The Minister of State for Petroleum Resources, Dr Ibe Kachikwu has reiterated Federal Government’s resolve to reduce importation of petroleum products from the present 95 per cent to 60 per cent by 2018.
Kachikwu stated this at the Rainoil 20th Anniversary Lecture organised by the company in Lagos last Wednesday.
The theme of the anniversary was: “The Nigerian Oil and Gas Industry: Opportunities, Challenges and Prospects of the Downstream Sector”.
The minister of state said that with the proposed construction of modular refineries in the Niger Delta and more investments in the sector, the importation of refined products would be reduced to 60 per cent by 2018.
According to him, the country will start exporting refined products with the commencement of Dangote Refinery in 2019.
“The nation is at the turning point where the downstream industry is more critical than ever and will drive the economy.
“Currently, the NNPC imports over 95 per cent of petroleum products owing to challenges being faced by marketers in accessing Foreign Exchange.
“After 20 years in this industry, I have seen the industry go through challenges but regardless of all that, we are optimistic that there are a lot of opportunities in the sector.
“Going by our plans presently in the industry, our importation of petroleum products will be down to 60 per cent next year and 0 per cent import by 2020.
“It is achievable as Federal Government has shown a strong will to revamping the refineries coupled with the plan to bring about 20,000 barrels per day from modular refinery set to come on stream,” he said.
The minister was represented by the Group Executive Director/Chief Operating Officer Downstream, Nigerian National Petroleum Corporatiom (NNPC), Mr Henry Ikem-Obih.
Kachikwu said the country’s refining capacity for the first quarter of this year presently peaked at 10 million barrels of crude oil.
This he noted was against eight million and 24 million barrels recorded for the entire years of 2015 and 2016 respectively.
A former Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA), and Chairman, Board of Advisors, Mr Reginald Stanley, urged investors to collaborate and invest in developing a refinery in the country.
According to him, a single marketer cannot invest in building a refinery because refinery costs more than 250 million dollars for 20,000 barrels today.
“Refinery is not going to work with the present structure of management.
“This is a very tough business and should not be under government management in order to achieve its purpose.
“Today, refineries are such that you must be extremely efficient, because it’s a tough business and it is only the toughest that will survive, and interested investors in modular refineries should plan well,’’ he said.
Also speaking, the Chairman of Depot and Petroleum Products Marketers Association (DAPPMA), Mr Dapo Abiodun called for total deregulation of downstream which remains a great challenge to the development in the industry.
“The downstream business is at a verge of shut down over the huge debt log of two billion dollars owed marketers.
“We need a deregulated downstream to allow market forces drive the industry.
“Our challenges range from under-optimise facilities, forex as well as policy inconsistency.
“With the current price of crude oil in the market and the cap price set out by the Federal Government at N145 per litre, it does not encourage importation of petroleum products.
“As current landing cost of petrol is N160 per litre which makes it impossible for the marketers to continue to import.” he said
Abiodun, however, called for full deregulation of the downstream sector to give room for participation of private sector.
The Group Managing Director, Rainoil Ltd. Dr Gabriel Ogbechie, said the exit of subsidy payment without regulating the sector, had brought a lot of challenges for the downstream sector.
“But regardless of that, we are still optimistic that there are a lot of opportunities in the sector for a country of 180 million people moving around by cars.
“This is the time for us to look at the downstream and factor a way forward,’’ he said.
Osinbajo Solicits Support For FG’s Housing Scheme
Vice President Yemi Osinbajo has urged financial market experts to support the Federal Government’s efforts by developing an appropriate housing finance model that will significantly transform the housing sector on a large scale.
Osinbajo stated this on Monday when he received, on a courtesy visit to the Presidential Villa, a delegation from the Financial Markets Dealers Quotations Group (FMDQ) led by its Chief Executive Officer, Bola Onadele; who came alongside a delegation from the Independent Petroleum Producers Group.
Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, disclosed this in a statement titled ‘Let’s unlock Nigeria’s housing deficit, Osinbajo tasks financial market experts.’
Economic experts posit that the housing deficit in Nigeria is estimated between 18-22 million housing units, while the ratio of mortgage finance to GDP in the country is only 0.5 per cent, it is 31 per cent in South Africa and two per cent in Ghana and Botswana.
In his address, the Vice President said, “I like the point you made about the National Housing Blueprint. I very strongly believe that if we can unlock the conundrum in the sector, we can get things working.
“In our ESP, we have something on social housing but one of the critical issues there is how to market these houses, how we can provide the finance so that people can afford to buy them. These are houses that are in the order of about N2 million or N2.5 million.
“But there are still constraints on account of the fact that we just do not have anything like a feasible housing finance model, I think it is time for us to do so. It just looks like it has always escaped our capacity to find a real solution to the problem”.
