Category: Business

  • Petrol: so scarce, so costly

    Petrol: so scarce, so costly

    The perennial scarcity of petroleum products and the attendant exorbitant cost remains a source of concern to most Nigerians, reports Ibrahim Apekhade Yusuf

    Like most essential commodities, petroleum products, especially petrol (Premium Motor Spirit) and kerosene, have become priced out of the reach of the common man, a development, analysts argue, is a foretaste of what to expect in the coming months.

    The looming oil crisis may have been caused in part by the scarcity of petroleum products, which according to economic pundits, was sadly inspired by the subsidy probe.

    Antics of petrol attendants

    Checks by The Nation revealed that most fuel stations across the country have been selling petroleum products at exorbitantly high cost outside the regulated pump price of N97 per litre, just as they adjust their metres at will.

    From Lagos, Ibadan, to Lokoja, Abuja, Minna, Kano, Sokoto to Port Harcourt to Enugu, Owerri, petroleum pricing is now as inconsistent as they come.

    Worst still, many fuel station attendants have since gained notoriety for seeking gratifications before they sell to vehicle owners or those buying in jerry-cans.

    At most filling stations in Lagos metropolis and its environs, majority open for business, a litre of petrol sold for as much as N120 to N140 even as customers are made to pay as much as N200 to N300 as toll fare before they are served petrol.

    Our correspondent was forced to part with N200 to obtain fuel at a filling station in Abule Egba axis of Lagos even as she observed that many other gas stations along the Lagos-Abeokuta corridor sell petroleum products at outrageous cost due to scarcity of the product.

    Economics of petrol pricing

    The major reason most of them adduced for the high cost is the non-availability of the products even as they argued that the landing cost of the product has risen astronomically.

    Confirming this development, Mr. Babatunde Ogun, President, PENGASSAN, in an exclusive interview with The Nation over the weekend said the landing cost of petrol may have led to increase in the pump price.

    “Using the Petroleum Products Pricing Regulatory Agency (PPPRA) template analysis, if subsidy is withdrawn the landing cost for November is N139.96. At official pump price of N97 the subsidy is N42.96 per litre of PMS,” Ogun said.

    He further noted that, “The vagaries of crude oil market may jack the price up or down within to put the subsidy at between N40 and N45 per litre. That will invariably affect other economic indices like inflation, consumer price index and purchasing power parity.”

    As to why the nation is witnessing a decrease in the importation of petrol, he said, “The marketers don’t have the fund or capital of their own to import.”

    According to him, “The bulk of the capital fund in petroleum product marketing and distribution say 80 percent has gone into those basic infrastructures and equipment like building facilities for landing, storage, trucks, retails station and recurrent overheads, initial formation and licences and safety/training costs expenses are all key requisites that will even determine whether the business will be allowed to remain a going concern or not.

    “Thus, banks short-term loans, even as high as it can be, is the last resort. Worst still, no hope on capital market again as it is no longer attractive even for PLCs.

    “Due to the non-payment of subsidy and all the negative reports, loan to petroleum import is considered high risk and toxic and most banks would not take such risk that is further compounded by the stringent conditions to loans by the CBN and NDIC as oversight regulatory and enforcement functions.”

    Given the difficulties in accessing subsidy funds, the PENGASSAN boss said, “It is no longer possible to guarantee supply which is contingent on fund availability with the terms and conditions attached to it.”

    Still speaking on the vexing issue of subsidy, Ogun said, “So far, subsidy is ridden with so much corruption, mismanagement, scandals of fictitious importation and claims some of which are difficult to verify the truth or otherwise.

    “The national question today is to find out clearly to whom subsidy should be directed. Is it being directed to the targeted beneficiaries who are now buying far above the pump price yet the importer still goes back to get subsidy difference at N97 per litre.

    “I consider that subsidy is now a rip-off and we should re appraise the whole gamut and intent of subsidy.”

