Business Bells

Blog

  • FG Punishing Nigerians For Its Failure To Make Refineries Work – Economist

    FG Punishing Nigerians For Its Failure To Make Refineries Work – Economist

    A professor of Economics at the Olabisi Onabanjo University, Sherrifdeen Tella, said government should not punish citizens.

     

    He said, “It is not fair. Personally, I do not believe in subsidy because the subsidy they say they’re paying, they are just making money out of it. I think what is important is for us to have our refineries working, rather than we talking about adjusting prices because we are importing refined fuel.

     

    “The government is supposed to bear the brunt of not doing what is right by producing refined fuel for us to buy. The government should have a way of punishing itself rather than punishing the citizens.

     

    An economist and Senior Lecturer, Lagos Business School, Dr Bongo Adi, said it was a bad time for a fuel price hike.

     

    According to Adi, Nigerians are facing social and economic challenges imposed on them by the government and an increase in the pump price of fuel will further drive more Nigerians into poverty and misery.

     

    He said, “From all around, the Nigerian citizens are facing enormous risk to their livelihood, to their safety and of course to their health, owing to the coronavirus pandemic. The times have never been worse than it is right now in 2021.”

     

    A former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, said the government should know the challenges facing Nigerians in the COVID-19 period as prices of goods and services had gone so high.

  • TUC Tackles Petroleum Minister As FG Says Nigerians Should Prepare For Fuel Hike Pains

    TUC Tackles Petroleum Minister As FG Says Nigerians Should Prepare For Fuel Hike Pains

    The Trade Union Congress on Tuesday took a swipe at the Minister of State for Petroleum Resources, Chief Timipre Sylva, who told Nigerians to prepare for the pain associated with the increase in crude oil price.

     

    Also, the Manufacturers’ Association of Nigeria, the Lagos Chamber of Commerce and Industry and other stakeholders on Tuesday advised the Federal Government to use rising revenue from crude oil to tackle poverty and drive an all-inclusive growth.

     

    The groups stated this in separate interviews with The PUNCH while reacting to a statement by Sylva, who earlier on Tuesday warned Nigerians to expect benefits and pain from the rising price of crude oil in the world market.

     

    For Nigeria, which relies on crude oil for about 50 per cent of government revenues and over 90 per cent of export earnings, rising oil price means increased revenue.

     

    On the other hand, rising oil price also translates to increased cost of petroleum products as the country depends heavily on imports due to a lack of domestic refining.

     

    Sylva, who spoke at the launch of the Nigerian Upstream Cost Optimisation Programme in Abuja, said, “Since we are optimising everything, NNPC (Nigerian National Petroleum Corporation) needs to also think about the optimisation of product cost because as we all know oil prices are where they are today: $60.

     

    “As desirable as this is, this has serious consequences as well on product prices. So we want to take the pleasure and we should as a country be ready to take the pain.”

     

    He added, “Today, the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy. So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it.

     

    “As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices.”

     

    The PUNCH had reported exclusively on Tuesday that the landing cost of Premium Motor Spirit (petrol) imported into the country had risen by 13.34 per cent in one month to about N180 per litre on the back of the increase in global oil prices.

     

    The international oil benchmark, Brent crude, which rose to $59.34 per barrel on Friday from $53.70 per barrel on January 7, crossed the $60 per barrel mark on Tuesday for the first time in over 12 months.

     

    Crude oil price accounts for a large chunk of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.

     

    Since November 13, 2020 when the pump prices of PMS were last increased in the country, the oil price has increased by over 45 per cent.

     

    Going by the petrol pricing template of the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol rose to N179.67 per litre last Friday from N158.53 per litre on January 7, with the expected open market price (pump price) of the product increasing to N202.67 per litre from N181.53 per litre.

     

    The rising price of crude oil pushed the cost of petrol quoted on Platts to $543.25 per metric tonne (N157.99 per litre, using N390/$1) last Friday from $480.25 per MT (N139.67 per litre) on January 7.

