Oil & Energy

Fuel Scarcity: Any Hope In Sight?

Published

11 years ago

March 10, 2014

As the current fuel scarcity
which is causing untold hardship to Nigerians lingers, most citizens look up to God amidst contradictory rhetorics from appropriate quarters and ask: when will this seemingly unending suffering come to pass?
In the word of Mrs Dema Ogba, a director of NEDAL Oil Company Limited, “before this present down-turn, one good credit to the present administration led by President Goodluck Jonathan, which the critics of his administration could not take away from him, is his ability to win the battle against scarcity of fuel which had been the albatross of past administrations.” The director who expressed regret at the ugly situation urged the oil marketers, the government and other major stakeholders in the sector to expedite actions towards restoring normalcy.
In Abuja, Kano, Sokoto, Lagos, Enugu and even down to Port Harcourt, the oil city, the story remains the same: That long queues have remained unabated at the filling stations selling fuel, thereby forcing innocent Nigerians towards the black market where the price of a litre of fuel has jumped from the official pump price of N97 to N200.
The harsh situation, Chief Akpangbo Christopher noted, “has drawn out the worst from some unpatriotic Nigerians who are taking undue advantage to hike price, hoard the product and the next stage now would be to start mixing solutions with little fuel for money, and you know the resultant danger; explosion.
From Okehi, the Etche Local Government Council headquarters, to Mile III Park in Port Harcourt that used to cost N300.00 commercial drivers now charge N350.00 and above. From Mile III Park to Lagos Bus Stop that normally takes N50.00 is now going for N100.00 and such fare increase is noticeable in many other routes across the country.
Market women who bear the brunt of increased fare told The Tide that they have no option than to increase prices of their commodities to meet the situation and make profit.
Mr Yusuf Adedayo, a commercial driver in Ibadan said I have been queuing for fuel since 9.00am and only got fuel at 2.00pm at N120 per litre. How can I make profit when I charge the same fare?
Udochukwu Nnadi, a black marketer, however is happy with the scarcity. “It is good business because many people who can’t buy from the petrol stations have no option than to patronise us. I sell at N200 per litre and when I observe that you belong to the top class, I sell at N250.00 per litre.” Nnadi disclosed that he has made real money within the past two weeks and prays that the scarcity should last longer.”
The black marketer also said they work together with the filling station attendants such that they always have supply since they also benefit from the deal.
Irked by the unpatriotic activities of some marketers who resorted to adjustment of metres and hoarding of products, the Rivers State Commissioner for Energy, Hon. Okey Amadi sealed two filling stations belonging to Oando and Conoil.
Amadi explained that normal supply still comes from the refinery and private tank farms and blamed the situation on dubious marketers who were worsening the situation by hoarding, selling above official pump price and tampering with their metres.
The commissioner advised residents of the state against panic-buying and stressed the inherent danger in hoarding petrol in our homes.
“If you hoard petrol in your homes so that you will make more money in a period of anticipated high price, the danger is that the product can cause fire outbreak that also goes with loss of lives and property.”
The cause of the scarcity is shrouded in secrecy as there has not been a clear explanation so far.
It was widely suspected that National Union of Petroleum and National Gas Workers (NUPENG) was behind the scarcity. But authorities of NUPENG quickly cleared the case last week when the union said it has no hand in the scarcity.
NUPENG said it has a case with some oil multinationals over quota and casual workers and was picketing the multinationals.
However, Comrade Godwin Eruba, chairman of NUPENG in the South-South Zone suspected that the scarcity could be as a result of the federal government not renewing licensing issues with the marketers, hence they could not import the product as at when due.
Eruba had pleaded with the government authorities to expedite actions so that the licence controversy could be resolved and petrol imported into the country to enable Nigerians get enough for their use.
