The Nation Newspaper

Tag: Andrew Yakubu

  • An elitist sermon

    An elitist sermon

    The NNPC GMD’s call to use gas instead of kerosene  sounds like what triggered the French Revolution

    The wife of Louis XVI, Marie Antoinette, wondered why the protesters on the streets of Paris clamoured for bread when they could have cake. It infuriated them, and led to a rabble that torched the city and the French monarchy.

    Similar language came from the leadership of Nigerian oil. We know that there are advantages in switching from kerosene to Liquefied Petroleum Gas (LPG). These include the provision of a cleaner and safer fuel option, especially for lower income households, reduction of indoor air pollution that causes significant health problems and a decline in carbon emissions caused by dirty fuels; but the decision of which to use should be for the consumers to make. It should not be imposed on them in a manner akin to the ‘if you can’t find bread, eat cake’ fashion. That is why it is not a befitting sermon from the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Andrew Yakubu, and the chief executive of the Pipelines and Product Marketing Company (PPMC), Mr. Haruna Momoh, two people who are critical to making kerosene available in the country but have failed to do, to ask Nigerians to switch from kerosene to LPG.

    Messrs Yakubu and Momoh, while testifying before members of the Dakuku Peteside-led House of Representatives Committee on Petroleum (downstream) investigating supply, distribution and subsidy expenditure on kerosene from 2010 – 2013, said the solution to the lingering kerosene scarcity lies in switching over to LPG because this will reduce pressure on kerosene and ultimately lead to a drop in the demand for it. This excuse is full of the usual trappings of public officials who rather than be pragmatic about solutions to our problems sniff for excuses for the easy way out.

    The duo failed to take cognisance of the fact that cooking gas is costly and is beyond the reach of many Nigerians. One reason for this is the absence of a clear-cut policy to drive LPG consumption by the Federal Government. The fact is that deliberate government policies account significantly for the much progress made in countries like Brazil and Morocco, where LPG consumption is high. There is also the fear of gas in our society that would make people prefer kerosene that they perceive as safer and easier to handle. So, unlike Brazil and Morocco, the Federal Government will have to work harder to convince Nigerians to use gas.

    There was nothing new in whatever the duo told the House of Representatives committee members, either from the point of view of economics, or environmental safety. But what they failed to add is that even their own recommendation will come to naught if the same business paradigm they are using in the NNPC, for instance, is transferred to the process of producing the LPG. It is scandalous that Nigeria, a major producer of crude oil imports the bulk of the fuel that is used in the country. And there are reasons for these, including corruption and governmental ineptitude. For these reasons, it will only be a matter of time for the same problems leading to scarcity of kerosene to afflict the production of LPG. This is one ‘Nigerian factor’ that Messrs Yakubu and Momoh, as well as many others who have been making a case for LPG for domestic use in the country appear to be overlooking. If we promote LPG for domestic use, which is the ideal thing to do, a time will come when more Nigerians will demand for it and the question of meeting the demand will surface.

    This is why we think the prescription of the duo is symptomatic of the typical Nigerian public official’s penchant to sidetrack rather than solve problems. Rather than tell Nigerians why kerosene remains scarce, which was the essence of their appearance before the House committee in the first place, they launched into the issue of LPG as solution to the scarcity. How does that explain why kerosene remains scarce despite the humongous amount the government pays as subsidy on the product? Yakubu himself admitted that about N8.49 billion was expended to subsidise a total of 5,015.413.022.06 trillion litres of kerosene in 19 months! So, why is the product still scarce?

    We know as a matter of fact that petroleum products are being smuggled out to neighbouring countries. We are also aware that the activities of pipeline vandals, the state of disrepair of pipelines and depots in the country, and the activities of unscrupulous elements who adulterate kerosene to sell it as automatic gas oil often referred to as diesel, all contribute to the scarcity of the product. All these are issues the government should tackle because they are the reasons why government exists in the first place. For as long as these issues are unresolved, it is immaterial whether Nigerians use kerosene or LPG, there will always be scarcity at some point.