     

    The NNPC, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

     

    The Federal Government removed petrol subsidy in March 2020 after reducing the pump price of the product to N125 per litre from N145 on the back of the sharp drop in crude oil prices. The price reduction lasted till June.

     

    Nigerians saw increases in the pump prices of petrol in four months, rising from N121.50–N123.50 per litre in June to N140.80-N143.80 in July, N148-N150 in August, N158-N162 in September and N163-N170 in November.

     

    There is no honour in your statement, Congress lambasts minister

     

    Reacting to the minister’s statement, the TUC wondered why the government was always quick to announce increase in fuel pump prices but slow to implement agreements reached with the organized labour.

     

    The TUC President, Quadri Olaleye, who stated this when asked by The PUNCH to react to the minister’s statement, noted that there was nothing honourable about what the minister said.

     

    The union leader stated, “The question is why is government always quick to tell us about the rise in the price of crude oil in the international market and the need to increase the price of PMS (Premium Motor Spirit) here but it always takes them weeks, if not months to implement agreements reached with the organised labour? It all points to one thing: they have no mercy on the poor people of this country.”

     

    Olaleye noted that the carefree attitude of the government to the plight of workers and other Nigerians showed that they do not care.

     

    He further argued that they also seemed unconcerned about the poverty, insecurity, and other social plaques their policies had caused.

     

    The TUC leader added, “ In every move and statement by government officials, you could see and feel their care-free attitude and indifference to our plight.

     

    “It appears they are not disturbed by the poverty-ridden plight of Nigerians and the unemployment/insecurity situation that their obnoxious policies have created in the country. There is nothing honourable about what  the minister has said.”

     

    Commenting on the minister’s statement, The Director-General of MAN, Mr Segun Ajayi-Kadir, said the expected increase in revenue should benefit all through an all-inclusive economic growth, which should include massive job creation.

     

    He noted that  the positive side of increased national revenue from the rising crude oil prices in the international market “is now threatening to bring forth the negative side for us.”

     

    He said, “Even though the economics of it looks straightforward, any possible increase in fuel prices in Nigeria will have to be considered carefully. This is because of its potential negative impact on the fragile economic and security situation of the country at this time.

     

    “Besides, we are just witnessing some measure of industrial stability and merely hanging on to an open economic and social life under the ravaging COVID-19 pandemic. I am not sure that we are ready for a fuel-induced inflation. This is quite apart from the heavy cost implication it portends for companies that are already forced to generate their own electricity for long hours due to poor supply inadequacy.

     

    Increased revenue from crude oil should have multiplier effects, says MAN

     

    “Also, for those who may want to rationalise the possible increase, the question to ask is what is government going to do with the corresponding increased revenue from crude oil sales in the international market? It should normally countermand the rise in pains arising from the rise in the price of fuel. Are we poised to translate this windfall, if I may use the word, to inclusive economic growth and harvest its inherent multiplier effect? Will it fund productivity, job creation and increased investments?”

     

    Nigeria faces a dilemma, says LCCI

     

    The Director-General of the LCCI, Dr Muda Yusuf, said the country must find a balance between social considerations and the commercial and economic considerations

     

    According to him, the deregulation policy of the downstream sector of the petroleum industry posed a dilemma at a time like this.

     

    He stated, “From a purely economic and commercial point of view, it is a policy that we need to sustain irrespective of what the oil price is because the capacity to be able to continue with fuel subsidy and its problems is not there, and it is also not in the interest of the economy for us to continue along that route,” he said.

     

    According to him, the subsidy regime comes with a lot of fiscal pressure on government finances, the problem of corruption, and the problem of diversion of petroleum products to neighbouring countries, among others.

     

    Yusuf said, “But the dilemma is the implications for the welfare and social conditions of the people because we are dealing with a situation of a great deal of extreme poverty among the majority of Nigerians.

     

    “We are dealing with an economic recession, cost of production and transportation that is already high, and a populace that is already on edge because of the challenges of the environment. We are dealing with a population that is characterised by high income inequality.