Reports also said that the Department of Petroleum Resources (DPR) had attributed the current fuel scarcity across the country to the non-renewal of contracts of some independent marketers to import the product.
According to a source, the Zonal Operational Controller of DPR in Abuja, Mr Aliyu Halidu, who represents his director at the budget defence session before the Senate Committee on Petroleum (Downstream), the non-payment of subsidy fund to the marketers by the government had also hindered the importation of product, resulting in shortage in supply.
Halidu was reported to have urged the lawmakers to expedite action on the process of legislating on bunkering, in addition to resuscitating other laws which could facilitate elimination of illegal bunkering from the system.
He also urged the Senate to expedite action on the passage of the Petroleum Industry Bill (PIB) to help strengthen the DPR’s regulatory powers, according to the report.
But surprisingly, DPR authorities came up with a refutal denying claims that it attributed the current fuel scarcity to delays in the signing of contract for importation of petroleum products.
A statement issued by the Zonal Operational Controller, Mr Aliyu Halidu in Abuja office of DPR said that the agency did not discuss any issue of contract signing or illegal bunkering during the budget defence before the Senate Committee on Petroleum Resources (Downstream).
“The issue of renewal of contracts for the importation of petroleum was never discussed during the budget defence before the committee because we are not in the position to say that.”
The issue is not whether DPR authorities chose to swallow their vomit when the heat from above came up, or not, but that acute fuel shortage hit the nation and DPR should advance a convincing reason if actually they should earn their monthly pay.
The Petroleum Products Pricing Regulatory Agency (PPRA) said the reappearance of long queues at filling stations across the country is artificial and uncalled for.
The PPRA spokesperson, Mr Lanre Oladele told newsmen in Abuja that there was no basis for the scarcity currently being experienced adding that there was enough stock to keep the country going for days and that with the release of allocation of licences to marketers for the first quarter of 2014, there was no reason for the fuel scarcity.
He particularly described the claim that the scarcity was due to the delay in the release of import allocation to marketers as false and unfounded and stressed that the last allocation was enough to sustain the market till when the next allocation would be released.
But to some Nigerians, the allegations and contradictory rhetorics do not solve the nation’s practical challenges. Mrs Nkiru Emecheta, a student of the University of Science and Technology, Port Harcourt advised that “stakeholders should still continue to hide their secrets but find solutions to the embarrassing petroleum scarcity which they know to be real.”
There have been calls for transparency in the nation’s oil sector where most of the activities are shrouded in official secrecy.
The International Monetary Fund (IMF) in its concluding statement of the 2014 Articles IV Consultative Discussion of February 21, 2014, urged Nigeria not only to strengthen transparency and governance of its oil sector but also to advance policies that could focus on rebuilding external and fiscal buffers.
IMF forecast that the nation’s economic growth will accelerate this year to 7.3 per cent, motivated by sectors outside oil and energy industry which accounts for more than 90 per cent of the nation’s revenue.
Respite appears to have come as the federal government a couple of days ago announced that enough products have been imported into the country giving assurance that before the last weekend, there would be petrol across the nation.
But PENGASSAN industrial relations office dismissed the federal government assurances, saying even if there is fuel in all the depots across the nation, it will still take about more than two weeks to get the product to the filling stations in different parts of Nigeria.
“I’ve not seen the situation normalising before two weeks because if today there is fuel in all the depots, before they start loading and start distributing and off loading at all filling stations, I think it will take about two weeks.
PENGASSAN attributed the scarcity to delay in supply and urged Nigerians to avoid panic-buying because of its attendant dangers.

