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PEF Bridges To Ensure Uniformity In Petroleum Prices

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The Executive Secretary of the Petroleum Equalisation Fund
(PEF), Mrs Adefunke Kasali in this interview gives an insight into the
operation of the PEF. Excerpts:

 

Question: Could you tell us in brief what your Fund does as
it relates to the deregulation of the downstream oil sector

Answer:The Petroleum Equalisation Management Fund was
established many years ago, in 1973 to be exact, and the mandate of the fund
and the board is basically to ensure that marketers who bridge petroleum
products from point of receipt to their retail outlet are reimbursed

for the transport element of that transport activity in
order to ensure that government policy of uniform prices are fulfilled, and the
board has been doing that since all these years.

Our three major schemes are the bridging, the inter-district
scheme and the equalisation scheme.

To give you an idea, what that means, bridging is the
transportation of products over a period in excess of 450 km. It involves going
from one depot which is the loading depot to the receiving depot, and it has to
be in excess of a 450 km

The inter-district is the same thing, from loading depot to
the receiving depot but this time around, it is less than 450km.The
equalisation scheme is when a marketer loads from the receiving depot to his
retail outlet.

For instance, if the marketer is located in Abuja
environment, the marketer will move from, let’s say, a loading facility in
Lagos, could be Ejigbo satellite depot, he will first of all move that product
to Suleja which is a receiving depot which is a PPMC depot and then, from
there, he will move his product to Abuja.

Question:You talked about uniformity in the pricing, against
the backdrop of the deregulation, though the government price is N97, you still
find people selling it as much as N150, is that uniformity in pricing still
viable?

Answer:I think it is important to go to the background of
our uniformity in prices. Our country is vast. The terrain is very different
from area to area. There are some that are very swampy; in the south-south, you
find creeks and petroleum products are best transported through pipelines.

We all know what happened to pipelines in the recent days’
vandalism, sabotage, breakdown, poor maintenance over the years, has caused the
integrity of some of those pipelines, in fact, majority of them have been
questionable.

When you then move petroleum products through them and you
know somebody is just waiting to hack them once they know that petroleum
products are moving, it creates all kinds of issues.

That’s why we see the concept of bridging, that is, moving
these products by trucks come up a lot in the last few years. PEF as an
organisation is the one that then takes care of that bridging activity without
which, movement of petroleum products and the receipt of the product around the
country will be very difficult.

That idea behind uniformity is that you shouldn’t be
disadvantaged based on where you live. If you live somewhere that is not easy
to get pipelines through the place, then you shouldn’t be penalised for living
in that area.

As to the issue of the pricing, we found out that in some
areas, that there are some unscrupulous marketers that probably take advantage
but it’s not everywhere they take advantage of the situation. It is usually
worse when there are things happening in the country when you see the hike in
prices at retail outlets.

But generally speaking, you find out that prices are around
about where government has put them. (N97).

Question: Some marketers have complained of delay or refusal
to pay them, what are you doing in this regard?

Answer:There are some marketers that we refuse to pay
because they have issues with us, either because we found out that they have
submitted questionable documentation with us to come and collect reimbursement
from us. In that case, if they have bad or questionable weigh-bill, there will
be necessary delays in processing some of these claims until we resolve all of
these claims.

There are times in the past when we have had delays in
payment and if you come to our office, and have a look at where we put all
these claim files. It is in stacks and stacks of files.

(Cuts In)

Question:Why should you allow stacks to mount, if they were
attended to on time?

Answer: We don’t allow them to mount, unfortunately, the
rate at which they bring them is just far outweighs the ability to properly
scrutinise those files and we have to ensure that we are not just paying
government money, without ensuring that those documents are valid.

We have to ensure their veracity, we have to ensure they
loaded the products, we have to ensure that they delivered the product and so
in the process of doing all these confirmation, with the staff we have, it is
very tedious.

The other thing is that, sometimes we just don’t get the
document that we need to do the confirmation. And so, we have a process now
whereby the loading facility and the receiving facility must both send us those
claims and we then match them. Otherwise, somebody might load and not deliver
them and come and make claims. We are a responsible organisation and we cannot
allow that to happen and so may cause delay in some cases.

Question: As a follow up, are there sanctions for
defaulters? How many have you been able to pay in the last two years?

Answer: The act establishing the fund has a penalty in
there, but it is very old. It is like N50,000 (Fifty Thousand Naira.) When the
act is revised by the PIB, that will change. That’s not very punitive, it just
puts it on us, and we have to do the proper work to make sure if the penalty is
not deterrent, then we sort them out and sift these things out (files).

On our marketers’ list, we have thousands of marketers, and
on the retail list, all independent marketers. We deal with major marketers, we
deal with DAPPMA marketers. And so we have very many marketers, and we process
well over 100,000 claims every year.