Speaking on the possibility of having a model that will work, Osinbajo noted that “everyone recognises that we are in very challenging times. But I agree with you that the sheer range and vastness of our potentials make it seem almost intuitive that we are bound to succeed.
“I have no doubt in my mind whatsoever, that given the right mix of policy initiatives, we can get these things done. And your characterization of what needs to be done like attracting capital and sustaining it is so important because ultimately, capital will go where it is best treated.
“And if we are able to attract it (because we have the market, we have everything going for us), even in the worst of times, despite the situation, you find that there is still a great deal of interest.”
Speaking earlier, Onadele said the visit was to inform the Vice President about the transformation taking place in the FMDQ and the need for government support in growing the financial market for the benefit of Nigerians and the economy.
Nigerians Spent N2.33trn On Petrol In 13 Months – NNPC
The Nigerian National Petroleum Corporation (NNPC) on Monday said that the total revenue generated from the sale of petroleum products for the period of May 2020 to May 2021 stood at N2.35tn.
Out of this amount, the corporation disclosed, Premium Motor Spirit contributed about 99.61 per cent of the total sales with a value of N2.34tn.
A statement by the Group General Manager, Group Public Affairs Division of the Corporation, Garba-Deen Muhammad, said the figures were contained in the May 2021 edition of the NNPC Monthly Financial and Operations Report.
The statement was titled, “NNPC records crude oil, gas sales of $219.75m in May …posts N295.72bn from sale of petroleum products”
It read in part, “Total revenues generated from the sale of petroleum products for the period of May 2020 to May 2021 stood at N2.345tn where Premium Motor Spirit contributed about 99.61 per cent of the total sales with a value of N2.336 trillion.
“In terms of volume, the figure translates to a total of 2.241 billion litres of white products sold and distributed by PPMC in the month of May 2021 compared with 1.673billion litres in the month of April 2021.”
Total sales of petroleum products for the period May 2020 to May 2021 stood at 18.65 billion litres and PMS accounted for 99.69 per cent of total volume.
The corporation also recorded a total crude oil and gas export sales of $219.75m in May this year.
The $219.75m represents an increase in sales of 180.29 per cent when compared to the previous month of April this year.
The report stated that crude oil export sales contributed $181.19m (82.45 per cent) of the dollar transactions compared with $4.22m contribution in the previous month, while the export gas sales component stood at $38.56m in May 2021.
Forex: CBN To Engage Crime Agencies To Fight Fraudsters
The Central Bank of Nigeria (CBN) has vowed to engage financial crime fighting agencies to pursue fraudsters who have been deceiving the banks with fake documents to buy foreign exchange at cheap rates and sell at higher rates at the black market.
The apex bank had, few weeks ago, stopped selling forex to Bureau De Change operators and asked legitimate travellers to approach the banks to access cheap forex.
This is against the backdrop that many customers have been deceiving commercial banks with fake documents to obtain the forex at cheaper rate, and prevented genuine travellers from gaining access to forex.
The CBN Governor, Godwin Emefiele, had in an earlier statement, said that the BDCs defeated their purpose of existence to provide forex to retail users and had become wholesale and illegal dealers.
“They have remained renegade and so greedy, recalcitrant with abnormally high profit from these sales, while ordinary Nigerians have been left to feel the pain and therefore suffer,” the CBN boss said.
Emiefele had posited that the CBN had maintained its stand to discontinue the sale of forex to the BDCs.
He urged Nigerians with legitimate business to approach the banks for cheap forex.
According to him, travellers could access up to $4,000 for personal travelling allowance and $5,000 for business travelling allowance.
Findings, however, showed that commercial banks have been reporting fraudulent forex demands to the CBN.
Confirming this, the CBN governor said, “We conducted a study; one of the banks in one day sold to 52 people who said they wanted to travel. After two weeks, they went to check, 40 out of the 52 had cancelled their tickets.
“How could you have a situation where about 70 per cent or 80 per cent who went to bank to buy BTA on the reason that they want to travel, banks sold to them, they turned back and went and sold to the black market. They were asked to return it and we are going to pursue you if you are involved in these nefarious activities.
“If you go to bank with fake visa, fake passport, we have told them not to sell to you. If they sell to you mistakenly, and after two weeks, we check and find that you cancelled your ticket or your visa is fake, they will call you because you are their customer.
“They have your BVN, they have your number, they will call you to return the dollars. If you do not return it, they will place your name on their website, your BVN on their website, we will pick those details.
“We will send them to EFCC and other crime agencies, they will pursue you and you must return the dollars because you cannot acquire it illegally. That is our position”.
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