Oil & Energy

Nigerians Want FG To Discontinue Fuel Subsidy Payment

Published

10 years ago

June 29, 2015

L-R: National President, Independent Petroleum Marketers Association of Nigeria (ipman), Chief Obasi Lawrence, Permanent Secretary, Ministry of Petroleum Resources, Mr taiye Haruna, Executive Secretary, Major Oil Marketers Association of Nigeria (moman), Mr Obafemi Olawore and representative of the Group Managing Director of nnpc, Dr David Ige, at a stakeholders meeting to address the current petrol scarcity tagged: petrol queues must go, in Abuja, recently. Photo: NAN

A cross section of Nigeri
ans on Wednesday urged the Federal Government to discontinue its subsidy payment policy to marketers importing fuel.
The respondents told newsmen in Lagos that removal of petroleum subsidy would be good for Nigeria’s prosperity.
The Director, Centre for Bee Research and Development, Mr Bidemi Ojelewe, said that the controversy about the fuel subsidy payments was demoralising to the populace, and noted that the country’s economy would rapidly develop and prosper if normalcy reigned over subsidy payments to marketers.
“Removal of fuel subsidy is inevitable if our government wish to meet the pressing anticipation of the masses,’’ he said.
Prof. Michael Akur, who lectures at the Department of Political Science, University of Jos, said: “The discontinuance of subsidy on fuel consumption will reduce the inflationary pressures our economy is facing.
“We should have a departure of the subsidy era as soon as possible.
“This departure is necessary because our economy has not grown in the manner it ought to.
“This economy will not progress if government continue to subsidise consumption of commodities such as fuel and the likes,’’ he said.
A civil servant, Mr Shuaibu Yusuf, urged the Federal Government to scrap the programme of fuel subsidy payment and disburse funds earned by such scrapping to revamp the power sector.
“Our power sector is one area that needs more funds to be revamped.
“The money realised from the stoppage of subsidy payment should go into solving other challenges in other sectors.
“Government should introduce a modern mass transit scheme across the country so that ordinary citizens will not fill the impact of subsidy removal if eventually done,’’ he said.
A proprietor of a medium-size enterprise in Lagos, Mr Akeem Ogidan, said that the Federal Government policy to part finance cost of fuel consumed by Nigerians was not sustainable.
Ogidan, the Chief Executive Officer, Tanke Paper Mills, said that governments at all levels needed to pursue policies that would save and earn for them more money.
He also noted that to continue the fuel subsidy policy in era of declining oil prices in the international market would worsen Nigeria’s economy.
“We must get rid of the subsidy scheme especially in this dispensation where austerity is been experienced in virtually all states in the Nigerian federation.
“Almost half of the state governors cannot pay salaries and the reality is that the need of sustaining the subsidy is not tenable,’’ Ogidan said.
According to the Nigerian Extractive Industries Transparency Initiative (NEITI), the federal government spent a whopping N4.5 trillion on fuel subsidy claims between 2006 and 2012.
An economist, Mr Bismarck Rewane, has also advised the Federal Government to remove the fuel subsidy on petroleum products for speedy development of the country.
Rewane, the Managing Director of Financial Derivatives Limited, made the call in a lecture on “The Nigerian Economy and Business Outlook”.
He delivered the lecture at the Annual General Meeting of the International Chamber of Commerce Nigeria in Lagos on Thursday.
Rewane said that the subsidy regime was fraught with corruption and gains from subsidy removal should be utilised for projects that would develop the nation as against enriching few Nigerians.
He said that subsidy removal would reduce the country’s huge debt profile, block government leakages and aid rehabilitation of refineries and depots in the country.
According to him, the falling global crude oil price which has caused a dip in the nation’s revenue necessitated a stop to fuel subsidy payment.
“If the government does not remove the fuel subsidy, the subsidy payment will cripple the economy of the country, “Rewane said.
He said that the removal of fuel subsidy would reduce government’s financial burden and drive the growth of the economy.

Oil & Energy

TotalEnergies, Conoil Sign Deal To Boost Oil Production

Published

5 days ago

November 24, 2025

The Tide

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”.

Oil & Energy

“COP30: FG, Brazil Partner On Carbon Emissions Reduction

Published

5 days ago

November 24, 2025

The Tide

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.

Oil & Energy

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

Published

5 days ago

November 24, 2025

The Tide

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.