Category: Energy

Data from the Nigerian National Petroleum Corporation (NNPC) shows that between January and September, this year, over N905.27 billion was spent on subsidy to keep the pump price of petrol at between N162 and N165 per litre. However, with a rising global oil price and the likelihood of the country not being able to increase its oil production capacity, fears are rife that the price may become unsustainable soon, SUNDAY OMONIYI reports.

For oil producing countries, the last one week has been some cheery news. This is because prices of crude oil in the international market have kept surging, surpassing the $80 per barrel mark.

For instance, Oilprice.com earlier this week, reported the international oil benchmark for Brent crude to have increased by 1.51 per cent or $1.86 to $82.77 per barrel. Similarly, it reported that the United States West Texas Intermediate (WTI) rose by two per cent or $1.55 to $79.17 per barrel.

But for Nigeria, this development might not give much hope. With the crashing value of the naira against the dollar and other international currencies, continued fuel import, the gains that should have accrued from the oil price rise may be eroded.

Statistics from the Nigerian National Petroleum Corporation (NNPC) indicate that between January and September this year, over N905.27 billion was spent by the corporation to stabilise the pump price of fuel at its current rate of between N160 and N165 per litre. Funding this has been by deducting the amount from the NNPC’s contribution to the Federation Account and Allocation Committee (FAAC).

A breakdown of the deduction shows that in June, the NNPC deducted N114.3 billion from its remittance, with an outstanding balance of N40 billion to be deducted the following month. In July, N173.13 billion was deducted from FAAC contribution and another N149.28 billion in August.

Implication

For the federal, state and local governments, financial challenges may lie ahead. This is because with a rising oil price, a larger part of the oil revenue may have to go into subsidy payment. The Group Managing Director, NNPC, Melee Kyari, has not ceased to warn.”The comfort zone for Nigeria is at $58-$60. Anything above $70-$80 oil price will create major distortions in the projections of the corporation and add more difficulties to the company,” Kyari warned at a stakeholders meeting in Abuja earlier.

A major challenge that will also arise from this is the capacity of the country to produce enough quantity of oil to sell, including importing and subsidising the commodity. Crude oil price is being projected to rise to about $100 per barrel by year end. Interestingly, even as the commodity continues to rise in price, the Organisation of Petroleum Exporting Countries (OPEC) and its allies have insisted that it would maintain its steady output increase by 400,000 barrels daily this month.

Read Also: Oil prices rise on weaker U.S. dollar

According to OPEC, from July to September, Nigeria recorded a shortfall of 130,000 barrels daily. The country was said to have reported crude output of 1.27 million bpd in August, down from 1.44 million bpd in July, which was also lesser than the 1.54mbpd allowed.

Still, as captured in its August FAAC report, the corporation, in May, reported over 30 various disruptions in its oil production from community clashes, fire outbreaks and other operational breakdowns, leading to a production loss of 4,187,500 barrels of oil. In monetary terms, the loss could have generated about $286.9 million. Nigeria’s highest production target of 1.7 million barrels daily next year.

Worries

The continued subsidy has remained to be a source of concern to stakeholders and other international bodies. For instance, the International Monetary Fund (IMF) expressed concern over the re-emergence of fuel subsidy in Nigeria in the face of the country’s low revenue mobilisation.

The IMF, in a statement at the end of its staff virtual meeting with top Nigerian officials, said the views expressed in the statement were those of the IMF staff and did not represent those of the IMF’s Executive Board.

The IMF team was led by the Fund’s Mission Chief for Nigeria, Ms. Jesmin Rahman, in the meetings with the Nigerian authorities, to discuss recent economic, financial development and outlook.

At the end of the visit, Rahman, in the statement, said the economy had started to gradually recover from the negative effects of the COVID-19 global pandemic.

He said: “The mission expressed its concern with the resurgence of fuel subsidies. It reiterated the importance of introducing market-based fuel pricing mechanism and the need to deploy well-targeted social support to cushion any impact on the poor.