     

    “So, it is important that we have a balance because not deregulating the sector is not really an option; so we have to find a model that will work – like a balance between the social considerations and the commercial and economic considerations.”

  • NIN-SIM Linkage: Pantami Commends Airtel for Compliance with ongoing NIMC Enrollment Exercise

    NIN-SIM Linkage: Pantami Commends Airtel for Compliance with ongoing NIMC Enrollment Exercise

    The Minister of Communication & Digital Economy, Dr. Isa Pantami, has commended leading telecommunications services provider, Airtel Nigeria, for its compliance with the ongoing National Identity Number (NIN) verification and enrollment exercise during a visit to one of the telco’s enrolment centers in Abuja on Monday, February 8, 2021.

     

    The Minister led a delegation of key government officials including Engr. Aliyu A. Aziz, Director-General, National Identity Management Commission (NIMC) and Prof. Umar Danbatta, Executive Vice Chairman, Nigerian Communications Commission (NCC), amongst others to the Airtel showroom, situated at Adetokunbo Ademola Crescent, Wuse 2, Abuja.

     

    During the visit, Isa Pantami expressed satisfaction with Airtel’s compliance to the ongoing exercise, extoling the company for partnering with the Government and taking  definitive steps in ensuring a smooth NIN verification and enrolment process.

     

    Specifically, the Minister profoundly thanked Airtel for its cooperation with Government in making adequate preparations for the exercise and asked that his appreciation be extended to the Chief Executive Officer and the entire Airtel Management.

     

    The Minister was received by Airtel Nigeria’s Regional Operations Director, North West Region, ThankGod Otorkpa and General Manager, Government Relations, Kehinde Sanusi.

     

    Other government officials in the company of the Minister during the visit were Mr. Kashifu Inuwa Abdullahi, Director-General, National Information Technology and Development Agency (NITDA); Engr. Ibrahim Nguru, Special Assistant to the Minister; Mr. Adeleke Morounfolu Adewolu, Executive Commissioner, Stakeholder Management, NCC, amongst others.

     

    Airtel became one of the first telcos to partner with the Government in expanding the NIN registration footprints following its announcement of enrolment centres across Lagos and Abuja.

     

    The Chief Executive Officer/Managing Director, Airtel Nigeria, Segun Ogunsanya in a statement released by the telco stated that Airtel is always seeking opportunities to partner with the Nigerian Government on initiatives that will make life easier for Nigerians; hence the company’s collaboration with the NIMC to register citizens in the ongoing exercise.

    NIN-SIM Linkage exercise: On-the-spot assessment visit by Dr. Isa Ali Ibrahim, Honourable Minister of Communications and Digital Economy to Airtel Showroom in Abuja on Monday, February 8,2021

    Other fully operational Airtel NIN enrollment centres in Abuja include Transcorp Hilton, situated in Mataima and Airtel showrooms at Carpet Plaza and Kano Crescent in Wuse 2, while those in Lagos include, Airtel Express Point, VI; Airtel showrooms in Adeniran Ogunsanya, Surulere; Tejuosho, Yaba; Isheri Road, Ogba and Oba Akran, Ikeja.

     

    Customers are advised to visit any of the centres nearest to them to complete their verification and enrollment exercise.

     

    Those without NIN can fulfil the requirement at any certified NIMC enrolment centre, while those who already have NINs have the option to send their NINs to Airtel via USSD, SMS or through the Airtel Self Care app or website to update their SIM registration details.

  • LASG Closes A Lane At Yaba Axis For Red Line Rail Soil Testing For 3 Weeks

    LASG Closes A Lane At Yaba Axis For Red Line Rail Soil Testing For 3 Weeks

    In line with the Lagos State Government Multimodal Master Plan transport system, with reference to the Red Line rail system, the Yaba Overpass will be closed temporarily from Tuesday 9th to Tuesday 23rd February, 2021, (3 weeks).

