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N120bn Monthly Subsidy Burden

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4 years ago

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The Federal Government of Nigeria, through the Nigerian National Petroleum Corporation (NNPC) was quoted as crying out that the N120 billion monthly subsidy burden on petroleum products is too heavy to bear -Ref. The Tide: Friday 26 March, 2021. There is a proclamation known as “crying down credit” in police circle, whereby the Divisional Police Officer in a newly established police unit would warn the community in the neighbourhood not to grant any credit to any police officer of that unit. The idea is that the police authority would not be held liable for any breach of the proclamation. You give loan or credit at your own risk!
The purpose of this digression is that the people of Nigeria are being warned to expect a price increase in petroleum products. Usually, hike in the pump price of petroleum products is a ready means of raising money when the economy is biting harder. The logic of fuel subsidy expresses the endemic enigma in the oil and gas industry, with reference to perennial paralysis of the refineries and continued importation of fuel from abroad. Obviously, there is a clever system of parasitism, of which Nigerians demand to know the truth.
The ding-dong about proper pricing of petroleum products in Nigeria began with my late colleague, Professor Tam David-West, whereby the content value of Coca Cola bottle became a measure for the price of same volume of petrol. The issue of subsidy and proper pricing of petroleum products must be resolved once and for all without the shenanigans that feature in the old story. Who are the consumers of subsidised fuel and who is robbing or fooling who, to pay another?
The logic about Coke and petrol price equalisation was also applied in subsidising the cost of transportation of petroleum products across the country. A motorist in Eleme must buy fuel at the same price as another in Damaturu, which is another form of equalisation and quota policy. The cost of delivery of fuel is passed on to the public as collective tax. The most annoying aspect of the fuel subsidy issue is parasitism in the consumption pattern. Subsidy is defined as money paid by a government to make price lower, reduce the cost of production of goods, etc. but with fuel, it translates into indirect increase of taxation, to maintain a parasitic political economy.
Why must an innumerable number of government officials and political office holders, having several vehicles each, all fueled at public expense, also enjoy huge transport allowances? Why has there not been a public audit to determine if the issue of free fuel, coupled with transport and travelling allowances, are not being abused grossly? Nigerians are aware whereby transparency is thrown to the wind.
We have not faced the issues of corruption, deceit and transparency in governance with seriousness and honesty. Part of what the International Monetary Fund (IMF) demanded of Nigeria many years ago, included total removal of fuel subsidy. What was actually meant by fuel subsidy removal had to do specifically with excessive free fuel consumption by innumerable state and political office holders. It was the issue of transparency in governance, so that the public is not made to pay for the profligate life-style of state and political office holders.
For a long time, there had been a suspicion about possible foul play in the petroleum industry, with specific reference to endless excuses why the nation’s refineries cannot work effectively. The situation becomes even more annoying with the huge sums of money spent to revamp refineries from time to time. Yet importation of fuel into the country becomes a better option, with numerous abuses associated therewith. Neither is there any seriousness about creating enabling environment and policy for small-scale local refineries, of which there are several demands.
One Joseph Obele was quoted as saying that when the Port Harcourt Refinery is revamped, it would enhance the provision and availability of quality petroleum products. He went on to say: “It will make us have the best quality of products as against all the rubbish they are importing into Nigeria”. If revamping a refinery would be capable of creating employment for over 25,000 persons, according to the IPMAN chairman, then what is the jinx holding the nation in bondage!
Needless to revisit the issue that there are many predators and parasites within and outside Nigeria who have held this country hostage since 1970, with the oil and gas sector as their stronghold. But Nigeria would want to know why the nation’s security and intelligence network would not be able to come to the rescue of helpless Nigerian masses. Why must a great nation as Nigeria be held hostage by some faceless smooth operators? If the Nigerian masses are docile and helpless, there are some elite who are complicit or serving as willing accomplices of the predators and parasites.
The strategy of containing the Nigerian masses has been to use the forum of the nation’s lawmakers as a safety valve, to ensure a stability of the polity, through scandalous remunerations. When a senator gets emoluments estimated to be four times the salary of the President of the United States of America, then we must ask whose interests they are being paid to protect. With their known allowances as enumerated by an insider, the senators would not want to be deprived of what benefits they enjoy. These include free fuel extended to friends!
Removal of fuel subsidy would mean removing the hidden costs of maintaining the class of predators and parasites that the military installed for self-preservation purposes. The cry of government through the NNPC about the burden of spending N120 billion monthly as fuel subsidy, can be described as idiomatic “crocodiles’ tears”. It is what happens when an oligarchy is installed under the guise of a democracy. Those responsible for this structure would fight against any restructuring.
With the burden of spending N120 billion monthly as fuel subsidy, the NNPC should ask itself who are the free and insatiable consumers of petroleum products. Who is paying to support who in Nigeria? NNPC is advised to adopt the crying down credit or proclamation of the police, with respect to free consumption of fuel. Whoever consumes fuel must pay for it, rather than place a heavy burden on NNPC and on to the public. Nigerian masses have been bamboozled long enough!