“The mission recommended stepping up efforts to strengthen tax administration to mobilise additional revenues and help address priority spending pressures.”

It stated that tax revenue collections in Nigeria were gradually recovering but with fuel subsidies resurfacing, additional spending for COVID-19 vaccines, added to address security challenges, the fiscal deficit of the consolidated government was expected to remain elevated at 5.5 per cent of Gross Domestic Product (GDP).

 

The Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), Dr Orji Ogbonnaya Orji, has said 77 oil and gas firms are owing the country $6.48 billion in unpaid taxes and royalties.

Orji, at a media parley on the status of EITI implementation and the agency’s mid-year scorecard in the past seven months, maintained that the debts skyrocketed due to the non-remittance of petroleum profit tax, company income tax, education tax, value added tax, withholding tax, royalty and concession on rentals by the defaulting oil and gas firms.

A breakdown of the figures shows that a total of $143.99million is owed as petroleum profit taxes (PPT), $1.089billion as company income taxes (CIT) and $201.69 million as education tax. Others include $18.46million and £972,000 as Value Added Tax (VAT), $23.91million and £997,000 as Withholding Tax, $4.357billion as royalty oil, $292.44million as royalty gas, while $270.187million and $41.86million were unremitted gas flare penalties and concession rentals.

Read Also: States get nod for more borrowing

The NEITI boss noted that N2.659 trillion could have covered the entire capital budget of the Federal Government last year or even used to service the Federal Government’s debt of $2.68billion in 2020. He explained that the disclosure is important and timely in view of the government’s search for revenue to provide infrastructure. He added that the amount, which is even higher than the entire projected oil revenue for the year, if recovered, could fund about 46 per cent of the country’s 2021 budget deficit of N5.6trillion.

“This is why NEITI is set to work with the government to provide relevant information and data to support efforts at recovering this money,” Orji stated.

He further listed achievements recorded since his appointment in February to include re-constitution of the NEITI Board; commencement of process to review NEITI Act; timely publication of audit reports and securing permanent office accommodation for the agency after 17 years of renting.

Others include the appointment of NEITI into the implementation of the PIA committee; commencement of the development of a five-year NEITI Strategic Plan (2022-2026); NEITI Audit Automation Project; NEITI’s appointment to lead the global EITI Contract Transparency Network; Designing of a new Interactive website and reconstitution of the civil society and communication sub-committee.

 

 

EKO Electricity Distribution Company (EKEDC) will today round off its Customer Service Week with a cultural display.

The week-long celebration, which was kicked off on Monday, according to the firm, was to celebrate the resilience, strength, and tenacity of customer service practitioners in the face of the new normal that has been forced on the world by the corona virus pandemic.

EKEDC, in a statement signed by its General Manager, Corporate Communications, Godwin Idemudia, made this known at the week-long event was themed “Power of service.”

EKEDC Chief Legal Officer, Wola Joseph, stated: “This year, we are delighted to celebrate our customer service officers, who have helped to sustain the culture of service excellence and ensure no interruption in the delivery of quality service to our customers and stakeholders.

Read Also: NDPHC, EKEDC sign MoU to add 300mw to Ibeju-Lekki

The Week commenced on Monday with the Appreciation Day, designed to celebrate the EKEDC’s workforce and its customers for their commitment and support to the company’s overall growth and improved service delivery. This was followed by the “Sensitisation Day” for customers on the appropriate channels of enquiries and complaints for prompt resolution. On Wednesday, the team embarked on Corporate Social Responsibility (CSR) to schools within its distribution network.

Other activities that marked the week were quiz and debate for senior secondary school pupils at the company’s headquarters in Marina, and cultural day for the staff members.

“As one of the leading electricity distribution companies in Nigeria, EKEDC remains committed to the delivery of reliable service to its customers and all stakeholders,” Joseph said.