    New pump price a fait accompli

    Even as Nigerians groan under the weight of volatile pricing, there are indications the Federal Government may jack up the pump price from N97 to about N120 per litre, if fuel subsidy is withdrawn.

    The hint on the new pump price emanated from a fact-sheet presented to select leaders of four political parties at the Presidential Villa, Abuja recently.

    The document, obtained exclusively by The Nation states that subsidy must go, in the interest of the nation’s future and the masses.

    According to Finance Minister, Dr.Ngozi Okonjo-Iweala, the removal of subsidy has become inevitable because of the drain on the economy.

    Mrs Okonjo-Iweala hinted on what the pump price might look like next year, if the subsidy is removed.

    She said: “The landing cost of a litre of PMS is about N123 per litre, based on an average crude oil price of US$113.98pb. To this, add the cost of distributing, bridging and profit margins of N15.72 per litre. This results in effective cost of N139/litre.”

    Specifically, Okonjo-Iweala noted that “In 2012, the landing cost of a litre of PMS is estimated at N104/litre, based on a crude oil price of US$90pb. To this add the cost of distributing, bridging and profit margins of N15.72/litre. This results in effective cost of N120 per litre.

    “The amount of subsidy equals to the difference between the consumer pump price of fuel versus the total cost of producing or importing. The price of petrol is N65 per litre, but actual cost of supply is N139 per litre. And projected at N120 per litre in 2012.

    “This means that currently for every one litre of petrol purchased at the official price of N65, government contributes N73. Presently, only petrol and kerosene enjoy government subsidy. Diesel has already successfully been deregulated.”

    John Iyobhebhe, a public affairs commentator based in London spoke on the pros and cons of subsidy removal.

    According to him, “There is a prevailing view in Nigeria that the new Minister for Finance and Coordinating Minister for the Economy is advocating the IMF and World Bank Nigeria agenda. The theory is that deregulation and removing the subsidy may initially lead to inflationary pressures but as the market is opened up to investors billions of dollars will flow into the down steam sector and more private refineries’ will open for business in Nigeria.”

    He, however, stressed that, “If the government is indirectly pursuing the IMF agenda for Nigeria then the removal of the subsidy is just one puzzle in the massive jigsaw. Inflation will erode the purchasing power of the Naira in people’s pockets. If you add official or market devaluation of the naira in the foreign exchange markets, it means that businesses and individuals holding their wealth in Naira will see it fall even further.”

    The government, he further warned, must be careful because according to him, “Inflation, high unemployment, devaluation and massive retrenchment in the public and civil service are a dangerous cocktail.”

    As the search for a lasting solution to the perennial fuel crisis lingers, many it has been hotly debated that deregulation of the sector would help to turn the tide in the sector.

    This curiously is the stand of many of the marketers, who have been pushing for total deregulation.

    The Executive Secretary, Major Oil Marketers Association of Nigeria, Obafemi Olawore, and the Chairman, Depot and Petroleum Products Marketers Association of Nigeria, Dapo Abiodun, had in separate interviews recently, called for total deregulation of the sector.

    Speaking with our correspondent, the marketers told our correspondents that Nigerians should be ready to buy fuel at higher prices in 2013.

    Chairman of the Independent Petroleum Marketers Association of Nigeria, Port Harcourt Unit, Mr. Sunny Nkpe, said since the President said fuel subsidy was not sustainable, Nigerians should get ready to pay more for fuel.

    Currently, the Nigerian National Petroleum Corporation is solely responsible for the importation of fuel.

    But the NNPC spokesman, Mr. Fidelis Pepple, have blamed marketers for the current fuel scarcity.

    He said the marketers had not been selling products, which were supplied to them.

    But the marketers faulted him, saying the fuel imported by the NNPC was inadequate.

    In spite of the NNPC’s insistence that it had imported adequate fuel, there is a shortfall in supply.

    Besides, the NNPC, which had abandoned oil pipelines, is relying on depot owners and marketers for distribution of fuel.