    So, we restate: if cooking gas must be substituted for kerosene, it should be by choice and a deliberate policy on the part of government; it does not lie in the mouths of those who should make kerosene available and have failed in that responsibility to seek to impose gas on Nigerians. That looks to us a subterfuge to cover their shortcomings and the general ineptitude in the country. It is cynicism taken too far.

  • NNPC ‘spends N8.49b on subsidy in 19 months’

    NNPC ‘spends N8.49b on subsidy in 19 months’

    The Nigerian National Petroleum Corporation (NNPC) stated yesterday why it did not obey the presidential directive stopping subsidy on kerosene in 2009.

    According to the NNPC, which initially obeyed the late President Umar Yar’Adua’s directive for almost two years and then continued the practice in 2011, the corporation jettisoned the directive because it was not published in any official gazette.

    This position was maintained by Group Managing Director of the NNPC, Mr. Andrew Yakubu while speaking at the hearing organised by the Dakuku Peterside-headed House Committee on Petroleum (Downstream). The committee is investigating the supply and distribution of kerosene as well as the subsidy expenditure on kerosene from 2010 to 2013.

    NNPC Company Secretary Anthony Madichie corroborated Yakubu’s stance by citing the Petroleum Act’s Section 6 subsection 1, when speaking on the legality of kerosene subsidy.

    According to Madichie, only the Minister of Petroleum Resources has the authority to fix petroleum product prices. If a presidential directive is given and not gazetted, such directive will not be effective.

    But Yakubu failed to disclose how much was spent on subsidy between 2010 and 2013.

    He also could not provide the authority on which the subsidy deductions were made or how the funds for obtaining the product were sourced.

    He, however, said he was aware that N8.49 billion was spent on subsidising 5,015.413.022.06 trillion litres of kerosene as well as 15,177,76,123 trillion liters of fuel imported into the country within 19 months.

    Both Yakubu and the Managing Director, Petroleum Products and Pipeline Marketing Company (PPMC), Mr Haruna Momoh, gave reasons for consistent shortfall in the supply of kerosene.

    Yakubu said situations whereby the product is diverted to neighbouring countries and used for Industrial purposes, painting, adhesive, chemical and allied products cause scarcity.

    He also said the adulteration of diesel to kerosene and its use for aviation fuel, pipeline vandalisation and sharp practices of middlemen also contribute to non-availability of the product.

    He added: “There are quite a number of competing demands for kerosene and until these are addressed by other relevant agencies, the issue of kerosene not being readily available for domestic use will continue to reoccur every now and then.

    “The way out is for this committee to collaborate with the NNPC to encourage the sale of liquefied petroleum gas, otherwise known as cooking gas.”

    The NNPC boss said the corporation has increased the supply of LPG from 65,000 metric tonnes in 2011 to 250,000 metric tonnes in 2013. The ultimate target, he said, is to grow the consumption of the product to 500,000 metric tonnes by the end of this year.

    According to him, the improved consumption of liquefied petroleum gas or cooking gas will surely reduce the demand for kerosene.

    Momoh expressed the same opinion, saying that PPMC would ensure that pipelines and the depots are fixed as part of ongoing efforts to bridge the gap in supply of kerosene.

    According to him, by the time the 800,000 metric tonnes on the use of domestic gas is attained, kerosene use will reduce significantly.

    House of Representatives Speaker Aminu Tambuwal, while opening the hearing, flayed the secrecy engulfing the subsidy of kerosene.

    Tambuwal, who was represented by the Deputy Speaker, Emeka Ihedioha, said despite the fact that the government has spent about N1 trillion to subsidise the product, kerosene was still beyond the reach of Nigerians.

    He said: “This is just unacceptable and certainly not in the best interest of our people. It is important to note that the country has spent at least one trillion naira over the past four years to subsidise kerosene, yet the product is neither available nor is it sold at the official NNPC pump price whenever it is found and wherever.

