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Nigerian politicians profit from oil theft – Wikileaks

Published

13 years ago

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Peter Obi’s Candidature Only Threaten PDP Not APC - Ganduje

Nigeria’s political elite and the military have profited from large scale oil theft in the Niger Delta which may cost the country up to a tenth of its production, according to a U.S, cable leaked by Wikileaks.

Iran to return oil output to pre-sanctions levelThe report further stated that Nigeria is the world’s eighth biggest exporter of crude oil but thieves take a sizeable proportion of its output by drilling into pipelines or sometimes hijacking barges loaded with oil, a type of theft known locally as bunkering.

According to the U S Consul General, Donna M. Blair, Oil theft, widely referred to as illegal bunkering in Nigeria, represents significant economic activity with serious ramifications for Nigeria’s economy, security, democracy and environment,

“No other major oil-producing country loses as much revenue from illicit oil bunkering as Nigeria largely because the political elite, militants, and communities profit from such operations,” Blair added.

“Nigerian officials repeatedly request U.S. assistance to prevent bunkering. The reality, however, is that most oil bunkering is not a global phenomenon readily susceptible to international deterrence, but a largely Nigerian development that requires domestic resolution,” the cable said.

Read also: Iran to return oil output to pre-sanctions level

Wikileaks also suggested that a Joint Military Task Force, JTF, tasked with quelling militancy in the Delta at the time was also involved, adding that, it even likened the JTF and the militants to rival drug gangs.

“Some observers compared the relationship between the JTF and major militant groups to arrangements between rival gangs in U.S. urban areas; generally each JTF unit and militant band had its own territory in which they operated and from which they derived their illicit incomes,” it said.

Read also: 2023: APC will deploy collusive rigging during presidential election – Deji Adeyanju alleges

“Profits from illegal bunkering became high enough in the last several years to enable both JTF members and militants to profit and co-exist without seriously interfering with each other’s activities. Fighting only erupted when disputes arose about boundaries.”

Some estimates say 100,000 barrels of crude are stolen from the Niger Delta each day, about five percent of the country’s crude production. The cable suggested it may even be more.

“Various experts have estimated the volume of oil theft at between 100,000 and 250,000 barrels per day or as much as 91 million barrels per year. This amounts to billions of dollars in lost revenue for the Nigerian treasury every year,” it said.

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Oil

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

Published

3 days ago

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September 26, 2024

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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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Business

Dangote not truthful on petrol prices in Saudi Arabia- Findings

Published

3 days ago

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September 26, 2024

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Fresh findings have revealed that the Founder of Dangote Refinery, Alhaji Aliko Dangote may have lied on live bloomberg interview while  asserting that petrol pump price was 40 percent higher in Saudi Arabia than in it is in Nigeria.
The billionaire, who said this in an interview with Bloomberg, claimed that the product is 40% cheaper in Nigeria than in the Kingdom of Saudi Arabia, known as the second largest producer of crude in the world, with about 9 refineries.
The imbalance of this statement prompted several checks by multiple platforms and organisations, including Biztellers.com.ng, which launched a review of the billionaire’s statement during his recent bloomberg live interview.
Biztellers.com.ng findings reveals that a gallon of petrol currently sells for US$2.48 which when divided into 4 liters accordingly, comes down to US$0.62, and when converted to naira at the open market rate of N1,670 comes down to N1,036 a liter, this is against the current average pump price in Nigeria is about N1100 especially in the far north.
Lagos based online publication, Platform Africa, using data from Saudi Arabia and other reputable global statistic websites and online platforms showed that the claim by the Nigerian oil mogul is wrong.
For instance price tracking sites like statista, and tradingeconomics showed that petrol was actually more expensive in Nigeria than in Saudi Arabia as of today, Wednesday, September 25, and the day the billionaire made the statement.
PMS in Saudi is sold for 2. 33 Saudi Riyal equivalent to 62 cents / litre according to tradingeconimics while the PMS Average price in Nigeria is N1100/litre that is about 67 cents/litre, using the present exchange rate of Naira to dollar.
In Russia, the price per litre of petrol is 64 cent while it goes for 65 cent in Indonesia.
How 63 cent per litre in Saudi is 40% cheaper compared to 67 cent per litre in Nigeria will be left for Africa’s richest man to explain.
However, based on the verifiable figures by the petrol product price tracking institutions, Mr. Dangote is not correct.
PMS is more expensive in Nigeria than in Saudi as of today, Wednesday, September 25, 2024.
Beyond this, an earlier report by Bloomberg showed that contrary to claim by the billionaire on need for Nigeria to totally end petrol subsidy, Saudi Arabia spends $7,000 per person on energy subsidies, highest in G-20 economies.
The kingdom’s total spending on fuel subsidies soared over the past two years, hitting the highest among the Group of 20 economies on a per capita basis, the Bloomberg report has shown.
This, which came amid the harsh impact of petrol subsidy removal by the Bola Tinubu administration, which has cited the unsustainable nature of the decades-long payments, also punctured the claims by Alhaji Dangote that the Nigerian government has to hand over totally from subsidising petrol for its citizens
In 2022, Nigeria spent about $10 billion for the purpose.
The report published in 2023 indicated that Saudi Arabia spent almost $7,000 per person, equivalent to about 27 per cent of economic output, across both explicit and implicit energy subsidies, according to a paper published by the International Monetary Fund (IMF).
Fossil fuel subsidies soared globally since 2020 to $7 trillion last year as governments took measures to protect consumers and businesses from a spike in prices following Russia’s invasion of Ukraine, according to the IMF paper.
It estimated that cutting fossil fuel subsidies could help reduce carbon dioxide emissions, deaths from air pollution, and boost government revenues.
“Fossil fuels in most countries are priced incorrectly,” Simon Black, Antung Liu, Ian Parry and Nate Vernon wrote in the IMF working paper. “Unfortunately, current prices are routinely set at levels that do not adequately reflect environmental damages and, in some cases, not even supply costs,” they added.
China-which spent $2.2 trillion – was the biggest provider of subsidies in absolute terms, followed by the US and Russia, according to the IMF. Saudi Arabia spent a total of $253 billion on subsidies last year, it added.
The IMF has been urging Saudi Arabia to push ahead with measures to cut the government subsidy bill and take steps to protect the welfare of low-income households through increased and targeted social spending. The spending has made Saudi fuel one of the cheapest in the world.
In 2021, the government set a cap for the domestic cost of gasoline to soften the impact of higher living costs on citizens, just months before prices soared to over $100 a barrel.
In its Article IV Consultation, the IMF said that the kingdom’s work on subsidy reforms is “continuing unabated through planned step price increases that will lead to their elimination by 2030.”
Implicit subsidies, which the IMF defined as undercharging for the environmental cost of fossil fuel burning and lost tax revenue, made up the bulk of the global total. Explicit subsidies, or selling fuels as below supply costs, had a share of just 18 per cent.
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Oil