    It is, however, instructive to note that pipeline vandalism is also at the centre of the fuel crisis as the Federal Government is said to loss about N105bn to activities of pipeline vandals annually.

    This figure represents the cost of crude oil either stolen or wasted during such vandalism on the 5,120km of pipelines across the country.

    While commenting on the menace of vandals, Ogun observed that, “Pipeline vandalisation comes from defective problems from foundation. Poor Installation, irregular maintenance and repairs worsened it. Community policing and surveillance is poorly managed. Compensation is misdirected no clear obligations or sanctions to community. All these factors need to be reassessed for effectiveness.”

    In search of vibrant refineries

    The Dr. Kalu Idika Kalu committee had recommended that all the four refineries in the country be put for sale within the next 18 months, so as to get new ones on board. But not many people share this view.

    Speaking on the outcome of Kalu committee report, Ogun observed that there was nothing wrong with the committee’s recommendation but noted that certain things have to be clear.

    “We as oil and gas workers are not averse to privatisation. But the government cannot sell their stake for strategic and security reasons. Two, immediate sale without TAM is unacceptable, the privatisation cannot be done in less than three years time considering all labour related issues, pension, severance etc, the sale of PHCN and NITEL is an example. So if you sell after three years, the new buyer uses another two years to make business decision and look for fund and another two years for the TAM. “Invariably the committee didn’t want the country to refine crude in Nigeria for the next eight years. This is unacceptable. The TAM must start now without any further delay. Government only give the contract to a reputable firm and a bank guarantee.”

    On why most oil companies operating in the country don’t have their refineries unlike other countries, the PENGASSAN boss laid the blame on the legal framework obtainable in the country.

    “Our law gave the companies that chance. The companies are businessmen, but government can address this anomaly in our PIP. Any company producing 200k oil and above must have a stake in refinery in Nigeria.”

    Speaking further, he said, “The inefficiency is as a result of policy and government tedious approval process. A new well-structured PIB will address that.

    “All this position has been canvassed by both unions in the oil gas to government since. But government has been running from one committee to the other.”

    As the year rollover, the buzz word in different discussion groups shows that many Nigerians out there are indeed in a quandary, with many asking the obvious, “Where do we go from here?”

    Time, will tell.

  • FG to blame for CPC’s underperformance—CPC boss

    IN what appears to be an obvious blame game, the Director General of Consumer Protection Commission, CPC, Mrs Ify Umenyi, has attributed the lacklustre performance of the commission to the failure of the federal government to empower the commission through sustainable policy.

    She added that lack of funding from the government has rendered the commission incapacitated in the last 13years and has made it difficult for Nigerians to feel the impact of the agency.

    She said notwithstanding that, the current administration of the agency was resolved to uplifting CPC from an obscure position to a prominent one, using its limited resources, through the innovative execution of its policies and programmes.

    Umenyi said the agency so far has been able to establish offices in the country’s six geo-political zones, in Lagos, as well as in the Federal Capital Territory.

    She said CPC under her dispensation had also executed surveillance and enforcement operations in different markets as well as the successful prosecution of offenders in Kano, Lagos, Zaria and Kaduna.

    Umenyi also listed the successful resolution of hundreds of thousands of consumer complaints; conducting of quality tests and analysis, introduction of products and services listing and monitoring programmes, as well as collaboration with sector regulators and national standard bodies as part of the agency’s accomplishments.

  • Media effectiveness check

    MASS Communication 101 threw up so many “must-know” at the new undergraduate students in Mass Communication department to the extent of amazement. On the one hand, the new learning was compulsory for purpose of passing examination and on the other hand, it registered as though one was reliving Mongo Park’s experience when he “discovered” River Niger. One of such exciting new learning was the peculiar nature of those characteristics that distinguished radio from other media of mass communication: ubiquitous, most penetrating, rural, largest listenership engagement, cheapest for advertisers (both in terms of cost per reach and opportunity to hear/reach…the peculiarities continue.

