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Fuel scarcity looms in Nigeria again, as Major oil marketers warns FG over unpaid subsidy

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By Kunle Kalejaye
 
Strong indications have emerged that the ongoing fuel scarcity currently affecting Nigeria’s Federal Capital Territory, Abuja and some parts of Lagos is expected to spread across the length and breath of the country anytime from this week.
fuel scarcityThe spread of the scarcity as gathered is as a result of the Federal Governments inability to fulfil it’s obligation to oil marketers before the end of March,2015. The Government had assured marketers earlier in the year that their outstanding subsidy allowance of N256.2 billion which has truncated their ability to import fuel into the country
The Executive Secretary of Major Oil Marketers Association of Nigeria, MOMAN, Mr. Obafemi Olawore said the country would feel the full impact of the scarcity from today, Monday, if it’s members current depleting stock in Apapa depot is not replenished urgently.
Olawore further stressed that  it’s members current fuel stock can sustain the country for only three and half  days starting from Friday April 24, 2015.
With this development, the MOMAN scribe  stated that very soon marketers will have to rely heavily on Nigerian National Petroleum Corporation, NNPC to supply product to the entire country but added that there is always a problem when supply is left entirely with NNPC.
The ripple effects of the huge amount the federal government is owning oil marketers according to Dr.Olawore is enormous and capable of crippling the operations of the downstream sector of Nigeria’s petroleum industry.
The effects ranges from gradual halt of transportation of petroleum products to all parts of the country, ability of individual members to care for their staff welfare and expand their retail outlets operations among others. 
 
‎He also stated that oil marketers are currently owning transporters the sum of N20 billion due to the money government is owning them saying “importation is coming to a halt, our suppliers are on our neck, we are owing transporters, we are bleeding.”

Giving a break-down of the amount the government is owning marketers, Olawore said “our outstanding foreign exchange plus interest is N252,868,237,459 but part of the foreign exchange which is N37 billion has been paid. We are now left with N215,868237,459. 
 
“In addition government still owe our members batch ‘T’ in 2014 which is N21,920,240,908.23 and batch ‘U’ also in 2014 N8,607,109,593.82. 
 
“In 2015 government owed us batch ‘A’ which is N6,873,232,365.66 and batch ‘B’ N2,911,139,639.70. Our grand total therefore is N256,179,959,966.41. 
 
Reacting to claims that NNPC has sufficient product that will sustain the country for more than 20 days, Olawore said with specific location they should name where products are available.
 
He said that the NNPC‎ spokesman who is not an operations person should come clear and tell the country where products are located. 
 
Biztellers also gathered that aside from the N256.2 billion outstanding foreign exchange and interest differential, there is another N100 billion which is due to mature at the end of this month. 
 
Olawore said he is confident that the N100 billion would be ready by the end of the month noting that the money has been treated with a post dated Sovereign Debt Note, SDN which covers batches ‘N’ to ‘S’. 
 
He however lamented that majority of Nigerian banks have refused to honour the SDN given to marketers by the ministry of Finance citing the nature of the SDN which is post date for not honouring it. 
 
Despite its post dated nature, Olawore is optimistic that N100 billion would be ready by the end of the month but will not be enough to cushion the impending nation-wide scarcity in the country‎. 
 
In a letter dated 13th of April, 2015 addressed to the Coordinating Minister for the Economy/Honourable Minister of Finance, MOMAN noted that financial institutions have put a hold on extending further import credits lines to its members as a result of the amount due and it’s members are unable to finance imports out of their own cash flow. 
 
‎The letter also stated that marketers are unable to meet other relevant obligations like payment of transporters due to cash flow constraints from long over due payment and if the matter is not promptly addressed in the very immediate future, it members would be forced to streamline overhead costs and their work force may be impacted. 
 
According to the letter, MOMAN appealed to the Ministry of Finance to pay the authorized marketers that have been cleared by PPPRA with SDN all outstanding principal sums. 
 
MOMAN also appeal to the ministry of finance that all ancillary burdens such as interest and forex differential incurred by the marketers as a results of the late payment be immediately reimbursed. 
 
The association also appealed to the Ministry for relevant Government Agencies vested with the authority to administer the PSF scheme to honour the sanctity of the SDN and the 45 days payment deadlines. 
 
MOMAN urged the minister of finance to intervene urgently to their appeals as the remaining working days are crucial to its members capacity to continue with their operations.  

Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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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.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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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.

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Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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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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