     

    According to a statement signed by the Commissioner for Transportation, Dr. Frederic Oladeinde, the lane closure was necessary to commence soil testing along Muritala Mohammed Way, Ojuelegba Road (Tejuosho) as part of the Traffic Management Plan to actualize the LRMT Red line phase 1, Oyingbo to Agbado.

     

    Motorists are advised to utilize the main carriageway during the temporary closure.

     

    The Transport Commissioner assured that Traffic Management personnel will be on ground to direct traffic to minimize inconveniences.

     

    The Ministry implores residents of the State, especially motorists that ply these corridors to stay calm and cooperate with the interventions put in place to bring lasting solutions to transportation challenges in the State.

     

     

  • Before You Switch From One PFA To Another, Read This!

    Before You Switch From One PFA To Another, Read This!

    The pension industry in Nigeria has evolved over the years and introduction of the Transfer Window, which allows pension contributors to switch from one pension fund administrator (PFA) to another has been the talk of the town since November 2020 when it was officially declared open by the National Pension Commission (PenCom).

     

    Recently, Stanbic IBTC Pension Managers hosted an Instagram Live Session to educate contributors on what they need to know before switching PFAs and why they are the preferred choice in the pension industry.

     

    Below are highlights from the Instagram Live Session which held on 23 December 2020.

     

    What Should You Know Before You Switch?

    ●        Switching from one PFA to another is completely FREE and OPTIONAL.

    ●        Verify the sources of information before you switch. You can visit the National Pension Commission (PenCom) website for details on returns.

    ●        Confirm that the funds of the PFA you are switching to are audited and that they have adopted the International Financial Reporting Standard (IFRS).

    ●        Your remittance and account balance are not affected when you switch.

    ●        Anyone can switch their PFA to Stanbic IBTC Pension Managers.

    ●        You can only initiate a transfer once a year; transfers are effected at the end of each quarter.

     

    Why Should You Choose Stanbic IBTC Pension Managers As Your PFA

     

    ●        Highest Number of Subscribers: Over 1.8 million people cannot be wrong.

    ●        Their Heritage: A member of the over 150-year-old Standard Bank Group.

    ●        Trust and Reliability: They have paid over N800 billion to more than 62,000 retirees since the inception of the Contributory Pension Scheme (CPS)

    ●        Funds Performance: Their funds have returned over 370% since inception.

    ●        Transparency: There are periodic statements sent to contributors and they have the chance to check their balance at any time through their website, USSD or the Stanbic IBTC Mobile App.

     

    What Do You Enjoy When You Switch To Stanbic IBTC Pension Managers?

     

    ●        Immediate access to end-to-end financial solutions.

    ●        Peace of mind knowing that your pension is safe, regardless of where you are.

    ●        Access to relevant information plus ease of performing transactions.

    ●        Long-term sustainable returns on your assets to ensure that you retire well.

    ●        Access to their Loyalty programme where you enjoy discounts when you shop with any of their partner vendors.

     

    At Stanbic IBTC Pension Managers, operational excellence drives service delivery as their standards of operation give no room for poor investment decisions. Therefore, you can be assured that your pension is not just in safe hands but in the hands that are keen to help you to “RetireWell”.

     

    To switch now, click here. You may also call 01 271 6000 or send an email to switchgeng@stanbicibtc.com. For more information, visit stanbicibtcpension.com. 

  • FG Planning To Replace BVN With NIN – Minister

    FG Planning To Replace BVN With NIN – Minister

    The Minister of Communications and Digital Economy, Dr Isa Pantami, has said the Federal Government plans to replace Bank Verification Numbers with the National Identity Numbers.

     

    The minister said this while briefing newsmen after a facility tour and inspection of the ongoing NIN enrolment exercise at NIMC and other designated centres in Abuja.

     

    He said he had made a presentation to the National Economic Sustainability Committee and drew the attention of the Central Bank of Nigeria’s Governor on the need to replace BVN with NIN.

     

    According to him, the BVN is a regulator’s policy, while NIN is a law.

     

    He said, “The strength of the law wherever you go is not the same with a policy of one institution.’’