    A good number of my course and class mates opted for radio under broadcasting, as against television, not to mention print journalism. I was tempted to try out radio broadcasting, but there was John Momoh always on TV screen at 9pm with the national network news, and coming to class the next day with all the trappings of a super star, and then the confinement (or entrapment?) of the audio studio…I was not thrilled.

    For me and some others in my class then, print journalism enables the most freedom of the three major options available to us then. Print threw up the opportunity of individualism in the demonstration of talents and abilities, the opportunity of photography, the creativity of prose writing, the by-lines expressive of individuality, etc. With print journalism, I do not have to be trapped in a cubicle inside a studio, confined for the definite measure of heat from the lightings, and I did not have to further labor to learn how to manipulate the audio console.

    It became clearer to us all as we grew in training, that whatever the choice we made of the options available in of specialization, journalism or mass communication is same in purpose, functions, roles and duties. Whether taken from the angle of electronic or print, journalism is about (1) information (2) enlightenment (3) orientation (4) awareness (5) entertainment. A particular course was designed to sum the role of journalism, no matter from what angle we practice, to be MASS COMMUNICATION FOR AWARENESS.

    AWARENESS is the platform for change. During the period of apartheid in South-Africa, people sacrificed all to generate and broadcast the critically important information needed to build the army against apartheid. In India, fighting poverty became a national challenge and mass communication became one of the tools used to whip up the needed emotional engagement for attitude change. So, people say information is power; journalism is about information – gathering, processing and dissemination, for positive change.

    So much has happened in sphere of information gathering and dissemination over the years, to constrain or reference to the journalism environment of even the last 5years. Apart from the most obvious technological advancement, media habits have changed dramatically, new and hitherto unimaginable media vehicles spring up every day. The equation has far changed in terms of sources, method of processing and avenues for dissemination of news and information. As a matter of fact, information has been more finely subjected to detailed definition and description; financial news, for instance, is now more differently gathered, processed and disseminated from political news. So many other categories and compartmentalization have followed in the definition of news recent times.

    In spite of all of these changes, however, the basic fundamentals have not changed. Obviously consequent upon technological advancement, there seem to be a resultant consequence of change in the effectiveness of journalism as change agent and a driver of societal growth and development. That poses a challenge we intend to put in focus for all, starting with the RADIO medium.

    With all its strength, Radio stands at the vanguard in the measure of efficiency in the discharge of its duties, versus other media vehicles. As noted above, radio is most penetrative, most user-friendly, frontal in audience engagement, most adaptive to rural usage, not discriminatory of literacy level, appealing and most persuasive. More on effectiveness check the following extraction from a study says so much about radio medium:

    – a tool for democratization

    – a platform for the expression of ideas and opinions

    – an alternative media to the imperfections of public and commercial media

    – a conflict management tool

    – an agent of social change

    – a channel for the diffusion of information on rural issues

    – a tool that can be used for training and the transfer and exchange of knowledge and technologies

    – a channel for interactive communication, dialogue and debate on the major issues of rural development

    – a medium to collect local information on social issues, which is essential for defining, planning and implementing local development efforts

    – a tool for cultural expression and entertainment, and a means of collecting, preserving and promoting the oral and musical heritage of rural communities

    – a tool for social investigation

    FAO’s Extension, Education and Communication Service summarize the most important functions of rural radio as above.

    In Nigeria media environment, however, the prevalent practice among radio stations (brands) amount to compromise on the efficiency of the radio medium, abuse of a system and a disservice to the people/listeners. Radio medium in our environment has essentially been reduced to commercial or business venture. Programming has been divided into two – 75% entertainment (for business gains), 20% news and 5% religious programs. In a purpose-driven environment, the primary role of radio is public information and enlightenment for positive change. Broadly put, 97% of the active radio stations among the 120-154 recorded stations in Nigeria sell revenue-attracting entertainment programs. News time belt is quickly taken as compulsory distractions. But for international agencies such a Society for Family Health, the HIV/AIDS campaign would have been ignored. Programming requires the right sense of responsibility, commitment and the right investment approach.

