The year 2012 has been a mixed grilled for Nigeria in its energy sector. This is so because the experience during the last year under review has been a combination of the “good” and the “bad”, though the bad seems to be dominating the “good” therefore having remarkable impact on the nation’s economy.
This impact, naturally tilt this piece to reflect on the “bad” in the sector.
Nigerians woke up on January 2012 to the ugly reality of the removal of fuel subsidy which led to the astronomical increase in pump price of petrol from N65 per litre to N140 per litre. This sparked a series of protest across the country which crippled economic activites thus forcing the federal government to resort to partial deregulation by pegging the pump price of petrol at N97 per litre. This, off course, obtains in some parts of the urban areas with close monitoring as in rural areas and most parts of the rural parts of the country that are not closely monitored sell between N120 to N160 per litre.
No doubt the oil and gas aspect of the energy sector which has shrouded in darkness was to some extent unshrouded by the various probe reports from the Nuhu Ribadu’s to Dotun Suleman’s and Kalu Idika’s that were set up in the wake of the protests that greeted the subsidy removal.
There have, however, been spirally controversies clogging the implementation of these probe reports inclusive of the one carried out by the Farouk Lawan’s House of Representatives ad hock Committee on subsidy payment.
The reports by Farouk and Ribadu generated heated arguments for and against due to the revelations that emanated from them. While the Farouk’s Committee report was tainted by the $620,000 bribery alleged by Femi Otedola, the Ribadu’s committee report though openly challenged by two members of the committee who accused him of not doing a thorough job made open some starkling revelation that left Nigerians dumbfounded.
Also, the Petroleum Industry Bill (PIB) that was compiled by Senator Udo Udoma’s committee before being sent to the National Assembly was strongly opposed by the Northern Senators and International Oil Companies. These were the same factors that resulted to abortion of previous PIBs. Recent reports have it that the House of Representatives has postponed the hearing on this controversial bill to between the third and the fourth week of January 2013.
The indictment and prosecution of several petroleum marketers in respect of fuel subsidy had the resulted effect of the perpetual scarcity of petroleum products in many cities across the country as these marketers who cushion government’s importation were not importing. Nigerians, inadvertently bear the brunt as government’s importation alone cannot meet up public demands.
Also of note is statement issued by Nigerian Association of Petroleum Explorationists (NAPE) at its Annual International Conference and Exhibition in Lagos recently that the nation’s potential of generating about 2.26 metric tones of Liquefied Petroleum Gas (LPG) annually will never be achieved unless issues of infrastructure deficit and lack of access to finance of players in the sector were addressed.
The statement, said the attainment of the nation’s vision 20:20 objective can only be achieved with stable power supply with gas production playing important role.
The statement presented by Mr. Mustapha Jibrin further noted that recent discoveries in other parts of Africa was negatively affecting Nigeria’s natural gas potential and its competiveness.
“The competitiveness of Nigeria’s natural gas and the numerous opportunities… it would be impacted by recent discoveries of large reserves of gas in other parts of Africa, especially offshore East Africa, as well as huge exploitation of shale gas in different parts of the world,” the statement reads partly. The country reveals a poor state of services amidst a monthly outrageous bills. This is inspite of all the news about the implementation of power sector reform such as the increase in electricity tariff, privatisation of generation and distribution companies as well as the management takeover of the Transmission Company of Nigeria by Manitoba, a Canadian firm (a deal which has a lot of controversies). Earlier this month, it was reported that the country was still generating about 4,300MW of electricity. Significant energy is still lost to weak transmission lines coupled with incidence of system collapse which is still prevalent.
Some believe that if the privatisation timetable was followed to the letter, we would have been singing a new song as new owners of the generation, transmission and distribution companies would have commenced operation in earnest leading to a break through in the sector, and this reform for some Nigerians is tied to the old order.
Therefore, their hope dwindled with the Minister of Petroleum, Mrs Diezani Alison Madueke represented by Mr Austin Olorunshola, a director in the Department of Petroleum Resources (DPR) at the same occasion corroborated this view as she said Nigeria was coming under extreme competitive pressure from African neighbour.
According to her, the oil and gas, discovery in neigbouring African countries and shale gas discovery globally was a major challenge to the nation’s oil and gas industry.
She also disclosed that the lack of discovery of oil in commercial quantity in the Chad basin was a cause of concern for the sector but allayed the fears saying “the lack of activity in the Chad basin is not a signal of lack of prospect.
The low level of production was also attributed to security challenges experienced in some parts of the country and pipeline vandalism.
President Goodluck Jonathan in his Christmas Message urged Nigerians to continue to trust in his unwavering commitment to fully achieve the objectives of his administration’s agenda for National Transformation for the benefit of all Nigerians. It is hoped that as we enter 2013, the president will have the political will and determination to deliver positive changes as he has promised and make the new year much better in all ramification, especially in the energy sector.
MOMAN Seeks Representation In PIA Implementation Committee
The Major Oil Marketers Association of Nigeria, MOMAN, has called on the federal government to also appoint stakeholders in the sector to be part of the PIA implementation committee.
The call was made while presenting its newly appointed Chairman, Olumide Adeosun, CEO, Ardova Plc to newsmen, last week.
Adeosun while presenting his agenda for the Association, said inclusion of stakeholders in the PIA implementation committee, would make for more robust and balanced deliberation as the Act begins its six months gestation period.