Dr. Amirize is a retired lecturer from the Rivers State University, Port Harcourt.

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Renewable Energy Faces Looming Workforce Crisis

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3 weeks ago

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August 18, 2025

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Despite a discouraging political climate and unprecedented uncertainty in the United States clean energy sector, low costs of wind and solar energy continue to drive growth of the domestic clean energy sector.
However, while market forces continue to support the expansion of renewable energy capacity, the sector faces critical challenges extending beyond the antagonism of the Trump administration.
The continued growth of solar and wind power risks being hampered by several mitigating factors, including (but not limited to) intensifying competition over increasingly scarce suitable land plots, stressed and volatile global supply chains, lengthy and unpredictable development processes, Complex and overlapping permitting processes, and a critical talent gap.
The renewable energy labor shortage has been years in the making, but is no less closer to resolution. The issue spans both white collar and blue collar positions, and threatens to kneecap progress in the booming sector.
Between the years of 2011 and 2030, it is expected that global levels of installed wind and solar capacity will quadruple. Analysis from McKinsey & Company concludes that “this huge surge in new wind and solar installations will be almost impossible to staff with qualified development and construction employees as well as operations and maintenance workers.
“It’s unclear where these employees will come from in the future,” the McKinsey report goes on to say.
He continued that “There are too few people with specialized and relevant expertise and experience, and too many of them are departing for other companies or other industries.”
The solar and wind industries are suffering from a lack of awareness of career paths and opportunities, despite their well-established presence in domestic markets.
Emergent clean energies face an even steeper uphill battle. Geothermal energy, for example, is poised for explosive growth as one of vanishingly few carbon-free energy solutions with broad bipartisan support, but faces a severe talent gap and punishingly low levels of awareness in potential talent pools.
But while the outlook is discouraging, industry insiders argue that it’s too soon to sound the alarms. In fact, a recent report from Utility Drive contends that “solutions to the energy talent gap are hiding in plain sight.”
The article breaks down those solutions into four concrete approaches: building partnerships with educators, formulating Registered Apprenticeship pathways, updating credential requirements to reflect real-world needs, and rethinking stale recruitment strategies.
Targeting strategic alliances with educational institutions is a crucial strategy for creating a skilled workforce, particularly in emerging sectors like geothermal energy.
Businesses can, for example, partner with and sponsor programs at community colleges, creating a pipeline for the next generation of skilled workers. Apprenticeships serve a similar purpose, encouraging hands-on learning outside of the classroom. Such apprenticeships can apply to white collar positions as well as blue collar roles.
“If we can figure out a way to educate the younger generation that you can actually have a career that you can be proud of and help solve a problem the world is facing, but also work in the extractive industry, I think that could go a long way,” said Jeanine Vany, executive vice president of corporate affairs for Canadian geothermal firm Eavor, speaking about the geothermal energy talent gap.
These approaches won’t solve the talent gap overnight – especially as political developments may discourage would-be jobseekers from placing their bets on a career in the renewables sector. But they will go a long way toward mitigating the issue.
“The clean energy transition depends on a workforce that can sustain it,” reports Utility Drive. “To meet the hiring challenges, employers will benefit from looking beyond the next position to fill and working toward a strategic, industry-wide vision for attracting talent.”
By: Haley Zaremba
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Is It End For Lithium’s Reign As Battery King?