    Worse of all is the present system which even puts the cost of the radio stations’ discharging their duty on the listener in form of audience-participatory PHONE-IN PROGRAM. The broadcast commission and consumer protection council must check this trend. I pity callers who are made to load their GSM phones to call presenters to keep their programs on air. Because most of these presenters are not adequately equipped, they are quiet without callers. It is bad enough that radio stations cannot design programs beneficial to the society, it is even worse that the same compromised listeners are made to pay for these stations to be in business.

    Our suggestion is for the broadcast commission to review broadcast licenses of all the radio stations with a view to entrenching professionalism, responsibility and efficiency in line with global professional ethical standard. Our radio stations must add value.

  • Sambo, Buhari others for CEOs awards

    VICE President Namadi Sambo is billed to attend the annual edition of the CEOs Dinner/Awards Nite being organised by the management of AES Excellence Club.

    The event which holds in Lagos this Friday, according to the Asst. Registrar of the Club, Tony Ajiboro, will feature two eminent speakers including former Head of state, Gen. Muhammadu Buhari, who will deliver a lecture on the theme, “Good Governance-Art of Nation Building” while the Honourable Minister of Works, Arch Mike Onolememen, will speak on the topic: “Ministry of Works: The Transformational Agenda of the Goodluck Jonathan Administration.”

    The highpoint of the event will be the conferment of the prestigious AES Life-time Excellent Leadership Awards on Chief Dr. Alex Ekwueme, Dr. Christopher Kolade, Alhaji Maitama Sule, Chief Sunny Odogwu and others.

  • NUC partners SMEDAN on entrepreneurship

    IN its quest to link the universities and the organised private sector, the Executive Secretary of the National University Commission (NUC), Prof. Julius Okojie, has initiated moves to partner with the Small and Medium Enterprise Agency (SMEDAN), especially in the training of university lecturers on entrepreneurship.

    Okojie disclosed this at a one-week training of trainers’ workshop for instructors of Entrepreneurship Development Centre for Nigerian Universities in Abuja, stating that lack of employment has eaten deep into the economic fabric of the nation.

    He said, “To address this problem, NUC is partnering with SMEDAN and the University of Ibadan to train university lecturers in entrepreneurship development. There is no gainsaying that entrepreneurship education would enable the youths to take advantage of the emerging economic transformation taking place in Nigeria thereby strengthening their individual financial capacity and collective national economic growth.”

  • Contract workers not sacked, says Chevron

    Chevron Nigeria Limited (CNL), operator of the NNPC/Chevron Joint Venture, has denied reports making the rounds that it asked any of its labour contractors to lay off workers.

    The General Manager, Policy Government and Public Affairs (PGPA), Mr. Deji Haastrup, in a statement over the weekend gave this rebuttal.

    “This clarification has become necessary in view of reports by some media suggesting that a number of workers have been sacked, “ Haastrup said, adding, “six existing labour contracts will be expiring on December 31, 2012 and new contracts will commence immediately after. The transition will not lead to redundancy.”

    Haastrup further explained that the tender process has gone through all the appropriate phases and NAPIMS has approved and directed the award of contracts to the successful bidders, commencing on January 1, 2013.

    The CNL Director, Human Resources and Medical, Mrs. Ihuoma Onyearugha, confirmed that “all workers will have the opportunity to work for the new contract companies, unless they choose to retire with accrued benefits.”

    CNL is engaging with all stakeholders, including the National Union of Petroleum and Natural Gas Workers (NUPENG), NNPC and the Ministry of Labour to find a lasting solution to the on-going industrial action.

    The Nation gathered that the management of Chevron Nigeria Limited is discussing with the contract workers and has offered good disengagement benefits for those willing to go. It was learnt that some of the workers can get as much as N60 million as benefit if they voluntarily opt to go.