So if a marketer moves a product now and concluded the
transaction, he may wait to move 10 or 15 other transactions and put them in
altogether. So all those individual lifting, we have to find the receipt of
payments, the invoice and the delivery confirmation, the loading confirmation
for each and every one of them.

So in a file that contains 20 meter tickets representing 20
liftings, that work has to be done for each of those 20 loadings, but we have
now been able to design a soft ware that we are just now in the process of
verifying, and perfecting that will do that matching for us automatically.

But when we don’t get data from all the facilities involved,
then again we will just slow the process down.

Question: The software that you talked about, could it be
the planned electronic loading scheme project Aquila, how much has PEF been
able to save for Nigeria from the introduction of that project?

Answer: That project, the software I was just talking about,
is something we designed along the way, that’s not the Aquila. We have been
working on Aquila since December 2007. We have spent the last four years
perfecting it and doing all the other implementation on project Aquila.

Project Aquila will actually eliminate all the things that
we are talking about here. With project Aquila, the first thing is that there
must be a loading and receiving. One of the issues that we have had is that we
are never sure whether a product was loaded or received. In some cases we have
had situations where it was purportedly received but it was never loaded.
Aquila will ensure that there is a genuine transaction.

The other thing with Aquila is that the product is now very
smooth and efficient and then the payment is done under two weeks. So you don’t
have the delay because it is now all electronically done.

With Aquila we have moved to an end-to-end electronic
solution where it is loaded and dispatched by a mobile computer working with an
RFID device. So that at each of our depots, our depot representatives have this
device, this is the mobile computer; part of it and this is the RFIDD device,
which reads the information.

On every truck registered and tagged there is this RFIDD tag
that is affixed on that truck and all the information on that transaction is
actually stored on the device. The software is re-writable and so when the
transaction is ready; our depot representative reads all the information from
our server unto this device and dispatches the truck electronically.

Right now, the manual system we have to stamp and they
falsify our stamps. Now there is no stamping required, you just go in there
once it is dispatched, that information from this device once the truck has
been let go that information automatically goes into the server in our head
office and at the receiving depot where that truck is headed.

By the time the truck gets there in two or three days or
however long it takes that truck driver to get there, that information is
already sitting on the server and when the truck gets there the depot
representatives at our receiving depot basically goes to the truck and verifies
that information.

 

To be continued

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Oil & Energy

TotalEnergies, Conoil Sign Deal To Boost Oil Production

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TotalEnergies has signed agreements with Conoil Producing Limited under which to acquire from Conoil a 50 per cent interest in Oil Processing Licence (OPL) 257, a deep-water offshore oil block in Nigeria.
The deal entails Conoil also acquiring a 40 per cent participating interest held by TotalEnergies in Oil Minining Lease (OML) 136, both located offshore Nigeria.
Upon completion of this transaction, TotalEnergies’ interest in OPL257 would be increased from 40 per cent to 90 per cent, while Conoil will retain a 10% interest in this block.
Covering an area of around 370 square kilometres, OPL 257 is located 150 kilometers offshore from the coast of Nigeria. “This block is adjacent to PPL 261, where TotalEnergies (24%) and its partners discovered in 2005 the Egina South field, which extends into OPL257.
Senior Vice-President Africa, Exploration & Production at TotalEnergies, Mike Sangster, said “An appraisal well of Egina South is planned to be drilled in 2026 on OPL257 side, and the field is expected to be developed as a tie-back to the Egina FPSO, located approximately 30 km away.
“This transaction, built on our longstanding partnership with Conoil, will enable TotalEnergies to proceed with the appraisal of the Egina South discovery, an attractive tie-back opportunity for Egina FPSO.
“This fits perfectly with our strategy to leverage existing production facilities to profitably develop additional resources and to focus on our operated gas and offshore oil assets in Nigeria”.
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Oil & Energy

