Oil & Energy

CBN Stops Dollar Sales To NNPC

Published

6 years ago

March 24, 2020

Central Bank of Nigeria (CBN), has stopped local and international oil companies from selling dollars to the Nigerian National Petroleum Corporation (NNPC).
The apex bank said the move is in line with the its determination to improve foreign exchange supply to the economy as the impact of the Coronavirus (COVID-19) pandemic bites harder on the economy. The country’s foreign exchange earnings have been depleted.
CBN Governor Godwin Emefiele said the new dollar remittance policy will boost local dollar collections.
Breaking the news during an emergency meeting with bank chief executive officers in Lagos at the weekend, Emefiele spoke of the urgent need to improve dollar supply to the apex bank, which has vowed to meet all dollar obligations to correspondent banks from importers.
CBN’s commitment to naira stability is accompanied with new policies and bottlenecks meant to reduce dollar spending and meet critical obligations, including those to correspondent banks on Letters of Credit and other trade obligations.
The dollar is expected to be sold to the CBN at N377 to the dollar; same rate banks are to auction dollars to the regulator.
The CBN will also be granting naira and forex funding to key local pharmaceutical companies for procurement of raw materials and equipment required to increase local drug production in the country.
They are Emzor, Fidson, GSK, May & Baker, Unique Pharma, Swiss Pharma, Neimeth, Sagar, Orange Drugs, Dana Pharma, among others, hence the need to effectively harness Nigeria’s dollar earnings in the interest of the economy.
Emefiele explained that the primary focus of the bank at this time is preserving confidence, financial stability and support for the economy.
He said: “We are committed to improving forex supply to the CBN, by directing all oil companies -international, and domestic, whether you are in the service industry, or producing, upstream, mid-stream, downstream, or related companies, to sell their foreign exchange to the CBN and no longer to NNPC, for purposes of funding even import of petroleum products, and also new policy on price modulation.”
The CBN had on Friday officially devalued the naira to N380 to a dollar. The devaluation came after over three years of push from financial market managers, the World Bank and International Monetary Fund for the local currency to be devalued.
Aside devaluing the naira, the CBN also adopted a unified exchange rate, and pushed the official rate of the naira to N376 to dollar for International Money Transfer Operators rate to banks; N377 to dollar for banks’ dollar sale to CBN and pegged CBN’s dollar sales to banks at N378 and limited dollar sales to Bureaux de Change (BDCs) to $20,000 per week.
Emefiele also advised Nigerians to begin prioritising their import needs, and focus more on sourcing raw materials and inputs locally.
Emefiele said: “In deed, there is no choice than to source raw materials locally. From the information available to us, the various lockdowns in different parts of the world, all counties are locking their borders, and making it difficult for even raw materials and inputs to leave their borders.
“So, it means we have no other choice than to look inwards, especially now we can say that those inputs and raw materials can be sourced locally.”
The CBN, in February, introduced new domiciliary account rules in which it directed that customers can deposit dollar into their domiciliary accounts but are not allowed to transfer it to another party.
Also, only electronic fund transfers into domiciliary accounts can be transferred from such accounts to third parties while cash deposits into such accounts can only be withdrawn in cash.

Oil & Energy

NERC, OYSERC Partner To Strengthen Regulation

Published

3 days ago

February 23, 2026

The Tide

THE Nigerian Electricity Regulatory Commission (NERC) has stressed the need for strict adherence to due process in operationalizing state electricity regulatory bodies.

It, however, pledged institutional and technical support to the Oyo State Electricity Regulatory Commission (OYSERC).

The Chairman, NERC, Dr Musiliu Oseni, who made the position known while receiving the OYSERC delegation, emphasised that the establishment and take-off of state commissions must align fully with the law setting them up.

Oseni said that the NERC remains committed to partnering with State Electricity Regulatory Commissions (SERC) to guarantee their institutional stability, operational effectiveness and long-term success.

He insisted that regulatory coordination between federal and state institutions is critical in the evolving electricity market framework, noting that collaboration would help to build strong institutions capable of delivering sustainable outcomes for the sector.

Also speaking, the Acting Chairman, OYSERC and leader of the delegation, Prof. Dahud Kehinde Shangodoyin, said that the visit was aimed at formally introducing the commission’s acting leadership to the NERC and laying the groundwork for a productive working relationship.

Shangodoyin said , the acting members were appointed to provide direction and lay a solid foundation for the commission during its transitional period, pending the appointment of substantive members.

“We are here to formally introduce the acting leadership of OYSERC and to establish a working relationship with NERC as we commence our regulatory responsibilities,” he said.