  • Group to oil firms in Lagos: Relocate or risk litigation

    OIL firms with headquarters outside their operational base have been given marching orders to relocate their offices or risk legal action.

    Giving this charge recently was Mineral Resources Awareness Initiative of Akwa Ibom, a non-governmental organisation. The group said if the companies failed to comply with the request within three months, it would not hesitate to employ all legal measures to compel them.

    Chairman of the group, Mr. Victor Akpan, who spoke at a press conference in Lagos, said the development whereby oil companies operate in the state and leave their head offices in Lagos State was unfair.

    Akpan said, “We wish to emphasise here that our feelings are the true reflections of the minds of the people of Akwa Ibom State. We are not happy with the ugly situation where oil firms continue to remain adamant to several calls for relocation of their administrative headquarters to Akwa Ibom.

    “It will be recalled that the late Sani Abacha administration had directed all the oil companies operating in the country to relocate their administrative head offices to their areas of operations.

    “The directive was adhered to by Shell Petroleum Development Company. SPDC has since relocated to Rivers State many years ago. One wonders why other oil companies have not taken a cue from the SPDC.”

    Akpan therefore urged the affected companies to be good corporate citizens and relocate their headquarters to the state.

  • Lubricant manufacturers, counterfeiters on warpath

    MOST businesses either get ruin by what they choose to do or fail to do at any point in time. And for members of the Lubricant Association of Nigeria (LUPAN), most of whom have had a run of misfortune owing largely to the activities of counterfeiters masquerading as genuine businessmen, perhaps now is probably the time to go on a warpath with the latter.

    Reason: a huge industry has been built around substandard lubricants by these conmen and their ilk, a development which analysts argue, has taken a heavy toll on the local market.

    Independent investigation carried out by stakeholders in the sector has revealed that the economy is being short-changed one way or the other by the nefarious activities of merchants of fake lubricants and other allied products.

    From available statistics, the country is said to lose over N200billion yearly to a syndicate group involved in the faking of existing brands in the market.

    One individual who should know better is Mr. Ayobami Odetola, Lube Operations Manager, MRS Oil Nigeria Plc.

    According to him, “Nigeria’s economy loses over N200 billion annually, due to influx of adulterated lubricants and the fact that most people patronise road side engine oil dealers.”

    Odetola, a member of lubricants sector stakeholders, disclosed this recently while briefing newsmen on the initiative by stakeholders in the downstream sector to begin a nationwide public enlightenment campaign on lubricants market sanitisation.

    He said: “The economy also records a huge cost of over $250 million as outflow that is not necessary to import base oil yearly. Nigeria is the largest importer of used cars and about N100 billion is incurred as unnecessary spending on adulterated lubricants, while over N30 billion goes into treatment of respiratory infections caused by environmental hazards of fake engine oil across the country.”

    Also speaking, the Gas Manager, Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Olasupo Agbaje, explained that the campaign became necessary following a ministerial directive to the Agency by the Federal Ministry of Petroleum Resources, to coordinate the regulation of base oil and sale of lubricants in the country.

    He said, “We are working with the Department of Petroleum Resources (DPR) and Standards Organisation of Nigeria (SON) to stamp out the scourge of lubricants adulteration and illegal trading of base oil in Nigeria.

    “The mechanism to sustain the campaign has been put in place and severe sanctions will be given to offenders in the sector.

    “The campaign is aimed at educating Nigerians on the dangers of adulterated base oil being used as lubricants and the need to procure lubricants through authourised sources.”

    He added, “Procurement, distribution and retailing of base oil and adulteration or improperly packaged lubricants by unlicensed vendors over the years resulted in such hazards like, malfunctioning and damage to engines and machinery, adulteration of edible oil with hazardous health implications, environmental pollution and destruction of the source of livelihood of genuine practitioners in the industry.”