    “Things are not helped by the fact that nobody has been able to tell us what our kerosene consumption volume is per annum. This attitude by government officials who continue to treat the issue of kerosene consumption volume as if it were a national secret is quite deplorable. Transparency and accountability are things that we should by now take for granted in 21st Century democratic Nigeria.

    “Moreover, the people, who are the only true justification for spending such huge subsidies on kerosene, have in no way benefited from the arrangement. Curiously, since there were no budgetary provisions for subsidy on kerosene, the people of Nigeria will obviously be interested in knowing the source of funding of kerosene subsidy and on whose authority such monies were appropriated.

    “These and several other issues warrant a full scale investigation into the mysteries surrounding the subsidy so that we can at last unravel the truth. Nigerians need to know to what extent kerosene subsidy is actually serving their vital interest.”

    The House has also adopted the recommendations of the report of an ad hoc committee that investigated the deal between Malabu Oil Limited and the Federal Government.

    The recommendations contained were adopted despite the observation of Rep Simon Arabo (PDP, Kaduna) who condemned the contents of the report.

    Arabo noted that the recommendations contained in the report were unconstitutional and out of the mandate given to the committee.

    He cited sections 4 and 6 of the constitution, stating that the report arrogated the role of the judiciary to the National Assembly. “This report is an embarrassment to this House. It’s unconstitutional for us to have such a report. We’re not part of the judiciary; so, we can’t play their role,” he said.

    The report was adopted as majority voted in its support.

     

  • We want kerosene sold at official price, says Peterside

    We want kerosene sold at official price, says Peterside

    The Chairman of the House of Representatives Committee on Petroleum (Downstream), Dakuku Peterside, has said one of the reasons behind the public hearing on kerosene subsidy is to ensure the product is sold at the official price of N50.

    Peterside spoke yesterday at the opening of the investigative public hearing on kerosene subsidy at the National Assembly complex in Abuja.

    The public hearing is sequel to resolution HR84/2013 of the House of Representatives, which directed its Committee on Petroleum (Downstream) to establish the actual amount spent on kerosene subsidy from 2010 to December 2013; establish the source of the money used in financing kerosene subsidy and the relevant budgetary approval; determine the companies benefiting from kerosene subsidy; establish the extent (if at all) to which the subsidised kerosene gets to the consumers at the regulated price; and investigate all incidental issues relating to kerosene supply and distribution.

    The Nigerian National Petroleum Corporation (NNPC) said the diversion of kerosene to neighbouring countries, industrial use, aviation fuel, sharp practices by middlemen and pipeline vandalism are reasons why kerosene is not readily available for domestic consumption.

    Group Managing Director of the Corporation Andrew Yakubu said: “There are quite a number of competing demands for kerosene and until these are addressed by other relevant agencies, the issue of kerosene not being readily available for domestic use will continue to reoccur every now and then. The way out is for this committee to collaborate with the NNPC to encourage the sale of liquefied petroleum gas otherwise known as cooking gas.”

    He said the NNPC has stepped up the supply of LPG from 65,000 metric tonnes in 2011 to 250,000 metric tonnes in 2013, adding that the target is to grow the consumption of the product to 500,000 metric tonnes by the end of 2014.

    The NNPC helmsman said the increase in the consumption of cooking gas would reduce the dependence on kerosene and help in the redistribution of kerosene.

    Responding to a question on whether kerosene subsidy is still in place, the NNPC GMD said that was what he met when he assumed office in June 2012, adding that kerosene subsidy is funded by unrealisable revenue flow. “The NNPC takes crude at international price and sells it at the domestic market at regulated price of N50 per litre,” he said.

    Answering a question on what the NNPC is doing to stop kerosene diversion, the NNPC boss said the corporation does not have the power to police marketers and sanction them adding that there are statutory bodies with the responsibility.