NNPC Mega Station in Abuja.

Chris Oluoh

Oil & Energy

Reps Launches Probe Into N200bn CBN Loan To DISCOs

Published

14 hours ago

May 12, 2025

The Tide

The House of Representatives has launched an investigation into the disbursement and utilisation of the N200billion Central Bank of Nigeria (CBN) loan allocated for the National Mass Metering Programme (NMMP) to Electricity Distribution Companies (DISCOs).
Chairman, House Committee on Public Assets, Rep. Uchenna Okonkwo, disclosed this in a statement in Abuja.
He confirmed that a 19-member sub-committee had been inaugurated to probe the matter thoroughly.
Okonkwo recalled that the NMMP, initiated in 2020, was designed to provide free electricity meters to Nigerian consumers through the Licensed Electricity Distribution Companies (DISCOs).
He said the programme was a joint initiative of the CBN, the Nigerian Electricity Regulatory Commission (NERC), and other stakeholders in the Nigerian Electricity Supply Industry (NESI), aimed at eliminating estimated billing, improve transparency in energy usage, and enhance customer satisfaction.
Speaking on the launch of the NMMP, the Rep said the programme was to be implemented in three phases to ensure the reduction of collection losses and improve market remittances in the industry.
“Under the pilot phase of the programme’s implementation, CBN commenced with the sum of N59.280 billion for procurement and installation of one million meters in 2020 at an interest rate of 9 per cent after a two year moratorium.
“Preliminary research on the NMMP has shown that instead of the pronounced amount of N59.280 billion naira for the phase 0, what was released was N55.4 billion for procurement and installation of 962,832 meters instead of one million meters pronounced by CBN”, he noted.
Okonkwo stated futher that concerns have been raised regarding repayment, with the committee noting discrepancies in the repayment of the funds by the DISCOs.
According to Okonkwo, “Research has also shown that the eleven Electricity Distribution Companies who received the loan have paid back to CBN as refund for the N54.4 billion they received in 2020 without mentioning the 9 per cent interest on the loan.”
The lawmaker, however, said the subsequent phases of the programme, which were expected to significantly expand metering across the country, have stalled, explaining that Phase 1, which was to be funded by the CBN and Deposit Money Banks (DMBs) for 1.5 million meters, and Phase 2, expected to be financed by the World Bank for four million meters, are yet to take off.
He said the House, exercising its constitutional powers under Sections 88(1) and (2) of the 1999 Constitution, resolved to investigate the matter with a view to safeguarding public interest.
According to him, the sub-committee is expected to scrutinise all aspects of the NMMP funding, from disbursement and meter procurement to distribution and repayment mechanisms.
The 19-member committee comprises Reps. Obed Shehu, Ali Shettima, Abel Fuah, Salisu Koko, Ahmed Munir, Sani Umar Bala, Gbefwi Jonathan, Abdulmaleek Danga, Chinedu Obika, and Okunlola Lanre.
Others include Reps. Abass Adekunle, Akinosi Akanni, Obuzor Victor, Peter Akpanke, Ngozi Lawrence, Ogah Amobi Godwin and Ikeagwuonu Onyinye.
It would be noted that the NMMP was expected to be a game-changer in Nigeria’s power sector by reducing estimated billing, enhancing energy accountability, and restoring consumer trust.
However, the current revelations point to implementation failures and possible mismanagement of public funds.
Analysts believe that the outcome of the House probe could lead to reforms in electricity metering policy and strengthen regulatory oversight of loan disbursements to DISCOs.

Oil & Energy

“Renaissance Energy, NNPC JV Donate ICU Equipment To RSUTH

Published

14 hours ago

May 12, 2025

The Tide

Renaissance Africa Energy Company Limited and its joint venture partners, including the Nigerian National Petroleum Company Limited (NNPC), have donated vital medical equipment and essential drugs to the Intensive Care Unit (ICU) of the Rivers State University Teaching Hospital (RSUTH).
Among the equipment are three ventilators, a laser therapy machine, as well as significant supply of seed stock drugs targeted at enhancing the hospital’s capacity to provide critical care and ensuring consistent drug availability.
Speaking at the Handover Ceremony at Renaissance Energy Headquarters, in Port Harcourt, the General Manager, Relations and Sustainable Development, Renaissance Africa Energy, Igo Weli, said, “The gesture by Renaissance and our partners is to enhance the capacity of the hospital to provide critical care to patients in need; improve the training of upcoming healthcare personnel; and provide support to dedicated healthcare professionals in their mission to save lives and improve patient outcomes.”
The Chief Upstream Investment Officer, NNPC, Oluwaseyi Omotowa, noted that the donations were part of a broader social intervention strategy of the Renaissance-operated joint venture.
Omotowa, who was represented by the Lead, Stakeholder Relations, NNPC Upstream Investment Management Services, Mrs. Uzo Ejidoh, further said “the JV has a deliberate corporate social responsibility strategy to serve the people.
“This is an unchanging commitment, hence our steadfast support and investment in social impact projects for the healthcare sector to continue to transform lives”.
Recieving the donations, the Chief Medical Director, RSUTH, Professor Chizindu Alikor, stated that the hospital was committed to the delivery of excellent healthcare along with research and training.
Alikor said, “The teaching hospital is on an upward trajectory. The ICU facilities were over stretched, and we are excited that our request to Renaissance and its partners for assistance was granted.
The CMD expressed the hospital’s confidence in Renaissance’s capacity and people-centric interventions, especially as it concerns Corporate Social Responsibility (CSR) in the health space.

