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  • No Increase In Price Of Petrol Until Talks With Labour Concluded –NNPC

    No Increase In Price Of Petrol Until Talks With Labour Concluded –NNPC

     

    The Nigerian National Petroleum Corporation (NNPC) says it will maintain the current ex-depot price of premium motor spirit (PMS), better known as petrol, until the end of negotiations with organised labour.

     

    Kennie Obateru, Group General Manager, group public affairs division of NNPC, disclosed this in a statement on Friday.

     

    This development comes after Mele Kyari, NNPC General Managing Director (GMD), said the NNPC can no longer bear the cost of subsidy on its books.

     

    Kyari had said the NNPC can no longer bear the burden of underpriced sales of petrol, adding that the market price needs to be implemented.

     

    He said NNPC pays between N100-120 billion a month to keep the pump price at the current levels.

     

    In the statement, Obateru said although the NNPC currently bears the burden of petrol subsidy, current price will be maintained at N162 until ongoing engagement with the organized labour and other stakeholders are concluded.

     

    He said the NNPC has no intention to preempt ongoing engagement with labour by unilaterally increasing the ex-depot price of petrol.

     

    Obateru said the NNPC has made arrangements for robust stock of petroleum products in all its strategic depots across the country to keep the nation well supplied at all times.

     

    He urged petroleum products marketers to desist from arbitrary price increase or hoarding of petrol.

     

    The spokesman also warned against panic buying, stressing that NNPC was committed to ensuring energy security.

     

    In February, Timipre Sylva, minister of state for petroleum resources, had warned Nigerians to get ready to bear the pains of increased petrol pump price as crude oil prices climbs above $60 per barrel.

     

    The increase in the price of crude oil bodes well for the Nigerian economy as this will boost the county’s revenue needed for the implementation of the 2021 budget, improve crude oil receipts and consequently bolster foreign exchange inflows.

     

    However, the prolonged high crude prices would ultimately feed into a climb in petrol’s landing cost — meaning an increase in fuel price. This would further weaken the purchasing power of Nigerians who are already battling with high inflation, unemployment and stuttering economic growth.

  • Petrol May Sell For N234 Per Litre as NNPC Can’t Sustain Subsidy, says Kyari

    Petrol May Sell For N234 Per Litre as NNPC Can’t Sustain Subsidy, says Kyari

     

    The General Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, says the company cannot continue to bear the subsidy burden.

     

    The Petroleum Products Pricing Regulatory Agency (PPPRA) had released a template increasing petrol price to N212 per litre — but the template was later deleted.

     

    Speaking during a ministerial briefing on Thursday at the Presidential Villa, Abuja, Kyari said NNPC can no longer bear the burden of underpriced sales of premium motor spirit (PMS), better known as petrol, adding that the market price need to be implemented.

     

    He said NNPC pays between N100-120 billion a month to keep the pump price at the current levels.

     

    “The price could have been anywhere between N211 and N234 to the litre. The meaning of this is that consumers are not paying for the full value of the PMS that we are consuming and therefore someone is paying that cost,” he said.

     

    “As we speak today, the difference is being carried in the books of NNPC and I can confirm to you that NNPC may no longer be in a position to carry that burden.”

     

    The NNPC GMD said the federal government is working to deepen the auto-gas programme which will serve as alternative to petrol.

     

    “That is why early last year if you recall, the full deregulation of the PMS market was announced and we have followed this through until we got to September when prices shifted to N145,” he said.

     

    “As we speak today, I will not say we are in a subsidy regime but we are in a situation where we are trying to exit this subsidy or underpriced sale of PMS until we get in terms with the full value of the product in the market.

     

    “Today, PMS sells across our borders anywhere above N300 at any of our neighbours. And in some places, it is up to N500 and N550 to the litre.

     

    “In some countries, the Nigerian fuel is their primary fuel. We are supplying almost everybody in the West African region, so it is very difficult to continue this because we have our own issues and that is why the eventual exit from this is completely inevitable.

     

    “When that will happen, I do not know. But I know that engagements are going on. The government is very concerned about the natural impact of price increases on transportation and other consumer segments of our society and as soon as those engagements are taken to logical conclusion, I am sure that the market price of PMS will be allowed to play at the right time.”

     

    The resurgence in the price of crude oil bodes well for the Nigerian economy as this will boost the county’s revenue needed for the implementation of the 2021 budget, improve crude oil receipts and consequently bolster foreign exchange inflows.

     

    However, the prolonged high crude prices would ultimately feed into a climb in petrol’s landing cost — meaning an increase in fuel price. This would further weaken the purchasing power of Nigerians who are already battling with high inflation, unemployment and stuttering economic growth.

