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Nigeria Subsidises Petrol Consumption For Other African Countries

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The massive petrol subsidy currently being reported by the Nigerian National Petroleum Corporation (NNPC), may be a reflection of petrol consumption not only by Nigerians, but also those used by neighbouring African countries.
This development is being justified by the sudden appreciation in daily petrol consumption for Nigeria from 35 million litres to 60 million litres.
However, some oil marketers, maintained that the 60 million litres daily consumption of petrol being quoted was not possible for Nigeria’s current population and potential petrol users.
They described the figure as over bloated, saying the sudden rise to 60 million litres daily is questionable, and should be investigated.
This is just as regulatory agencies including the Petroleum Products Pricing Regulatory Agency (PPPRA), National Bureau of Statistics (NBS), the Petroleum Equalisation Fund (PEF), have opened investigations into the sudden surge in consumption levels.
Already, a total of N1.4trillion according to the federal government is being spent annually by NNPC as subsidy on premium motor spirit (PMS) also called petrol, even though there is no budgetary provision for subsidy in the 2018 budget, and has not been for some years now.
Although, it described the amount as under-recovery, the government said the national oil firm had been shouldering the huge financial burden, because it is the country’s supplier of last resort when it comes to the provision of petroleum products.
The Executive Secretary, Depot and Petroleum Products Marketers Association (DAPPMA), Femi Adewole said that owing to widespread concern over the 60 million litres, a study being coordinated by the Ministry of Petroleum Resources, to ascertain the true consumption of petrol by Nigerians, is ongoing.
Spokesperson for NNPC, Ndu Ughamadu, confirmed that large quantities of both imported and locally-refined petroleum products were being smuggled to neighbouring countries.
He said: “In fact, in Ghana, there is a special name and local market for these smuggled products particularly Premium Motor Spirit (petrol).
“A reason for the smuggling is the huge attractive and sumptuous price differential between what petrol is sold in the Nigerian open market vis-à-vis those of the neighbouring countries; the wider the gaps, the more the smuggling and price distortions.”
Also condemning the huge subsidy burden, an independent marketer and Managing Director, Petrocam Trading Nigeria Limited, Patrick Ilo, described the incidence as unwarranted.
Ilo said: The country is losing close to about N1.2 billion everyday subsidising fuel, and it is like a free gift to marketers. About seven nations around Nigeria are not subsidising petrol.
“The product is being taken outside Nigeria, and they are the ones benefitting. There are over 2,700 filling stations around the borders of Nigeria providing these leakages.”

This kind of money we use in subsidising the product should be used to build infrastructure and some other things in the country.”
A major marketer also told The Guardian in confidence that the 60 million litres far exceeds what Nigerian can consume per day.
By his estimation, 25 million litres daily could be “justifiable” against the 35 million previously peddled by government.
“This is a case of gross abuse on the side of the authorities saddled with the responsibility to bring in petrol into the country. It is unfortunate,” he lamented.
He maintained that a large chuck of the daily subsidy the NNPC claims to be paying on petrol was obviously subsidies on petrol consumed by neighbouring countries around Nigeria.

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Oil & Energy

Group Hails New Policy On Gas Retailing 

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A group known as the Association of Surface Tank Oil and Gas Retailers (ASTROGEN) has hailed the new policy on gas retailing introduced by the Department of Petroleum Resources (DPR) which encourages the use of domestic gas in the rural areas.
Rivers State Chairperson of the group, Comrade  Patience Uche said the policy was in line with, “the vision and strategic target of the group to promote the direct involvements of the people in surface tanks oil and gas retailing business.”
She urged the DPR to allocate more operational licenses to its members to  own and operate surface tank  business in the rural areas.
She pointed out that the initiatives will, “ promote entrepreneurial development in the rural areas, reduce petroleum and gas supplies from foreign marketers through importation of products and reduce bunkering.”
She said the group was ready to partner with the DPR and other stakeholders in the down stream sector, especially in the mobilisation of the grassroots to key into the policy and domesticate the use of gas in their homes.
It would be recalled that the authorities of DPR recently   announced the introduction of a new policy on the use of domestic gas.
The DPR in a press statement said the new gas policy would introduce the use of domestic gas in the rural areas, through the building of surface gas tanks in the rural areas for retailing.
The statement also encouraged the use of domestic gas, rather kerosene in homes.