By: Lady Godknows Ogbulu

Oil & Energy

Tight Now, Loose Later: Oil Futures Flash Warning

Published

14 hours ago

May 12, 2025

The Tide

Last week, OPEC+ announced it will once again accelerate the pace of unwinding of production cuts, with output targets for June increasing by 411,000 barrels per day, equivalent to three monthly increments.
This follows a similar move in April, with the organization appearing willing to stay the course amid low oil prices and fears of weakening demand.
We reported that global crude inventories remain low enough, thus giving OPEC+ a window to scale back its voluntary cuts until the market surplus finally arrives.
Saudi Arabia appears intent on “punishing” OPEC+ rascals such as Kazakhstan and Iran for repeatedly violating their quotas.
Commodity analysts at Standard Chartered have reported that the latest OPEC survey of secondary sources reveals that Kazakhstan’s crude oil output clocked in at 1.852 mb/d in March, 384 kb/d above its OPEC+ quota.
Further, the country also failed to keep its promise to cut 38 kb/d in compensation for overproduction in March, bringing its total overproduction to 422 kb/d.
The same scenario is expected to unfold in the coming months. Kazakhstan produced 240 kb/d more y/y in March, a sharp contrast from the other eight OPEC+ members who produced a combined 612 kb/d less.
And now, the oil futures markets are sending a dire warning that oil bulls could find themselves in trouble quite soon due to a combination of the OPEC+ output hike and Trump’s tariffs.
Oil futures curve has formed a rare “smile” shape, a structure Morgan Stanley says was last seen briefly in February 2020 just before the infamous oil price crash.
On Wednesday, Brent futures’ July contract was trading at a premium of 74 cents to the October contract, a market structure known as backwardation, foreshadowing immediate tight supply.
However, prompt prices from November have formed a contango, with forward prices flipping to a discount, indicating oversupply as traders predict Trump’s tariffs will eventually weaken oil demand. Having backwardation and contango together leads to the rare “smile” shaped curve.
According to the latest available data by the International Energy Agency (IEA), global oil inventories stood at 7.647 billion barrels in February, down from 7.709 billion barrels for last year’s corresponding period and close to the bottom of their historical five-year range.
Meanwhile, refiners’ appetite for crude is climbing ahead of the peak driving season in July and August, “Refinery maintenance in the Atlantic basin will start to taper off, increasing oil demand (for refining)… Summer driving should provide some support,” BNP Paribas analyst told Reuters.
Global oil demand is expected to rise by 1.3 million barrels per day in the third quarter of the current year, up from an average of 104.51 million bpd in the second quarter, the IEA has predicted.
The 1 million bpd output increases announced by OPEC+ so far, coupled with another 400 kb/d increase in July, almost matches the predicted demand increase, implying oil markets will not face a surplus till late in the year.
Meanwhile, oil prices jumped in Thursday’s session after the Trump administration announced it has struck a trade deal with the UK. Brent crude for July delivery was up 2.7% to trade at $62.75/bbl at 12.50 pm ET while WTI crude contract for June delivery added 3.0% to change hands at $59.86 per barrel. However, terms of the deal appear to fall well short of the “comprehensive” package Trump earlier touted.
According to Trump, UK Prime Minister, Keir Starmer, will further reduce non-tariff barriers and fast-track U.S. goods into his country.
Meanwhile, another solid week of jobless claims underscored the Federal Reserve’s ongoing unwillingness to cut rates. U.S. jobless claims fell 13,000 to 228,000 for the period ending on May 3.
Continued claims, however, clocked in at just over 1.9 million, near the highest levels since 2021, suggesting workers are still finding it difficult to secure new jobs as the economy stalls.
That said, commodity analysts at Standard Chartered have predicted that path of least resistance for oil prices is lower in the coming months, with oil prices to remain low before beginning a gradual recovery later in the year as U.S. oil output declines.
StanChart, however, says there’s some technical support in the short-term, with fundamentals remaining fairly positive. Recently, StanChart cut its 2025 oil price forecast to $61/bbl from $76 and also lowered its 2026 forecast to USD 78/bbl from $85 citing Trump’s tariffs.