     

    The minister noted that BVN was only applicable to those who had a bank accounts while NIN was for every citizen and legal resident in the country.

     

    “BVN is our secondary database, while NIN and the database is the primary one in the country that each and every institution should make reference to NIMC,” he said.

     

    Pantami boasted that Nigeria was at the forefront in Africa in regard to data protection regulations, claiming that the level of security in the entire database was 99.9 per cent.

     

    He said, “That is why we came up with the Nigeria Data Protection Regulation that we always enforce and this is applicable to the database at our disposal.

     

    “We take care of it and make sure that security is excellent and we don’t allow anybody to compromise the content because it is a trust from our citizens given to us.’’

     

    Giving reasons the government engaged private agents for the NIN enrolment, the minister said the move was in line with the global standard.

     

    He emphasised the need for NIMC to focus on regulatory work and set the standards for biometrics registration, measuring of heights, standard for data to be collected and general verification.

     

    In another development, Pantami has called on the organised private sector to enhance collaboration with government, adding that the economy of Nigeria is dependent on how it faired.

     

    Pantami said this in his address at National Directorate of Employment/Federal Government’s Special Public works programme commissioning where 11,000 unemployed youth in Gombe State were engaged with work tools.

     

    He said an enabling environment was key to harvesting the gains associated with private sector, stressing that the current dispensation had provided friendly atmosphere for businesses to thrive.

     

    The minister said, “The economy of Nigeria relies more on the private sector than the public sector.

     

    “If you look at our GDP collectively, it is approximately around $450bn which is the highest in Africa. If you compute, you will discover that the entire stage of government particularly the federal level is approximately around 8.5 per cent, while that of the private sector is more than 91.5 per cent. Government cannot do without collaborating with the private sector.

     

    “What government must do is to provide enabling environment for the private sector to thrive and this is what we have been doing every day to come up with policies for the private sector to thrive.

     

    “This is what brought about tax holiday, visa on arrival in Nigeria, online registration of companies by CAC.”

     

    While hailing the public works initiative, the minister said it would reignite social service.

  • [Fraud ALERT]: FG Debunks Individual NIN Registration Website, Warns Nigerians Against Online Enrollment

    [Fraud ALERT]: FG Debunks Individual NIN Registration Website, Warns Nigerians Against Online Enrollment

    The Federal Government through the National Identity Management Commission (NIMC) has debunked it has approved an alleged individual National Identification Number (NIN) registration website.

     

    In a statement on the official twitter handle of NIMC on Monday, the commission said the website is not associated with NIMC.

     

    While warning Nigerians not to become victims and to protect their personal information, the NIMC disclosed that the website (http://bit.ly/NIN-ONLINE-REGISTRATION) is run by fraudsters.

    “Disclaimer. The website is not associated with NIMC. It is run by fraudsters. Protect your personal information, do not become a victim,” it stated.

  • Buhari Leads Mo Ibrahim, Adesina, Okonjo-Iweala, Others to Lagos Economic Summit Ehingbeti Feb. 16

    Buhari Leads Mo Ibrahim, Adesina, Okonjo-Iweala, Others to Lagos Economic Summit Ehingbeti Feb. 16

    President Muhammadu Buhari will next week lead other eminent Nigerian, African and global leaders to the Lagos Economic Summit, Ehingbeti, scheduled to hold from Tuesday, February 16 to Thursday, February 18, 2021.

     

    The summit is living up to its repute as Africa’s most practical and result-oriented private sector-led forum for socio-economic and infrastructural development with the quality of speakers confirmed to discuss at the virtual summit.

     

    This year’s edition, with the theme: For a Greater Lagos: Setting The Tone For The Next Decade, has drawn about 150 speakers from across the world to discuss and deliberate on pragmatic optimisation of the inherent opportunities in Africa’s fifth largest economy and offer perspectives on how to manage the peculiar socio-economic landscape of Lagos State in the coming decade.