The Executive Secretary (ES), Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, has said to fully enshrine local content development, capacity building initiatives, funding, incentives, research and development, regulatory framework and access to market were key.

He spoke at the sixth Ugandan International Oil and Gas summit in Kampala, Uganda, themed: “Developing a world-class local content structure.”

Drawing from the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, he underlined that entrenching a sustainable local content practice leads to development, empowerment, prosperity, and creation of employment opportunities.

According to him, an enabling regulatory framework backed with the appropriate legislation is fundamental to effective local content practice as it sets the framework and boundaries for practitioners in the sector.

Wabote noted that baseline and periodic gap analyses would help to identify areas or loopholes that needed to be closed in the areas of skills, facilities and infrastructure. “The oil and gas industry keeps evolving and regular reviews and monitoring of local content goals show where capacities have been met, current gaps, and where capacity upgrade is required to guide deployment of resources and investment decisions,” he said.

The NCDMB boss, however, noted that there was the need to strike a balance between the goals and realistic targets and to put in place credible action plans and initiatives to close the gaps and understanding that all gaps cannot be closed overnight, hence the need to prioritise areas of high impact and deploy implementation measures. This would include developing in-country capacities and capabilities, catalysing local manufacturing and infrastructural development as well as human capacity development.

Read Also: Scottish economic growth seen persistently below UK growth rate in coming years

Wabote explained that one per cent of the value of contracts awarded in the upstream sector of the industry is pooled into the Nigerian Content Development Fund (NCDF), adding that the NCDMB had deployed the funds in the launch of the $350 million Nigerian Content Intervention Fund (NCIF) with the Bank of Industry and NEXIM Bank. Other utilizations of the NCDF include the development of Nigerian Oil and Gas Parks Scheme as manufacturing hubs.

The ES underscored the importance of that research and development, hinting that local content thrives where there is robust R&D guideline to drive development of home-grown technology. He added: “No nation can really develop by being a consumer of other countries technology and intellectual properties.”

He further said NCDMB had focused on research and development in the sector with the launch of the R&D Roadmap anchored on eight key pillars and 42 initiatives and launch of a $50million Nigerian Content Research & Development Fund to drive basic research,commercialisation of research breakthroughs, establishment of centres of excellence, and to sponsor university endowments.

He pointed out that access to market is also a critical parameter for developing local content because policies, laws, capacities and R&D’s efforts would become stifled if there was no outlet to receive reward for growth and sustenance.

He explained that the Board had enabled access to market by ensuring patronage of goods and services that are developed from local capacities using the ‘right of first refusal’ principle. He listed other tools such as the Nigerian Content Plan, the Nigerian Content Compliance Certificate, and the Nigerian Content Equipment Certification.

The NCDMB boss noted that the experience garnered by the local businesses, and the capacities developed over the years have positioned them for the opportunities that would be realised from the African Continental Free Trade Agreement.

 

 

 

 

 

By Chris Njoku, Owerri

Guinness Nigeria has empowered more than 150 women at the August meeting in Imo State through its new Guinness campaign ‘Black Shines Brightest’ in celebration of African creativity and enterprise.

Its Marketing Manager, Uche Nwalie, said it initiated a female empowerment programme and delivered care packages in communities in Owerri and Aba to equip these women to change their lives

According to him, the global campaign, ‘Black Shines Brightest (BSB)’ celebrates a generation of individuals across Africa, who draw creative expression from their environment and boldly take on opportunities in front of them because they deserve to be recognized.

The campaign also highlights the significance of platforms such as the August meeting.

Read Also: Nigeria @60 Awards hold Sept. 30 – FG

As part of the extraordinary celebration, Guinness painted August Meeting in Owerri with a series of bold activations including the empowerment of community women with mobile bars stocked with Guinness products, vital health check-ups and a mental health workshop.

He said: “August Meeting is a significant opportunity for us to acknowledge and celebrate extraordinary women redefining culture for decades. We are committed to connecting and inspiring women, bold enough to create, shape and transform systems truly progressive in its depiction and portrayal of women.”

