Oil
Why Kerosene is sold Beyond Official Price – NNPC
…Implores Consumers to Switch to Cooking Gas
…Reassures adequate Supply of PMS in Lagos, Environs
ABUJA – The Management of the Nigerian National Petroleum Corporation, NNPC, has said that diversion of kerosene to neighbouring countries, industrial use, aviation fuel, sharp practices by middlemen and pipeline vandalism are reasons why kerosene is not readily available for domestic consumption.
Group Managing Director of the Corporation Engr. Andrew Yakubu made this disclosure Tuesday during the two-day investigative public hearing on supply, distribution, expenditure and subsidy on kerosene.
Engr. Yakubu maintained that due to a number of issues ranging from incessant pipeline vandalism and diversion of the product to road construction, the product which is meant for the masses is not readily available.
“There are quite a number of competing demands for kerosene and until these are addressed by other relevant agencies, the issue of kerosene not being readily available for domestic use will continue to reoccur every now and then. The way out is for this committee to collaborate with the NNPC to encourage the sale of liquefied petroleum gas otherwise known as cooking gas,” Engr. Yakubu quipped.
He informed that already the NNPC has stepped up the supply of LPG from 65,000 metric tonnes in 2011 to 250,000 metric tonnes in 2013 stressing that the target is to grow the consumption of the product to 500,000 metric tonnes by the end of 2014.
The NNPC helmsman stated that the increase in the consumption of cooking gas will go a long way to reduce the dependence on kerosene which will in turn help in the redistribution of kerosene to those who may still want to consume it.
Responding to a question on whether kerosene subsidy is still in place, the NNPC GMD said that was exactly what he met when he assumed office in June 2012 adding that kerosene subsidy is funded by unrealizable revenue flow. “The NNPC takes crude at international price and sells it at the domestic market at regulated price of N50 per liter,” he stated.
Answering a question on what the NNPC is doing to stop kerosene diversion, the NNPC helmsman said that the Corporation does not have the power to police marketers and sanction them adding that there are statutory bodies with the responsibility.
Commenting on the legality of kerosene subsidy, the NNPC Company Secretary, Anthony Madichie citing Petroleum Act section 6 subsection 1 said only the Minister of Petroleum Resources has the authority to fix petroleum product prices stressing that if a presidential directive is given and not gazetted, such directive will not be effective.
In his submission to the committee, the Managing Director of the Pipelines and Products Marketing Company, PPMC, a subsidiary of the NNPC, Prince Haruna Momoh informed that kerosene is sourced for the Nigerian market through importation and domestic refining adding that Dual Purpose Kerosene is sold to coastal marketers, Major Marketers Association of Nigeria, MOMAN, Depot and Petroleum Products Marketers Association, DAPPMA and NNPC Retail.
“I can confirm to this committee the statistics for the supply of DPK is as follows. In 2010, NNPC supplied 2,515,582.44 metric tonnes of DPK, in 2011, NNPC 1,922,263.56 metric tonnes, in 2012, NNPC supplied 2,622,843.20 metric tonnes and in 2013, NNPC supplied 2,671,747.97 metric tonnes making a total of 9,732,437.17 metric tonnes,” Prince Momoh revealed.
In his keynote address, the Speaker of the House of Representatives, Hon. Aminu Tambuwal represented by the Deputy Speaker, Hon. Emeka Ihedioha said the investigative hearing is aimed at finding a lasting solution to kerosene scarcity in the country.
Presiding over the investigative hearing, the Chairman of the House of Representatives Committee on Downstream, Hon. Dakuku Peterside said the hearing was not to witch hunt any agency but to work out modalities to ensure that kerosene is bought at the official pump price by the masses
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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