 

Taneh Beemene

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Oil & Energy

Expert Decries Abuse Of MoUs By Oil Firms

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The brewing conflicts between oil companies and their host communities in the Niger Delta over the breach of agreements signed by the corporate partners are generating concern among stakeholders.
Worried over the increasing spate of disagreements between oil firms and their host communities, an expert in the oil and gas sector, Dr Eddie Wikina has called on all multinationals and corporate organisations operating in the Niger Delta to implement the Memorandum of Understanding (MOUs) signed with their host communities.
Wikina who spoke with The Tide in an exclusive interview, recently said  IOCS and other multinationals operating in the region mostly  flout MOUs  signed with host communities, leading to conflicts and absence of sustainable  development in the communities.
He pointed out that; “modern industry practices require that both the oil firms and the host communities operate in mutual agreement and synergy through a well community engagement model that would be subject to upward reviews to suit evolving developments to avert crisis.”
He noted that oil related conflicts have been a predominant feature of the Niger Delta over the years and urged prospecting oil firms and other corporate organisations in the Niger Delta to learn from the experiences of the past to improve their host community relations by contributing meaningfully to the  development of their host communities.
The expert in Petroleum Engineering said  host communities were major stakeholders in the oil and gas business, noting that their active participation in the sector was an elixir to smooth business operation.
“It’s certain that business activities can’t strive in an environment where their is mutual disagreement and incessant conflicts. Global standards in oil and gas business require that host communities be given their due sense of belonging to promote peace and development. The business concern must be accommodative of the development interest of the host communities, any company that glosses over the interest of its host communities is bound to face challenges,” he said.
He cautioned against the influx of substandard oil firms in the Niger Delta and called on the federal government to enact laws that will compel multinationals to implement all agreements signed with their host communities.
“Not all companies that prospect for oil in the Niger Delta have the capacity for effective business operation, some of them don’t have the industry experience and lack the potency to make the right impact,” he noted
According to him, the implementation of the Petroleum Industry Bill will address the inherent challenges in the oil and gas sector, especially in the development of oil and gas producing communities.

 

Taneh Beemene

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Oil & Energy

‘FG Loses N5.9bn Annually To Illegal Bunkering, Pipelines Vandalisation’

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A group known as the Association of Surface Tank Oil and Gas Retailers, (ASTOGRN) says available statistics have revealed that oil bunkering activities and pipeline vandalisation in the Niger Delta costs the Federal Government about N5.9 billion annually.
Chairperson of the Rivers State chapter of the association, Comrade Patience Uche, made the disclosure during an exclusive interview with The Tide in Port Harcourt, at the weekend.
Apart from the huge loss in revenue, she said oil bunkering and pipeline vandalisation had also resulted in the colossal loss of lives as most of the vandals were always consumed in pipeline explosions during the bunkering activities.
Comrade Uche, who decried the increasing involvement of youths in illegal bunkering, advocated for a more proactive and corrective measure to bring lasting solution to the vice.
According to her, part of the solution is the building of modular refineries in the Niger Delta and the engagement of the youth in the oil and gas sector.
“Most of the youths who got involved in illegal oil bunkering and lost their lives in the process could have played a more creative and productive role in the oil and gas industry if they were functionally trained.
“The Federal Government should be serious about the establishment of modular refineries and the training of youths to participate in the process, this will go a long way to tackle the challenges of illegal bunkering in the Niger Delta, she said.
Comrade Uche said the major drive of the association was to make oil and gas business rural based, “to improve the socio-economic and general living conditions of its members”.
She was optimistic that the association will achieve the targets by encouraging its members to get licences from the Department of Petroleum Resources (DPR) to be actively involved in the oil and gas business.
She pointed out that the initiative would also reduce petroleum supplies from foreign marketers through importation of products, kill the spirit of bunkering and increase the federal government’s revenue on surface tank retails business in the country.

 

By: Taneh Beemeneh

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