“My appointment as Chairman of our respected association commences just as the Petroleum Industry Act has been encoded into law, marking the beginning of a new era for the downstream sector. As an association, this means that we must be at the forefront of unravelling the opportunities that come with operating in the free-market structures that have been created by the PIA, whilst continually advocating for changes that positively impact our industry and the Nigerian economy at large.
“I assure you that MOMAN will continue to be at the fore of both private and public partnership with the government in terms of discussing policies that would move the downstream forward. We enjoin the federal government to also include stakeholders in the sector, including the downstream which we represent, in the implementation committee of the PIA as this would give us the opportunity to make our input,” he said.
Adeosun succeeds Mr. Tunji Oyebanji, CEO, 11 Plc, who was Chairman from 2019-2021. His tenure as Chairman of the Association is with effect from September 01, 2021.
He enjoined the government to move the downstream sector towards full deregulation.
“I feel very privileged for the opportunity to serve as the Chairman of MOMAN in such an exciting time for our industry.
“As a collective, we are at the cusp of new beginnings for the sector and I envisage that as we move towards less price-controlled reality, our journey will make for interesting times,” he said.
His tenure which commenced on September 01, 2021, will run for two years, concluding in September of 2023.
“Making the transition to a fully competitive pricing oriented downstream sector will require the collective engagement and resolve of all stakeholders. I assure you that MOMAN will continue to be at the forefront in bridging the Government and private sector in ensuring that Nigeria has a viable energy sector. We will continue sustained engagement and the creation of initiatives that will make the implementation of this law a shared success for all concerned parties.”
He said the world is changing rapidly and that the oil and gas industry has been proven to be one of the most exposed to the winds of this change.
“The breakout of the Covid-19 pandemic and the ensuing measures designed to curb its spread – lockdowns and work from home – have shaped a new reality that challenges our operating structures. Also, this period of restrained movements has seen much of the world accelerate their drive towards zero or near zero utilisation of hydrocarbon-based energy sources. A clear indication that the days of hydrocarbons might be fewer than we have projected.
“We must adapt and evolve to prevent working wide-eyed into extinction. The gains to be had from operating in a PIA reality must be channeled towards pivoting the way we operate. This is the only way we can remain globally competitive. Our opportunity to make a first step towards this evolution will be found in Liquefied Petroleum Gas (LPG). The Federal Government’s push to increase nationwide usage of gas is commendable and is an initiative we should all support and take advantage of. The benefits to expanding our collective capacity in retailing gas extends beyond immediate additions to our bottom-line, as the impact on our environment, our communities and the larger economy make for a better future for us all,” he said.
Oil Marketers Push For Subsidy Removal Within Six Months
Major Oil Marketers Association of Nigeria, MOMAN, has called for the full deregulation of the downstream sector of the petroleum industry within six months in line with the provisions of the Petroleum Industry Act (PIA).
Addressing the press yesterday, the new Chairman of MOMAN, Mr. Olumide Adeosun, disclosed that the association has made its position on the issue known to the Federal Government through a letter to the Minister of State for Petroleum Resources.
He noted that the group expects a free, fair and competitive downstream sector, stressing that Nigeria has the potential to become Africa’s energy hub if the PIA is properly implemented.
He harped on the need for the PIA implementation committee to work with industry practitioners and operators to ensure that there is no disconnect between the policy provisions and actual practice.
Adeosun stated: “Making the transition to a fully competitive pricing oriented downstream sector will require the collective engagement and resolve of all stakeholders. I assure you that MOMAN will continue to be at the forefront in bridging the government and the private sector in ensuring that Nigeria has a viable energy sector.
“We will continue to sustain the engagement and the creation of initiatives that will make the implementation of this law a shared success for all concerned parties.”
Adeosun, who is the CEO of Ardova Plc (formerly Forte Oil), pointed out that with the PIA, “a new era has begun and we will work hard to make certain that the benefits of the liberalised downstream yields the desired effect for our business and the Nigerian economy.
“I believe that Nigeria can and will become the energy hub of Africa. MOMAN plays a very important role in achieving this vision in the downstream sector because no singular company makes a flourishing sector.”
Fuel Scarcity Hits Imo
Long queues surfaced at several filling stations in the heartland city of Owerri, Imo State capital on Saturday.
This is as some filling stations were selling petrol between N250 to N300 per litre.
According to newsmen, many petrol stations in the town were still under lock and key since Thursday when President Muhammadu Buhari visited the South-East state to commission a number of projects.
A trip from Akwakuma to Ware House junction, which usually costs N50, now goes for N150, while World Bank to Control junction that usually costs N50 now goes for N150.
A motorist, Emaka Opara, lamented the situation and urged the government to find a lasting solution to the problem of fuel scarcity.
“The government should find a lasting solution to this particular issue because we can’t keep on going this way every time,’’ she said.
At the NNPC filling station at Onitsha Road and few others, motorists queued to buy fuel.
The scarcity has caused untold hardship to residents of the state.
The same scenario played out at the Amakohia area as most petrol stations were closed and the few were selling as high as N300 per litre.
One of the salesmen at the Mobile filling station Egbu road explained that some of the filling stations had the product but had been instructed not to sell.
“Though some of us do not have, others prefer to sell to black marketers since they would make more profit,” he said.
Recall that filling Stations operating in Owerri had earlier shut down their businesses to protest the refusal of payment of compensation to one of their members whose filling station was damaged by former Governor Rochas Okorocha’s administration.
Their action was based on a court judgment they obtained that the state government should pay compensation to their member. But the state government said it has appealed the judgment.
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