     

    Leading the array of speakers at the summit are the Founder and Chair of Mo Ibrahim Foundation, Mr. Mo Ibrahim; Works and Housing Minister Babatunde Fashola (SAN), Director General of the Budget Office of the Federation, Mr. Ben Akabueze; former Minister of Finance, Dr. Ngozi Okonjo-Iweala; President of African Development Bank (AfDB), Dr. Akinwunmi Adesina; United Nations (UN) Deputy Secretary General, Amina Mohammed and UNDP Resident Representative, Mohammed Yahaya.

     

    President Buhari; former Lagos State governor, Asiwaju Bola Ahmed Tinubu and British Higher Commissioner to Nigeria, Catriona Laing, will give goodwill messages.

     

    The Summit opening address will be delivered by the Lagos State Governor Babajide Sanwo-Olu will deliver the opening address, while his deputy, Dr. Obafemi Hamzat and House of Assembly Speaker Mudashiru Obasa will lead the session on Strengthening Governance, Institution and Legislation.

     

    Other speakers at summit include Managing Director, Nigerian Breweries, Jordi Borrut Bel; Chief Executive of Centre for Values in Leadership, Prof. Pat Utomi; Academic Director, Lagos Business School, Prof. Yinka David-West; Director General of the Nigerian Association of Chambers of Commerce, Industry, Mines And Agriculture (NACCIMA), Ambassador Ayoola Olukanni; Director General of Lagos Chamber of Commerce & Industry (LCCI), Muda Yusuf; Founder of Ebony Life TV, Mo Abudu; Founder of Terra Culture, Bolanle Austen-Peters; Director of Creative Arts (West Africa), British Africa, Miss Ojoma Ochai, among others.

  • Minister Lauds MTN For Appointing Nigerian CEO

    Minister Lauds MTN For Appointing Nigerian CEO

    The Minister of Communications and Digital Economy, Dr Isa Pantami, has commended MTN Nigeria for appointing a Nigerian to lead the telecommunications and ICT services provider.

     

    According to a statement issued on Sunday, Pantami gave the commendation during a courtesy visit by MTN’s Chairman, Ernest Ndukwe, Chief Executive Officer-designate, Karl Toriola, and Chief Corporate Services Officer, Tobechukwu Okigbo.

     

    The statement said the aim of the visit was to officially introduce the CEO-designate to the minister and to demonstrate commitment to the MTN Nigerianization Agenda – an initiative geared at increasing local participation in the telco’s top management and promoting local content.

     

    Ndukwe gave the assurance that plans were underway to give Nigerians more access to the MTN opportunity.

     

    “In spite of the current limitations, we are working with stakeholders to increase local ownership of MTN Nigeria and at the same time increase equity in Nigeria’s capital markets,” he added.

     

    Pantami also praised MTN Nigeria for its corporate social investment activities through the MTN Foundation.

  • Petrol Price May Hit N190 As Oil Nears $60

    Petrol Price May Hit N190 As Oil Nears $60

    Marketers have said with the current realities in the global crude oil markets, the price of Premium Motor Spirit (petrol) in Nigeria should be between N185 and N200 per litre, unless the government wants to subsidise the product.

     

    The upturn in global oil prices last week has again brought to the fore marketers’ concerns over the non-implementation of the full deregulation of the downstream petroleum sector as the pump prices of petrol have been left unchanged for more than two months.

     

    Top officials of two major marketers’ associations who spoke with our correspondents on Saturday said the continued increase in oil prices had brought back petrol subsidy.

     

    The PUNCH had reported on January 11 that the sustained increase in global crude oil prices had pushed up the landing cost of imported petrol closer to the current pump prices of the product in Nigeria, and appeared to have triggered a return to petrol subsidy era.

     

    Since November 13, 2020 when the pump prices of PMS were last increased in the country, the price of the international oil benchmark, Brent crude, has increased by 43 per cent, rising from $41.51 per barrel to $59.34 per barrel on Friday.

     

    Fuel marketers had in December expected another upward adjustment of PMS prices to reflect the further rise in crude oil prices, which closed at $51.22 per barrel on December 31.