“COP30: FG, Brazil Partner On Carbon Emissions Reduction

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The Federal Government and Brazil have deepened collaboration on climate action, focusing on sustainable agriculture, renewable energy, and the reduction of black carbon emissions.
The partnership is anchored in South-South cooperation through the Brazil-Nigeria Strategic Dialogue Mechanism, which facilitates the exchange of ideas, technology, and policy alignment within the global climate framework, particularly the Paris Agreement.
The Executive Secretary, Amazon Interstates Consortium, Marcello Brito, made the disclosure during an interview with newsmen, in Abuja, on the sidelines of the 2025 COP30 United Nations Climate Change Conference, held in Belem, Brazil.
Brito emphasized that both nations are committed to global efforts aimed at curbing black carbon emissions, a critical component of climate mitigation strategies.
“Nigeria and Brazil are collaborating on climate change remedies primarily through the Green Imperative Project (GIP) for sustainable agriculture, and by working together on renewable energy transition and climate finance mobilisation,” Brito said.
“These efforts are part of a broader strategic partnership aimed at fostering sustainable development and inclusive growth between the two Global South nations,” Brito added.
TheTide gathered that President Bola Ahmed Tinubu announced an ambitious plan to mobilize up to $3 billion annually in climate finance, through its National Carbon Market Framework and Climate Change Fund, positioning itself as a leader in nature-positive investment across the Global South.
Represented by the Vice President, Senator Kashim Shettima, Tinubu made the announcement during a high-level thematic session of the conference titled ‘Climate and Nature: Forests and Oceans’
Tinubu stressed that Nigeria’s climate strategy is rooted in restoring balance between nature, development, and economic resilience.
Hosted in the heart of the Amazon, on November 10—21, the 30th COP30 conference brought together the international community to discuss key climate issues, focusing on implementing the Paris Agreement, reviewing nationally determined contributions (NDCs), and advancing goals for energy transition, climate finance, forest conservation, and adaptation.
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Oil & Energy

DisCo Debts, Major Barrier To New Grid Projects In Nigeria ……. Stakeholders 

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Energy industry leaders and lenders have raised concerns that the high-risk legacy debts of Distribution Companies (DisCos) and unclear regulatory frameworks are significant barriers to the financing and development of new grid-connected power projects in Nigeria.
The consensus among financiers and power sector executives is that addressing legacy DisCo debt, improving contractual transparency, and streamlining regulatory frameworks are critical to unlocking private investment in Nigeria’s power infrastructure.
Speaking in the context of new grid-connected power plants, during panel sessions at the just concluded Lagos Chamber of Commerce and Industry (LCCI) Power Conference, Senior Vice President at Stanbic IBTC Infrastructure Fund, Jumoke Ayo-Famisa, explained the cautious approach lenders take when evaluating embedded or grid-scale power projects.
Ayo-Famisa who emphasized the critical importance of clarity around off-takers and contract structures said “If someone approaches us today with an embedded power project, the first question is always: Who is the off-taker? Who are you signing the contract with?” . “In Lagos State, for example, there is Eko Electricity and Excel Distribution Company Limited. Knowing this is important,” she said.
She highlighted the nuances in contract types, whether the developer is responsible just for generation or for the full chain, including distribution and collection.
“Collection is very important because you would be wondering, ‘is the cash going to be commingled with whatever is happening at the major DISCO level, is it ring-fenced, what is the cash flow waterfall,” she stated.
Ayo-Famisa pointed out that the major stumbling block remains the “high leverage in the books of the legacy DisCos.” Incoming project financiers want to be confident that their cash flows won’t be exposed to the financial risks of these indebted entities. This makes clarity on contractual relationships and cash flow mechanisms a top priority.
Noting that tariff clarity also remains a challenge, Ayo-Famisa said “Some states have come out to clearly say that there is no subsidy; some are saying they are exploring solutions for the lower income segments. So, the clarity would be on who is responsible for the tariff, is this sponsored?, Can they change tariffs?, In terms of if their cost rises, they can pass it on, or they have to wait for the regulator.
“Unlike, what you find in the willing seller-willing buyer, where they negotiate and agree on their prices. Now they are going into grid, there is Band A, Band B, if my power goes into, say, Ikeja Electric, or I have a contract with them, “am I commingled with whatever is happening across their multiple bands?”
Also speaking, Group Managing Director and CEO of West Power & Gas Limited, Wola Joseph Condotti, stressed the dual-edged nature of decentralization in the power sector.
“Of course, decentralization brings us closer to the people as the jurisdiction is now clear. You also know that your tariff would be reflective of the type of people living in that environment. You cannot take the Lagos tariff to Zamfara, and this is what has been happening before now in the power sector. So, decentralization brings about a more customized solution to issues you find on the ground.
“Some of the issues I see are those that bother on capacity. It was a centrally run system that had 11 DISCOs. Of the 11 DISCOs, I think there are 3 or 4 of us today that are surviving or alive, if I may put it that way. If you go to electricity generation companies, they are doing much better,” she said.
Condotti highlighted regulatory overlaps as another complication, especially when power generation or distribution crosses state lines.
She said, “Investors would definitely have a problem. Say if you have a plant in Ogun State supplying power to another state, say Lagos State; you are automatically regulated by NERC. But the truth is that the state regulator of Ogun State and Lagos State wants you to comply with certain regulatory standards.”
With the growing demand for reliable electricity and an urgent need for infrastructure expansion, the ability to navigate these complex financial and regulatory landscapes would determine the pace at which new grid-connected power projects can be developed.
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