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1 month ago

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August 1, 2025

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Lithium-ion batteries power the world around us. Their prevalence in our daily life is growing steadily, to the extent that lithium-ion batteries now power a whopping 70 percent of all rechargeable devices.
From electric vehicles to smartphones to utility-scale energy storage, lithium-ion batteries are increasingly forming the building blocks of innumerable sectors.
But despite its dominance in battery technologies, there are some serious issues with lithium supply chains that make it a less-than-ideal model upon which to base our world.
Not only is extracting lithium often extremely environmentally damaging, it’s deeply intertwined with geopolitical pressure points. China controls a huge portion of global lithium supply chains, rendering markets highly vulnerable to shocks and the political will of Beijing.
China’s control is particularly strong in the case of electric vehicle batteries, thanks to a decade-long strategy to outcompete the globe.
“For over a decade, China has meticulously orchestrated a strategic ascent in the global electric vehicle (EV) batteries market, culminating in a dominance that now presents a formidable challenge to Western manufacturers,” reports EE Times.
The effect functions as “almost a moat” around Chinese battery production, buffering the sector against international competition.
The multiple downsides and risks associated with lithium and lithium-ion battery sourcing is pushing EV companies to research alternative battery models to power the electric cars of the future.
There are a litany of lithium alternatives in research and development phases, including – but not limited to – lead, nickel-cadmium, nickel-metal hydride, sodium nickel chloride, lithium metal polymer, sodium-ion, lithium-sulfur, and solid state batteries.
Solid state batteries seem to be the biggest industry darling. Solid-state batteries use a solid electrolyte as a barrier and conductor between the cathode and anode.
These batteries don’t necessarily do away with lithium, but they can eliminate the need for graphite – another critical mineral under heavy Chinese control. Plus, solid state batteries are purported to be safer, have higher energy density, and recharge faster than lithium-ion batteries.
While solid-state batteries are still in development, they’re already being tested in some applications by car companies. Mercedes and BMW claim that they are already road-testing vehicles powered by solid-state batteries, but it will likely be years before we see them in any commercial context.
Subaru is on the verge of testing solid-state batteries within its vehicles, but is already employing a smaller form of the technology to power robots within its facilities.
However, while solid-state batteries are being hailed as a sort of holy grail for battery tech, some think that the promise – and progress – of solid-state batteries is overblown.
“I think there’s a lot of noise in solid state around commercial readiness that’s maybe an exaggeration of reality”, Rivian CEO RJ Scaringe said during an interview on this week’s Plugged-In Podcast.
Sodium ion batteries are also a promising contender to overtake lithium-ion batteries in the EV sector. Sodium is 1,000 times more abundant than lithium.
“It’s widely available around the world, meaning it’s cheaper to source, and less water-intensive to extract”, stated James Quinn, the CEO of U.K.-based Faradion. “It takes 682 times more water to extract one tonne of lithium versus one tonne of sodium.That is a significant amount.”
Bloomberg projections indicate that sodium-ion could displace 272,000 tons of lithium demand as soon as 2035.
But even this does not signal the death of lithium. Lithium is simply too useful in battery-making. It’s energy-dense and performs well in cold weather, making it “indispensable for high-performance applications” according to EV World.
“The future isn’t lithium or sodium—it’s both, deployed strategically across sectors…the result is a diversified, resilient battery economy.”
By: Haley Zaremba
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Why Oil Prices Could See Significant Upside Shift