    Expectedly, concerned stakeholders like LUPAN, many of which have been at the receiving end of product fakers are not leaving any stone unturned in their quest to rid the sector of unscrupulous individuals bent on jeopardising their business interest.

    In a statement made available recently to journalists by the Executive Secretary of LUPAN, Mr. Emeka Obidike, he said the association is also appealing to the Federal Government to as a matter of urgency, review downwards to 5 percent the import duty tariff on base oil which is the chief raw material that is used in producing their lubricants.

    The LUPAN executive secretary said lubricants produced in the country are produced with strict compliance with regulatory standards locally by SON and the Department of Petroleum Resources, DPR, alongside other international standards, adding, however that most lubricants imported into the country do not comply with these regulatory standards.

    He said some of the lubricants brought into the country sell at cheaper price than genuine products, adding that more worrisome is the import duty tariff of 10 per cent which is the same for imported lubricants and for base oil which is the major raw material used by lubricant producers in Nigeria.

    He added that the association is seeking a higher tariff regime for imported lubricants in order to protect local producers as well as remain competitive in the market.

    Not leaving anything to chance, LUPAN led by the Vice-Chairman, Alhaji Ado Mustapha Muhammed, who doubles as the Chairman/CEO AMMASCO Oil, has also reached out to regulatory authorities like the Standards Organisation of Nigeria (SON), Department of Petroleum Resources (DPR) with a view to stemming the incidence of adulterated lubricants in the local market.

    Accompanied by the other members of the executive council, Muhammed paid the DG of SON, Mr Joseph Odumodu a courtesy call.

    The LUPAN boss while canvassing the association’s position, had argued that, “Apart from investing heavily in state-of-the-art factories as well as in research and development, our members are high employers of labour and as such are ready to partner with SON in all fronts to ensure sanitisation of the market, to ensure that it is devoid of substandard, fake and adulterated products.”

    According to them, this negative trend in the wake of President Goodluck Jonathan’s much-touted local content agenda, signals danger to users, the nation’s economy and could cripple the local industry if urgent steps are not taken to arrest the disturbing trend.

    Expressing confidence in the SON’s leadership to bring sanity to the oil lubricant market, Muhammed called on the Federal Government to review downward the high import duty on base oil, which is the chief raw material for the production of lubricants.

    In response, Odumodu, allayed the visiting team’s fears, adding that SON was embarking on registration of all products including oil lubricants in the market within the next few months.

    He said this is part of deliberate measures to sanitise the market, to ensure standards are adhered to by manufacturers and that consumers have value for their money.

    According to him, the nation’s economy was being threatened by the twin problems of fake/substandard and adulterated products, whether they are imported or produced locally.

    “There are standards and we are ready to enforce it, I can assure you. We have launched the zero –tolerance campaign, and for us it is a new beginning,” Odumodu said.

    Stakeholders are, however, curious that many months after the regulatory authorities gave what appeared to be blessed assurances, no concrete steps have been taken thus far as lubricant fakers have become too daring in recent times.

    Echoing similar sentiments, Chief Nnamdi Williams, an erstwhile staff of the Nigerian National Petroleum Corporation (NNPC), said the authenticity of most lubricants sold in the local market is questionable.

    “A well-refined lubricant helps to reduce the knocking or breakdown of the engine,” Williams declared matter-of-factly.

    Expatiating, he said, “If you use a gasoline with a very low octane number, you invariably shortened the lifespan of that engine,” adding: “It is regrettable that most of the lubricants you find in the market are not just cheap but of low quality, thereby endangering the lifespan of most machineries, including industrial equipment. The regulatory agencies, I daresay, have a lot of work to do beyond paying mere lip-service to the fight against adulterated lubricants.”

  • NEITI vows to recover N1.3tr underpayment  from firms

    NEITI vows to recover N1.3tr underpayment from firms

    The Nigeria Extractive Industries Transparency Initiative (NEITI) yesterday vowed to recover the N1.3trillion revenue loss due to under-assessments/underpayments by companies covered in its previous oil and gas sector audit.

