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FG Spends N150bn On Fuel Subsidy Monthly, NNPC Admits

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The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has disclosed the Federal Government spends as much as N140billion to N150billion to subsidise premium motor spirit (PMS) otherwise called petrol, monthly.
According to Kyari, the open price of petrol has risen to N256 per litre.
With the present pump price of petrol pegged at N162 per litre, it means government is subsidizing the product by N94 per litre.
Kyari said petrol daily truck out has risen significantly to 103 million per litre.
He said, “If we are to sell at the market today at current exchange rate, we will be selling the product at about N256 to a litre. What we sell today is N162, so, the difference is at a cost to the nation”.
“The difference comes back to as much as N140billion to N150billion cost to the country monthly.
“As long as the volume goes up, that money continues to increase and we have two sets of stress to face, stress of supply and stress of foreign exchange for the NNPC. We may not see foreign exchange cheque taking place for importation”.
Kyari stressed at the meeting which had the Economic and Financial Crimes Commission (EFCC), Department of State Services (DSS), Nigeria Police Force (NPF), Nigeria Customs Service (NCS), Nigeria Security and Civil Defence Corps (NSCDC), and other relevant downstream and upstream stakeholders in attendance, harped on the need to find urgent solution to petrol smuggling challenge in the country.
He explained, “In very recent data, we see what we really want in the beginning of May and June, there was a day we load out about 103 million litres of PMS within one day across the depots. We know it is not required, we know it is inappropriate and we also know that something wrong is happening that somebody is chasing something.
“But we in NNPC, we are not in control of that, we are not in every depot, we don’t keep products in all the depot but when the volume goes down, it comes down to us, when there is tight in supply, it comes back to the NNPC and we solve the problem”.
The NNPC boss said that President Muhammadu Buhari had directed that smuggling must stop, adding that it was the reason for inviting all stakeholders to chart the way forward.
Stakeholders in the downstream sector of the petroleum industry have blamed distribution system and low pump price for the increasing rate of smuggling of petrol, out of Nigeria.
The stakeholders, who include marketers, depot owners and transporters called for synergy to check the activities of smugglers.
Speaking at a stakeholders meeting to work out synergy to tackle incidents of smuggling of petroleum products criminals, the Chairman of the Board of Directors of the Independent Marketers Association of Nigeria (IPMAN), Alhaji Aminu Abdulkadiri urged the Nigerian National Petroleum Corporation (NNPC) to release more products to its members.
Abdulkadiri noted that with over 20,000 filling stations across the country, IPMAM members sell directly to the Nigerian people.
He said, “I have been in this industry for over 30 years and there are underlying issues that I want the GMD to take cognizance of and this will go a long way in chasing who does what.
“One, we have almost 30,000 retail outlets in this country and both major marketers and DAPMAN have about 2000-3000, the rest belong to my members. But the truth there is who is responsible for storing and distributing this product? The bulk of this product is being distributed by DAPMAN.
“NNPC needs to work with IPMAN and DAPMAN ensure that marketers that have retail outlets that are viable for Nigerian consumers should be attached to each depot in this country. That way NNPC can track most of these products that are being either diverted or smuggled out.
“But so long as the source of distribution is not monitored and product are sold indiscriminately, the problem will continue”, he added.
On her part, Chairman, Depot and Petroleum Products Marketers Association of Nigeria (DAPMAN), Mrs. Winifred Akpani, said the group was concerned about the high volume of petrol consumption in Nigeria.
Akpani said it was difficult to determine the actual amount of petrol consumed in the country, pointing out, however, that the Department of Petroleum Resources (DPR) has critical role to play if smuggling was to end in the country.
“We as depot operators do not own all these stations but we sell a lot to people who have the stations. And one thing we always insist is where is your DPR licence not only are you going to show us your DPR licence we are going to cross check with the list that updated periodically and send to each depot by the DPR and it only on that basis that we sell product to you,” she added.
She noted with the resources and technology available in the industry, tracking the movement of trucks should not be a big challenge.
Also speaking, the National President of the Nigerian Association of Road Transport Owners (NARTO), Alhaji Yusuf Lawal Othman, called for closer monitoring truck outs at the depots.
According to him, “The system needs to be reorganized. I don’t see any reason why you have 200 filling stations in a local government that does not consume more than 45,000 litres.
“I also don’t see how the depot which normally do programme per day will programme quite a number of trucks to a local government which does not consume more 45,000 litres per day. It means that we are sleeping”.

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Osinbajo Solicits Support For FG’s Housing Scheme

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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.

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Nigerians Spent N2.33trn On Petrol In 13 Months – NNPC

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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.

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Forex: CBN To Engage Crime Agencies To Fight Fraudsters

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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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