He acknowledged NERC’s readiness to provide technical and regulatory support, particularly in the area of capacity development, describing the backing as essential for strengthening the commission’s operations at this formative stage.

“We appreciate NERC’s willingness to support us technically and regulatorily, especially in building our capacity during this transition,” he added.

Oil & Energy

NLC Faults FG’s 3trn Dept Payment To GenCos

Published

3 days ago

February 23, 2026

The Tide

The Nigeria Labour Congress and the Association of Power Generation Companies have engaged in a showdown over federal government legacy debt.

NLC president Joe Ajaero has faulted the federal government’s move to give GenCos N3 trillion from the Federation account as repayment for a power sector legacy debt, which amounts to N6.5 trillion.

In a statement on Thursday, Ajaero said the Federal Government proposed the N3 trillion payment and the N6 trillion debt as a heist and grand deception to shortchange the Nigerian people.

“Nigerians cannot and should not continue to pay for darkness,” Ajaero stated.

Meanwhile, the Chief Executive Officer of the Association of Power Generation Companies, APGC, Dr. Joy Ogaji, said Ajaero may be ignorant of the true state of things, insisting that the federal government is indebted to GenCos to the tune of N6.5 trillion.

She feared the longstanding conflict could result in the eventual collapse of the country’s power.

According to her, the federal government’s N501 billion issuance of power sector bonds is inadequate to address its accumulated debt.

Oil & Energy

PENGASSAN Rejects Presidential EO On Oil, Gas Revenue Remittance ……… Seeks PIA Review

Published

3 days ago

February 23, 2026

The Tide

The Natural Gas Senior Staff Association of Nigeria(PENGASSAN) Festus Osifo, has faulted the public explanation surrounding the Federal Government’s recent oil revenue Executive Order(EO).

President of the association, Festus Osifo, argued that claims about a 30 per cent deduction from petroleum sharing contract revenue are misleading.

Recall that President Bola Ahmed Tinubu, last Wednesday, February 18, signed the executive order directing that royalty oil, tax oil, profit oil, profit gas, and other revenues due to the Federation under production sharing, profit sharing, and risk service contracts be paid directly into the Federation Account.

The order also scrapped the 30 per cent Frontier Exploration Fund under the PIA and stopped the 30 per cent management fee on profit oil and profit gas retained by the Nigerian National Petroleum Company Limited.

In his reaction, Osifo, while addressing journalists, in Lagos, Thursday, said the figure being referenced does not represent gross revenue accruing to the Nigerian National Petroleum Company Limited.

He explained that revenues from production sharing contracts are subject to several deductions before arriving at what is classified as profit oil or profit gas.

Osifo also urged President Bola Tinubu to withdraw his recently signed Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026.

He warned that the directive undermines the Petroleum Industry Act and could create uncertainty in the oil and gas industry, insisting that any amendment to the existing legal framework must pass through the National Assembly.

Osifo argued that an executive order cannot override a law enacted by the National Assembly, describing the move as setting a troubling precedent.

“Yes, that is what should be done from the beginning. You can review the laws of a land. There is no law that is perfect,” he said.

He added that the President should constitute a team to review the PIA, identify its strengths and weaknesses, and forward proposed amendments to lawmakers.

“When you get revenue from PSC, you have to make some deductibles. You deduct royalties. You deduct tax. You also deduct the cost of cost recovery. Once you have done that, you will now have what we call profit oil or profit gas. Then that is where you now deduct the 30 per cent,” he stated..

According to him, when the deductions are properly accounted for, the 30 per cent being referenced translates to about two per cent of total revenue from the production sharing contracts.

“In effect, that deduction is about two per cent of the revenue of the PLCs,” he added, maintaining that the explanation presented in the public domain did not accurately reflect the structure of the deductions.

Osifo warned that removing the affected portion of the revenue could have operational implications for NNPC Ltd, noting that the funds are used to meet salary obligations and other internal expenses.

“That two per cent is what NNPC uses to pay salaries and meet some of its obligations.The one you are also removing from the midstream and downstream, it is part of what they use in meeting their internal obligations. So as you are removing this, how are they going to pay salaries?” he queried.

Beyond the immediate impact on the company’s workforce, he cautioned that regulatory uncertainty could affect investor confidence in the sector.

“If the international community and investors lose confidence in Nigeria, it has a way of affecting investment. That should be the direction. You don’t put a cow before the horse,” he added.

According to him, stakeholders, including labour unions and industry operators, should be given the opportunity to make inputs at the National Assembly as part of the amendment process saying “That is how laws are refined,”