    NEITI chairman, Ledum Mitee, who spoke during the Civil Society Organisations (CSOs) roundtable meeting in Abuja, said: “NEITI can no longer sit and watch and allow these recoverable funds in the hands of companies at a time the Federal Government is searching for funds to finance the deficit in the annual budget.”

    He explained that most of the outstanding payments were pending because there has not been sufficient push by those involved to collect the money.

    He said: “If we tell you, look, you are supposed to collect this money and we are determined that this is the process with which this money should be collected and you have not done it, and because of that we want to take you to court , then people will know that you are the problem why we have not gotten sufficient money.”

    The said in accordance with the law, the tax collector is to mandatorily collect the tax, or be liable for defaulting in his /her duty .

    Mitee said the Federal Executive Council has approved N148.95million for the audit of the fiscal and statutory disbursements from the Federation Accounts from 2007 to 2011.

    He said the audit would be conducted on the Niger Delta Development Commission, Petroleum Technology Development Fund, Central Bank of Nigeria, Shares of Derivation and Ecological Fund, Administration and Application of Excess Crude Account, 13 per cent Derivation Allocation to states and Local Government Councils and the Ecological Funds, among others.

    He noted that the extractive industry transparency initiative principle was founded and rooted on the Multi-stakeholders of government, industry and civil society.

    The NEITI chief said the need to broaden the scope of society’s participation, informed the establishment of the Civil Society Forum.

    The Executive Secretary, Mrs. Zainab Ahmed, said the report of the oil and gas from 2009 – 2011 has been concluded.

    The Director, Communication, Dr. Orji Ogbonnaya Orji, who represented her, said the final report will be submitted to the National Stakeholders Working Group during its next meeting slated for December 14, 2012.

    On the Petroleum Industry Bill (PIB), she urged the Civil Society not to stay aloof but continue to work with NEITI to ensure that the petroleum law meets the standards of transparency, accountability and good governance.

  • Petroleum Ministry records 93% budget

    Petroleum Ministry records 93% budget

    The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has said about 93 per cent of the 2012 budget appropriated to the Ministry has been utilised.

    She spoke yesterday during the 2013 budget defence before the Senate and House of Representatives Joint Committees on Petroleum Resources in Abuja.

    The Nigerian National Petroleum Corporation, Ag. Group General Manager, Group Public Affairs Division, Fidel Pepple, in a statement, said, Madueke expressed optimism that by the time the fourth quarter budgetary allocation for the Ministry is released, other additional capital projects captured in the budget would have been implemented.

    “Out of what has been released so far in the 2012 budget, we were able to handle 93 per cent performance, and we hope that by the time the fourth quarter allocation is released within the window of procurement which is March next year, we will be able to complete all our projects which were earmarked for this financial year. So on the basis of what we have seen and done so far, we are surely on track,” she said.

    On her expectation for the 2013 budget, she said key areas, such as oil exploration in the inland basins- such as Chad Basin and Bida Basin – would be pursued, adding that emphasis would be placed on the implementation of the Local Content Policy to create jobs for Nigerians in the industry.

    Meanwhile, the Federal Government has set aside N6.201billion for awareness campaign for the Petroleum Industry Bill (PIB).

    This is contained in the breakdown of the 2013 budget of the Ministry of Petroleum Resources presented to the joint committee of the Senate and House of Representatives on Petroleum (Downstream).

    The awareness campaign is planned to take place nationwide to sensitise Nigerians on the necessity of the Bill. Although the awareness began in 2010, it is expected to run until 2015.

    The figures also showed that so far N110.87million has been released and spent, leaving a balance of N6.09billion.

    However, N17.23million was earmarked for the project in 2012, but details of the expenditure were not included in the document.

    The Bill has scaled second reading in the House of Representatives and committed to relevant committees of the House while it has passed second reading in the Senate.