Why Dangote’s PMS Prices Can’t Be Reduced In Nigeria – Adeoye

Published

1 week ago

on

September 20, 2024

By

It is no longer news that Nigeria reached a major milestone with the launch of the Dangote Refinery, allowing the country to produce its own petrol instead of importing it.

Consequently, Nigerians expected fuel prices to drop, which would help lower the rising costs of goods caused by the high price of petrol, but that has not been the case.

Recall that the first batch of PMS from the Dangote Refinery hit the market on Sunday as promised by the federal government.

However the smiles on Nigerians faces quickly wore off and their hope on the refinery for a reduced fuel price after recent increment of pump price was dashed with the price sold to the Nigerian National Petroleum Company Limited (NNPC Ltd).

Many Nigerians who had anticipated a lesser price compared to the present market price of between N855 and N950 were jolted when the NNPC Ltd released a price template for the stock received from the refinery.

READ MORE: Cab Driver Threatens Legal Action After Adunni Ade Accuses Him of Package Theft

By implication, the price of Dangote PMS is over N100 costlier than the existing market price from NNPC retail stations and other major stations which has caused more fumes and complains by Nigerians.

Shedding light over the issues surrounding petrol price, an energy policy analyst, Yemi Adeoye while speaking on Friday at TVC Business News explained why PMS cannot be sold at lesser price by Dangote.

Adeoye explained that the NNPC is not the regulator of PMS if not an official announcement should have been made instead of Dangote’s instead NNPC is operating as a joint venture with Dangote like it is with every other international oil operating companies in Nigeria, which has come down to the relationship between Dangote Refinery and the NNPC. NNPC supplies Dangute crude oil, while the latter come back with refined PMS.

He also noted that the average price for gas everywhere in the world as well as U.S. is $3.33 in gallons, which amounts to N5,279 in Naira. He explained that a gallon is 4 liters and breaking it down per liter is N1,019.75, which Dangote would have been selling their PMS if allowed to function as a business entity. Therefore, the normal price should have been nothing less than N1,300 per liter without the regulation.

Explaining further, Adeoye said, “Nigeria produces crude oil but refining it requires several steps. First, crude oil must be extracted, which necessitates the use of an oil rig. The cheapest oil rig available costs around $100,000 to $150,000 per day. These factors, among others, contribute to the pricing of Premium Motor Spirit (PMS) because it is an international commodity.” while noting that Dangote would not have announced the price without the regulation of the NNPC.

Adeoye said the commitment of NNPC towards this is supplying crude oil to Dangote in naira instead of dollars which is fair.

“If Dangote should sell PMS as it should, it will be nothing less than N1300. The united state is the highest producer of crude oil with 32 refinaries and sells at N1,319 per liter talkless of Nigeria who owns just one refinary, he added.

Finally, Adeoye said PMS hike is a global phenomenal and it is affecting everything.

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