  • Gas Distribution: Zakhem Commends NNPC on Completion and Looping Of Escravos–Lagos Pipeline

    Gas Distribution: Zakhem Commends NNPC on Completion and Looping Of Escravos–Lagos Pipeline

     

    • Says …“Zakhem will strengthen R&D, professional development needed for sustained top-notch project delivery”

     

    The Board and Management of a leading International Engineering, Procurement and Construction, Investment Group, Zakhem, have commended the Nigeria National Petroleum Corporation (NNPC) on the completion of the Escarvos – Lagos gas pipeline project of three hundred and forty two kilometers, adding that the continuous engagement of indigenous companies will afford them the opportunity to showcase their technical competence while also giving rise to national economic development. 

     

    Zakhem, which won much acclaim for successfully executing the mechanical completion and commissioning of the 36’’ x 342Km Escravos – Lagos Gas Pipeline Project, through its Managing Director, Mr Uba Saidu Malami said the project, which has capacity to add 2.2 standard cubic feet of gas to the market was executed under Zakhem’s corporate policy of Professionalism, Safety and Quality delivery.

     

    He further assured that the company will continue to strengthen its technical capacity through experience, Research and Development (R&D), while also building the capacity of staff and create opportunities for indigenous host communities’ participation.

     

    While agreeing with the NNPC Management that the recent completion of Escravos – Lagos Gas Pipeline will sustainably address challenges associated with supply of natural gas to various power plants in the country, Zakhem opined that the pipeline infrastructure it constructed will stand the test of time, adding that “Zakhem has successfully constructed a number of major oil and gas pipelines around the world, totalling in excess of five billion US dollars.”

     

    “Zakhem Construction Nigeria Limited stands out as an indigenous Nigerian company with Africa as its scope, and has demonstrated outstanding technical expertise in its areas of specialisation,” he said, adding that “for over forty-six years, the Zakhem Group has served the Oil and Gas industry, and through its world-wide branches has established an international reputation in the fields of engineering, procurement and construction of onshore gas pipelines, storage tank farms, gathering and pumping stations, refineries and industrial plants.”

    The Managing Director said Zakhem’s cross-country pipeline activities include proven experience in major Road and Swamp Crossings, the installation of pipelines across major river crossings by the horizontal directional drilling technique among other methods, and laying of pipelines across extensive rocky terrains through controlled precision blasting, adding that “the skills, experience and resources gained over the period, combined with a remarkable track record of completed high quality work, are the reliance of Zakhem Group in undertaking and successfully accomplishing the delivery of major projects around the world.”

     

    The Managing Director commended the foresight of the NNPC for identifying the various assets that will be instrumental in delivering 4.5 billion scf of gas.

     

    He said: “It is commendable that the NNPC has announced a policy decision to invest $3.5 billion in a petrochemical and fertilizer project that will give rise to a capacity to process 300 million scf of gas,” adding that the Zakhem aims add value to the effort by deploying its technical expertise and its long-standing reputation of research and development in the gas pipeline industry.

     

    Evaluating the initiative of the NNPC to establish brass gas hubs in the country, the Managing Director said the plan, which aims to ensure unmitigated availability of gas in the country, will maximize the potential of the country for economic development and wealth creation through its abundant gas resources.

     

    Discussing how the proposed gas hubs will address Nigeria’s power sector challenges, he noted that “the Nigerian power sector consumes the highest volume of gas in line with what is obtainable in continental Europe, America and Japan,” stating that gas infrastructural facilities in Nigeria are owned by government.’’

     

    “So there is no doubt that the gas hubs will address the inadequacy associated with development and management of the energy sector, a problem that has been responsible for supply-demand gap in spite of abundance of energy resources in Nigeria.”

     

    “The gas industry in Nigeria is still developing, and we foresee the importance of the role that government is playing in trying to develop it through its various interventionist policies and projects such as the recently proposed gas hubs and the Escarvos-Lagos pipeline.”

     

    Further discussing how the proposed gas hubs will invigorate the economy, he said: “Generally, the gas sector contributes to economic growth in two ways, namely, being a strategic part of the energy sector, it creates jobs and value by attracting, transforming and distributing energy goods throughout the economy.”

     

    “Also, the availability of gas impacts the entire national economy by providing direct and indirect jobs,” adding that the gas sector has deep supply chains and high pay, indirect and induced jobs represent an imported part of its overall economics contribution.

     

    These impacts are in the area of employment opportunities, industrialization, contributions to government revenues, Gross Domestic Product, foreign exchange reserves, supply of energy to industry, agriculture and social welfare in terms of home use.

     

    He said it is in view of these viable opportunities that Zakhem is poised to enforce its resolve to further engage in R&D, improve its capacity and capability to collaborate with relevant authorities in the realization of Federal Government Policies for sustainable growth in the Oil and Gas industry.

