Oil
Nigeria Government to stop kerosene subsidy in 2014
ABUJA – There are indications that the Federal Government will stop kerosene subsidy in 2014 bringing to an end a scheme that has been widely criticised as corrupt and controversial.
Our correspondent learnt on Wednesday that no provision was made for kerosene subsidy in the N4.77tn 2014 budget proposal presented to the National Assembly by President Goodluck Jonathan.
Ministry of Finance sources, who gave the hint, said the budget proposal did not make any provision for kerosene subsidy.
The Federal Government spent N634bn to subsidise the retail price of kerosene in the past three years.
The Chairman, House Committee on Petroleum (Downstream), Mr. Dakuku Peterside, who recently condemned this as wasteful spending, also said N110bn was spent on kerosene subsidy in 2010, N324bn in 2011 and N200bn in 2012, which came up to N634bn in the three years.
He said, “In the year 2010, we spent N110,068,533,988 to subsidise kerosene. This is not the cost of kerosene but the cost of subsidising the product alone. In 2011, it got worse and the government spent N324,089,961,319 on kerosene subsidy. Although we have yet to reconcile this, we spent N200bn in subsidising kerosene in 2012.
“So, in three years, we have spent N634bn subsidising kerosene. This is one third of what we spend in a year on capital budget.”
Despite the huge spending on Kerosene subsidy, the masses could not, until recently, buy the product at the regulated price of N40.90k per litre.
They had settled for alternative sources of energy such as firewood, charcoal, sawdust, electricity and gas.
However, this has recently changed as the Nigerian National Petroleum Corporation, through the Independent Petroleum Marketers Association of Nigeria and the Depot and Petroleum Products Marketers Association, has been selling kerosene at N50 per litre.
Commenting on this, the President, Nigerian Liquefied Petroleum Gas Association, Mr. Dayo Adeshina, said it would be a welcome idea if kerosene subsidy could be stopped by the government.
He said, “Government needs to take a conscious decision to drive a mass shift from kerosene to LPG as it was done in Indonesia. The Indonesian government took a conscious decision to stop kerosene subsidy, which was gulping $9bn a year. They found that they would only need to invest $2bn in cylinder and cooking stoves to save $7bn.
“We need to get to that level when we will consciously shift from kerosene to LPG and that can only happen with the right government policy.”
Adeshina argued that the N634bn spent on kerosene subsidy had little impact on the masses, saying it enriched only a few people.
– THE PUNCH
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
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.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
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.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
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.