     

    However, a N5 reduction in petrol price, effective December 14, was announced by the Federal Government – a development that left them reeling in shock and questioning the deregulation of petrol price.

     

    Crude oil price accounts for a large chunk of the final cost of petrol, and the country has continued to spend so much on petrol imports for many years amid low domestic refining capacity.

     

    According to the marketers, the pump price of petrol should be between N185 and N200 per litre.

     

    The product is currently sold at between N160 and N165 per litre at many filling stations in Lagos.

     

    The Executive Secretary/Chief Executive Officer, Major Oil Marketers Association of Nigeria, Mr Clement Isong, said, “Members of my association are operating in Nigeria and care about the long-term sustainability of the industry as well as the country itself.

     

    “So, we know that depending on what exchange rate you use, the pump price should be between N185 and N200 per litre.

     

    “For as long as we continue to sell the product at what we are currently selling it, then somebody is bearing the cost of subsidy, and the country really cannot afford subsidy at this time.”

     

    He said the demand for petrol had increased significantly in the country, adding that the security of supply had been threatened.

     

    Isong said smuggling might have resumed because of the significantly different prices across the borders, which were recently opened.

     

    “So, we need to completely restructure our entire supply chain. We need to reach a place where, if deregulation takes effect, refining will resume in Nigeria. We need to find a way of making sure that Nigerians benefit from deregulation. That, I believe, is what the discussion must be.”

     

    The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

     

    Private oil marketing companies have continued to lament that their inability to access foreign exchange at the official rates has hampered efforts to resume petrol importation.

     

    The PUNCH reported on Friday that the Federal Government had announced the commencement of discussions with representatives of the labour movement on how to raise the freight rate from N7.51 per litre to N9.11 per litre.

     

    Freight is one of the elements that make up the landing cost of the petrol imported into the country.

     

    The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, told our correspondent that the implementation of the new freight rate would lead to petrol price increase.

     

    He said, “Already, we are back to subsidy, and from the information I have which is confirmed, the Federal Government is subsidising about N1.8bn per day because 70 million litres are being pumped out every day now because the borders have been opened; I don’t know where the fuel is going.

     

    “Government cannot afford subsidy, and there is no subsidy in the budget. So, the market fundamentals have to come to force now.

     

    “Based on $56 per barrel of crude oil, our pump price should be about N186 to N190. But now that oil price has even gone to $59, then pump price should not be less than N200 per litre. There is no way Nigerians can avoid petrol price increase.”

     

    Osatuyi said the increase in oil prices had already pushed up the pump prices of diesel and kerosene in the country.

     

    The Minister of State for Petroleum Resources, Timipre Sylva, had said in September last year that the Federal Government had stepped back in fixing the price of petrol, adding that market forces and crude oil price would determine the cost of the product.

     

    The Federal Government removed petrol subsidy in March 2020 after reducing the pump price of the product to N125 per litre from N145 on the back of the sharp drop in crude oil prices. The price reduction lasted till June.

     

    Nigerians saw increases in the pump prices of petrol in four months, rising from N121.50-N123.50 per litre in June to N140.80-N143.80 in July, N148-N150 in August, N158-N162 in September and N163-N170 in November.

     

    Apart from the increase in global oil prices, the devaluation of the naira last year also led to a significant rise in the cost of imported petrol.

     

    If the pump price of petrol is left unchanged amid the rise in oil prices, it means the NNPC would again bear the latest subsidy cost on behalf of the government as it did for several years before its removal last year.

     

    In July 2020, Sylva said in a statement that the Federal Government had reached a conclusion that it could no longer bear the burden of petrol subsidy.

     

    “After a thorough examination of the economics of subsidising PMS for domestic consumption, the Federal Government concluded that it was unrealistic to continue with the burden of subsidising PMS to the tune of trillions of naira every year, more so when this subsidy was benefiting in large part the rich, rather than the poor and ordinary Nigerians,” he said.

     

    According to him, deregulation means that the government will no longer continue to be the main supplier of petroleum products but will encourage the private sector to take over the role of supplier of the products.