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1 month ago

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July 28, 2025

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The 9th OPEC International Seminar was held in Vienna recently, wherein participants discussed energy security, investment, climate change, and energy poverty, with a particular emphasis on balancing these competing priorities.
According to commodity analysts at Standard Chartered, the summit, titled “Charting Pathways Together: The Future of Global Energy”, featured significantly greater engagement from international oil companies and consuming country governments, with discussions converging on a more inclusive shared agenda rather than non-intersecting approaches seen in previous years.
However, StanChart reported there was a clear mismatch between what energy producers vs. market analysts think about spare production capacity.
Unlike Wall Street analysts, who frequently talk about spare capacity of 5-6 million barrels per day (mb/d), speakers from several sectors of the industry noted that spare capacity is both limited and very geographically concentrated.
StanChart believes this erroneous assumption about spare capacity has been a big drag on oil prices, and the implications for the whole forward curve of oil prices could be potentially profound once traders realize that roughly two-thirds of the capacity they thought was available on demand does not actually exist.
This makes the analysts bullish about the general shape of their forecast 2026 price trajectory (Figure 32), i.e., a set of significant upward shifts as opposed to the flat trajectory seen in the market curve and in analyst consensus.
In other words, oil prices could have as much as $15/barrel upside from current levels.
StanChart is not the only oil bull here. Goldman Sachs recently hiked its oil price forecast for H2 2025, saying the market is increasingly shifting its focus from recession fears to potential supply disruptions, low spare capacity, lower oil inventories, especially among OECD countries and production constraints by Russia.
GS has increased its Brent forecast by $5/bbl to $66/bbl, and by $6 for WTI crude to $63/bbl, slightly lower than current levels of $68.34/bbl and 66.24/bbl for Brent and WTI crude, respectively.
However, the Wall Street bank has maintained its 2026 price forecast at $56/bbl for Brent and $52 for WTI, due to “an offset between a boost from higher long-dated prices and a hit from a wider 1.7M bbl/day surplus.’’ Previously, GS had forecast a 1.5M bbl/day surplus for the coming year.
Further, Goldman sees a stronger oil price rebound beyond 2026 due to reduced spare capacity.
EU natural gas inventories have climbed at faster-than-average clip in recent times. According to Gas Infrastructure Europe (GIE) data, Europe’s gas inventories stood at 73.10 billion cubic metres (bcm) on 13 July, good for a 2.31 bcm w/w increase.
Still, the injection rate is not enough to completely fill the continent’s gas stores, with the current clip on track to take inventories to about 97.9 bcm, or 84.3% of storage capacity, at the end of the injection season.
Europe’s gas demand remains fairly lacklustre despite extremely high temperatures across much of the continent in recent weeks.
According to estimates by StanChart, EU gas demand for the first 14 days of July averaged 583 million cubic meters/day, nearly 3% lower from a year ago but a 10% improvement from the June lows.
However, StanChart is bullish on natural gas prices, saying the market is likely underestimating the likelihood of more Russian gas being taken off the markets.
Back in April, U.S. senators Lindsey Graham (Republican) and Richard Blumenthal (Democrat), introduced “Sanctioning Russia Act of 2025”, with the legislation enjoying broad bipartisan support (85 co-sponsors in the Senate out of 100 senators).
In a joint statement on 14 July, the two senators noted that President Trump’s decision to implement 100% secondary tariffs on countries that buy Russian oil and gas if a peace agreement is not reached within 50 days but pledged that they will continue to work on “bipartisan Russia sanctions legislation that would implement up to 500 percent tariffs on countries that buy Russian oil and gas”.
StanChart has predicted that the Trump administration is unlikely to take actions that risk driving oil prices higher. However, Russian gas remains in the crosshairs, with U.S. LNG likely to see a surge in demand if Russian gas exports are curtailed.
StanChart estimates that the EU’s net imports of Russian pipeline gas averaged 79.8 million cubic metres per day (mcm/d) in the first 14 days of July, with all non-transit flows into the EU coming into Bulgaria through the Turkstream pipeline, with Hungary and Slovakia also receiving Turkstream gas.
There was also a flow of about 65 mcm/d of Russian LNG in the first half of July, with Russia providing 18.6% of the EU’s net imports. StanChart has predicted that we could see a strong rally in natural gas prices if Washington slaps Moscow with fresh gas sanctions.
By: Alex Kimani
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