     

    “Zakhem participation in NNPC successful completion and looping of Escravos-Lagos Pipeline Project is one of such collaborative efforts that we are pleased to be involved,” he added.

  • Nigeria Loses N151.78bn Crude Oil Monthly – NNPC

    Nigeria Loses N151.78bn Crude Oil Monthly – NNPC

    Nigeria is currently losing an average of 200,000 barrels of crude oil daily, the Nigerian National Petroleum Corporation stated on Wednesday.

     

    Brent, the oil against which Nigeria’s crude is priced, was $66.75 per barrel on Wednesday, while the official exchange rate of the dollar stood at 379/$.

     

    From the above figures, it showed that the country was losing about N151.79bn in 30 days, going by the 200,000 barrels of crude oil being lost daily, as revealed by NNPC.

     

    Group Managing Director, NNPC, Mele Kyari, disclosed the volume of crude oil lost daily in Nigeria while speaking at a meeting with the Chief of Defence Staff, Major General Lucky Irabor.

     

    The NNPC boss was quoted in a statement issued in Abuja by the corporation’s spokesperson, Kennie Obateru, as saying, “We have two sets of losses, one coming from our products and the other coming from crude oil.

     

    “In terms of crude losses, it is still going on. On the average, we are losing 200,000 barrels of crude every day.”

     

    On his part, Irabor promised to galvanise the military to provide maximum security for the nation’s oil and gas assets.

     

    He said, “I am delighted that you made this effort, and I tell you that the Armed Forces of Nigeria will collaborate with you to protect NNPC’s assets.”

     

    Irabor acknowledged the role of the oil and gas sector to the economy and stated that there was need for collaboration between the NNPC and the Armed Forces to protect oil and gas facilities.

     

    “It is my intention to cooperate maximally with you and to give necessary instructions to all officers in the Armed Forces,” he said.

     

    In a related development, a professor of law at the University of Lagos, Dayo Ayoade, has said the Federal Government was losing huge revenue in the upstream sector through the inadequacy of the measurement infrastructure.

     

    Between 2009 and 2019, the lecturer said, the nation lost 500 million barrels of crude oil valued at $44.7bn which was not assessed for royalty and tax.

     

    Disclosing this at a virtual meeting on illicit financial flows organised by the Independent Corrupt Practices and Other Related Offences Commission in Abuja on Wednesday, Ayoade pointed out that Nigeria currently relied on crude oil producers for determination of crude oil volumes.

     

    He said, “Nigeria currently relies on holders and producers of crude oil for determination of volumes of crude oil.

  • No Plans to Hike Petrol Pump Price in February, NNPC Assures Nigerians

    No Plans to Hike Petrol Pump Price in February, NNPC Assures Nigerians

    The Nigerian National Petroleum Corporation (NNPC) has assured organised labour and Nigerians that there is no plan to increase the price of Premium Motor Spirit (PMS) otherwise known as petrol in the month of February.

     

    This follows the reported rumour of plans to increase the price of petrol due to the continuous increase in the global price of crude oil and the reported hoarding of the product by some depot owners and marketers.

     

    The assurance was contained in a statement issued by the NNPC and signed by the Group General Manager, Group Public Affairs Division, Dr Kennie Obateru, on Thursday in Abuja.

     

    Obateru, in the statement, said, “In spite of the rise in the price of crude oil in the international market, NNPC has ruled out any increment in the ex-depot price of PMS in February 2021.’’

     

    Obateru explained that the decision was to allow ongoing engagements with organised labour and other stakeholders on an acceptable framework that would not expose the ordinary Nigerian to any hardship.

     

    While giving assurances that the corporation had enough stockpile of petrol to keep the nation well supplied for about 40 days, he urged petroleum products marketers not to engage in the hoarding of PMS in order not to create artificial scarcity and unnecessary hardship for Nigerians.

     

    Obateru also called on relevant regulatory authorities to step up monitoring of the activities of marketers with a view to sanctioning those involved in products hoarding or arbitrary increase of pump price.

     

    Note:

    Recall that the Minister of State for Petroleum Resources, Chief Timipre Sylva, had in March 2020 announced the deregulation of the downstream sector of the oil industry and the subsequent removal of the petrol subsidy.

     

    He said that subsequently, the prices of petroleum products would be determined by prevailing market forces.

     

    With the increase in the oil price to about $65 per barrel, oil marketers and other stakeholders have insisted that the current petrol price is not sustainable unless the Federal Government would return back to the subsidy regime, which has no provision in the 2021 budget.

     

    The ex-depot price is the price at which oil marketers buy products from the depot and the price determines the price at which they sell to motorists at their various petrol stations.