The chairperson of the Eze in Council Ugoeze Bertha Onyenagbaru commended Guinness for the exciting initiative connecting coalition of Igbo women home and abroad in their home town to discuss and deliberate on issues they have in common.

She also appealed to the company to assist women in the communities where the Osu cast system is still being practised to eradicate the obnoxious practice that had stigmatised many families.

“We are fighting against it in our communities include painfully spoke on the OSU/ ume I want you to talk on this and how you can use your social responsibility to assist the women in this direction.”

L-R, The Converner/Organizer, August Meeting 2021; Rev. Mrs Uchenna Okoroike; Brand Manager Guinness Nigeria, Cynthia Ufele , Convener /Organizer, August Meeting ; Mrs Chinyere Amaukwu and Brand Ambassador, Guinness Nigeria, Prince Nelson Enwerem at the August Meeting Event held at Ugiriclan Owerri last week.

By Muyiwa Lucas

A power management company, Eaton Nigeria, in conjunction with the Licensed Electrical Contractors Association of Nigeria (LECAN), Lagos State Chapter, have resolved to tackle electrical products counterfeiting, including sharpening the skills of electricians.

The firm’s Regional Manager, Eaton West Africa, Charles Iyo, made this known at the end of its technical training and seminar for electricians in Lagos. He re-emphasised his company’s commitment to the anti-counterfeiting mission with the launch of its anti-counterfeit campaign and retraining of artisans.

Iyo, who noted that the existence of counterfeit products is a threat, explained that using counterfeit electrical products result in a higher risk of failure or malfunction, potentially leading to equipment failure, property damage, injury or loss of life.

“I am optimistic that as more electricians are able to identify ‘at-risk and suspect packaging,’ extraneous marks and labeling, product modifications and how counterfeit products are sold, fewer counterfeit products will make it into Nigerian homes and buildings,” Iyo said.

He assured that in line with Eaton’s commitment to develop more efficient, sustainable power management solutions that meet the ever-changing needs of the world, the company would continue to develop programmes and methods to help thwart counterfeiting through education and training of regulators, trade associations, distributors, electrical artisans and end-customers.

President, LECAN, Lagos State Chapter, Comrade Bada Olalekan said the event helped to improve the services of the electrician knowing how and where to get good products which will give the end users satisfaction.

“This is one of the things that will improve the electricians and contractors and I really want to say thank you to Eaton for coming up with this initiative, this is why we always seek partnership with them and having one on one discussions with them as a company to align on the best way to help contractors,” he added.

By Muyiwa Lucas

Researchers are yet to access the $50 million earmarked by the Nigerian Content Development and Monitoring Board (NCDMB) for Research and Development (R&D).

Its Executive Secretary, Simbi Wabote, made this known  ahead of the R&D Fair briefing. The Minister of State for Petroleum Resources, Timipre Sylva, would launch the $50 million R&D fund at the fair slated for Yenagoa, the BayelsaState capital later in the month.

Wabote regretted that this happened because there were no stringent conditions attached to the grant.”The fund has been set aside for research and development. But it is yet to be accessed. And, there is no collateral associated to this. No bank account’s requirement. It is not a bank loan. It is a grant. But you must qualify for it. There is a rigorous and transparent process you must go through. We must be fully aware of this,” Wabote said.

He is, however, hopeful that the situation may change once the fund has been launched at the fair as plans are on ground to create bigger awareness for the fund at the planned event.

“We feel that we do not see researchers coming for the fund because there is no enough awareness and to correct this, the minister will launch the fund at the R&D fair in Yenagoa. There will also be a road show, we are going to make noise about it and at the end, we shall get Nigerians who have solutions to access the funds. If you know any Nigerian who has a solution to, even our agric issues, even if he lives in the moon, bring him, we shall be willing to work with him,” Wabote said, adding that the NCDMB earmarked these funds because of its determination to ensure success for research and development in the country.”