Oil
PPPRA to publish list of accredited products’ suppliers
LAGOS – Petroleum Products Pricing Regulatory Agency, PPPRA, is set to publish a list of accredited international companies that supply Nigeria with refined petroleum products, as part of ongoing measures to sanitise and streamline downstream operations.
The list, which has been compiled and awaiting ministerial approval, may contain about 20 companies comprising both local and foreign companies, which either lift crude or supply refined products.
Accordingly, all marketers or trading companies wishing to import refined petroleum products under the Petroleum Support Fund, PSF, are expected to do so through the accredited companies for proper documentation and reimbursement.
Confirming the development in Lagos, yesterday, the Executive Secretary, PPPRA, Mr. Reginald Stanley, who could not confirm the exact number of participants, as it was still awaiting approval and therefore, subject to change, however, threatened to sanction any supplier who slips from the code of conduct upon the publication of the list.
Among the companies that would likely make the list are Trafigura Beheer BV, Vitol Group, Glencore International, Talaveras Group, Santana Oil, all which have been Nigeria’s trading partners over the years, while the local companies may include Sahara Group, Oando Group, and a host of many others.
Reginald said the accreditation is meant to not only ensure accountability in products distribution, but also to hold the companies responsible for any malpractice in the course of their operations in the country.
He said, “This is actually to ensure that these marketers actually exist. As soon as we get the approval, PPPRA will not pay any marketer that refuses to patronise the approved international oil suppliers. We want our marketers to be dealing with international companies that are credible.”
He explained that the move became necessary following the corruption that engulfed the PSF through almost N3trillion were paid to marketers in 2011, many of whom were phantom operators.
Through the PSF scheme, marketers were reimbursed with subsidy for the price differentials between the landing cost and the pump prices of regulated products, but the abuse of the system as uncovered by various subsidy probes instituted by government in 2012, called the need for a re-assessment of the scheme pending the full deregulation of the downstream sector.
The PPPRA boss also said that upon approval, the participants would be read the riot act, stipulating the Code of Conduct, adding that the Agency expected all marketers in the country to comply with the directives or be delisted.
According to him, “We had a long list of suppliers, and by the time we whittled them down, using very stringent criteria, we came to an acceptable number, which would not be more than 20 companies.”
He added that apart from being accredited, the companies will also sign a bond that would hold them accountable for any misdeed.
Stanley further disclosed that the international suppliers and local banks financing the marketers have been notified that they will be held accountable for any discrepancy discovered in the course of the operations. “Hence the suppliers are required to confirm independently to PPPRA, the quantity supplied to each marketer. Once you are told you cannot perform, immediately you and your company will be delisted.”
Crashing subsidy payments
Stanley envisaged that the accreditation of suppliers will further crash the cost of subsidy paid by the Federal Go0vernment, noting that subsidy fell from N2.9trillion in 2011 to a little over N1trillion in 2012 and attributed the fall to the followings:
Pump price increase of petrol from N65 to N95 per litre
Fall in volume by 23 percent from 60 million litres per day to 40 million/L/d
Pruning of the number of products importers by 67 percent from 128 to 38 companies
Specifically, he said, “In terms of quantity, the average daily provisional Premium Motor Spirit (PMS) supply of 38.298 million per day was recorded as at March 2013. This is 36.41 per cent lower than the PMS daily supply of 60.259 million litres per day for the year 2011.”
Stanley added that the agency has also introduced the 3-3-2 structure used by independent inspectors to validate vessel arrival, discharge of products into shore tanks and truck-out from the storage depots that received from the vessel.
Furthermore, he said these have enhanced the Nigerian Content initiative of the Federal Government by encouraging indigenous participation through the ownership of the downstream facilities. There has also been stability in the supply and distribution of petroleum products across the country, thereby bringing an end to the perennial queues.
He said that the agency has also ban cargo from storage tanks in West African coasts except from refineries to eliminate round tripping.
He stated: “We now also require banks to validate sales with bank statements for 3rd party discharge. We also engage in pre-qualification of suppliers to ensure that only credible and professional suppliers engage in the business.
“We have also introduce and ensure the enforcement of the submission of letter of credit, Form M, proforma invoice, certificate of origin of the cargo, Bill of Lading of the Mother Vessel, certificate of quantity of the Mother Vessel, On-board Arrival Quantity, Remain on Board Quantity after each ship-to-ship transfer, final Remain on Board or Empty Tank Certificate of Mother Vessel.”
In addition, the Agency introduced the traders/suppliers initiative in the form of a technical audit of suppliers of Premium Motor Spirit into the Nigerian market, which is expected to take off in the first quarter of 2013. “Under the initiative, only pre-qualified traders will be allowed to supply products to the Nigerian market.”
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.