦1.728 trillion recorded in the preceding quarter.
“Year-on-year, analysis showed that import trade was lower by ₦484.0 billion or 24.5 per cent.
“Nigeria imported goods mostly from China, United States, India, Belgium and Netherlands, which respectively accounted for ₦336.5 billion or 22.5 per cent, ₦143.6 billion or 9.6 per cent, ₦115.4billion or 7.7 per cent, ₦83.4 billion or 5.6 per cent and ₦ 80.9 billion or 5.4 per cent of the total value of goods imported during the quarter.”
LAGOS—The New Port Harcourt Refining Company, PHRC 2, is now ready for the production of more premium motor spirit, PMS, popularly called petrol, and will reduce fuel import by 40 per cent when fully operational.
Fuel Subsidy
When the FCCUs are re-streamed, the refinery will be working at 95 per cent of its 150,000 barrels per day capacity, it is expected that petrol importation will reduce.
This was disclosed to journalists, weekend, by Chrome Oil Services, a member of the Chrome Group, one of the three contractors, handling the phased rehabilitation of the refinery.
Recall that Vanguard Sweetcrude had exclusively reported last week that the four Nigerian refineries are weak in petrol production and high in fuel oils because the FCCUs were still undergoing rehabilitation.
The Project Manager, Chrome Oil Services, Mr. Bombey Adigbara, said: “The job on the FCCUs is about 98 percent completed and by next weekend, we will hand over and the FCCUs will be re-streamed and the refinery will be working at about 95 percent of its throughput.
“Three companies participated in this phased works and COS is the first, and we are still doing the work. At the moment, the refinery has started preliminary production, which means that it is Unit 1 that is producing.
“The Unit 3 is being handled by Chrome, and by the end of next week, we will hand over the plant and the FCCs will be streamed. When this is done, we will start experiencing high level of PMS production in Nigeria. So, all the critical jobs are being done by us.”
He disclosed that there are three major contractors handling the ongoing phased rehabilitation of PHRC, namely Chrome, DKJ/ITC, and DBM.
According to him, “The FCC is 98 per cent completed. The FCC has a lot of critical components and it is also vendor specific, so you have to have a lot of experience to work in that place. We have achieved 98 per cent and when it comes up you will have a reduction in the importation of PMS.”
Chrome capacity
Adigbara also dismissed widespread speculations about the capacity of Chrome Oil Services to execute refinery TAM, saying before the 1999/2000 TAM for PHRC, Chrome had carried out a number of works for the Kaduna and Warri refineries as well as the Indorama Elema Petrochemical Company.
Besides, he noted, Chrome had remained at PHRC since the 2000 TAM till date, offering intervention services, adding that in 2015 alone, Chrome had dome more than 50 jobs in the refinery to keep it running.
Feedstock/swap agreements
Also speaking, Executive Chairman, Chrome Group, Sir Emeka Offor, noted that the problem with the refineries is not just about TAM, which should be done every two years, but also with the lack of crude supply following government’s swap and offshore processing agreement, OPA.
According to him, “the issue with the refinery is not only TAM but lack of feedstock to sustain their operations. The cost of TAM is very high and if you finish TAM and no feedstock then it is not economical.”
He also added that pipelines vandalism came to compound the issues, saying: “Federal Government and NNPC must ensure adequate supervision of the pipelines to reduce vandalism to the barest levels.”
The Department of Petroleum Resources (DPR) on Tuesday threatened to clamped down indefinitely any petrol filling station engaged in hoarding.
Mrs Chioma Njoku, Operations’ Controller for Lagos Zone of the agency, made the assertion on a telephone interview with the News Agency of Nigeria (NAN) in Lagos.
Njoku said that the agency’s surveillance teams would clamp down on filling stations hoarding petrol or selling above the approved rate of N87 per liter.
According to her, the department has been inundated with complaints from the public on the arbitrarily fixing of petrol prices above the government approved rate.
She said such actions of the marketers negated the rules of engagement, stressing that DPR would sanction any outlet that indulged in illegal acts.
Njoku also charged marketers of petroleum products in Lagos to ensure that the products supply and distribution to the public met the recommended specifications.
She said that DPR had sanctioned some erring marketers caught hoarding petrol and engaging in other sharp practices.
“We have embarked on a monitoring exercise across Lagos since Monday in view of the current scarcity and discovered that some marketers were capitalising on the situation to make huge illegal profits.
“While some filling stations were under-dispensing, others were found hoarding products.
“We have compelled some of the marketers to begin selling of products immediately and sealed those that failed to comply,” she said.
Nkoju said the DPR would have sanctioned many more stations that were caught with sharp practices but decided to warn them due to the situation at hand.
She said also that the current scarcity was artificial and that the DPR would continue to ensure compliance at the filling stations and depots across the country.
“A lot of filling stations is hoarding petrol. We know we have enough petrol at the depots to go round but we found that some are hoarding.
“This exercise will continue till normalcy returns to the system and the DPR is ready to sanction more marketers and seal more depots that are found wanting,” she said.
Minister of Petroleum Resources, Deizani Alison-Madueke, has said the Federal Government has approved the reduction of the pump price of premium Motor Spirit, otherwise known as petrol, by N10, due to the fall in the global price of crude oil.
In effect, PMS will now sell for N87 per litre.
Alison-Madueke directed all fuel stations and the regulatory authorities to effect the change of price immediately.
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