    NNPC Company Secretary, Anthony Madichie, citing Petroleum Act section 6 subsection 1, said only the Minister of Petroleum Resources has the authority to fix petroleum product prices, adding that if a presidential directive is given and not gazetted, such directive will not be effective.

    The Managing Director of the Pipelines and Products Marketing Company (PPMC), a subsidiary of the NNPC, Prince Haruna Momoh, said kerosene is sourced for the Nigerian market through importation and domestic refining, adding that Dual Purpose Kerosene is sold to coastal marketers, Major Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and NNPC Retail.

    “I can confirm to this committee the statistics for the supply of DPK is as follows. In 2010, NNPC supplied 2,515,582.44 metric tonnes of DPK, in 2011, NNPC 1,922,263.56 metric tonnes, in 2012, NNPC supplied 2,622,843.20 metric tonnes and in 2013, NNPC supplied 2,671,747.97 metric tonnes making a total of 9,732,437.17 metric tonnes,” Momoh said.

     

     

  • We’ll ensure kerosene subsidy is accounted for, says Peterside

    We’ll ensure kerosene subsidy is accounted for, says Peterside

    The Chairman, House of Representatives Committee on Petroleum (Downstream), Dakuku Peterside, has said the committee will make sure that kerosene subsidy payments are accounted for.

    He spoke yesterday while announcing the postponement of the committee’s proposed investigation into the kerosene subsidy.

    Peterside said the postponement was due to the absence of the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Andrew Yakubu and the Pipeline and Products Marketing Company (PPMC).

    The hearing will now hold on February 18.

    This is the second time the investigation has been pushed forward.

    The Committee had in its letters to the three principal actors in the sector requested for the provision of “all relevant detailed information as it relates to approvals on kerosene subsidy, source of money for payment of the subsidy, budgetary approvals, kerosene import details, PFI allocation and product distribution chart, PPPRA authorisation and validations, auditors approval and reports, relevant shipping documents and all other documents that will assist the committee in discharging its responsibility.”

    A letter from the Office of the Permanent Secretary, Ministry of Petroleum Resources, dated February 7 but received in Peterside’s office a few minutes before the commencement of the probe yesterday gave excuses for the absence of the Minister and requested for a rescheduling of the hearing.

    It reads: “I wish to inform you that the Honourable Minister together with the top management if the Ministry and its agencies will be participating in the International Summit on Power Financing starting today, 10th February, 2014.

    “As a result we regret to inform you of our inability to honour your invitation. We are also currently engaged with the Senate Committee on Finance and it is not clear when their hearing will end. “

    NNPC, in a letter by its General Manager, National Assembly Liaison, Mr. M.B Bamanga and dated February 7, gave the same excuse as the ministry. “I am further directed to appeal to the Chairman to allow NNPC and its subsidiary sufficient time to collate the required documents and reschedule an alternate date for the appearance of our organization at the hearing, please,” the NNPC said.

    The PPMC’s letter, also dated February 7, also followed the same format with the same excuse and request for additional time to collate documents.

    Peterside said: “It is not in the character of the seventh National Assembly to waste people’s time. On behalf of the committee, I want to apologise to you; we are going to be compelled by circumstances to put off this hearing to the February 18.

    “We owe you a duty to carry out the investigation, we will not let you down, we want to apologise once more, we will move on with the hearing February 18th.”

     

  • Sanusi playing politics with $49.8b claim – NNPC

    Sanusi playing politics with $49.8b claim – NNPC

    The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Engr. Andrew Yakubu, on Friday described the Central Bank of Nigeria (CBN) Governor, Mallam Sanusi Lamido Sanusi’s claim that the corporation failed to remit $49.8 billion into the Federation Account from January 2012 to July 2013 as a “political instrument for the 2015 general elections.”

    Yakubu, who spoke at a world press conference at Abuja, said it is a baseless and unfounded allegation targeted at ridiculing the management of the NNPC.

    He said: “In conclusion, I want to say from what I have said clearly that the allegation is unfounded. It is baseless and it has become a political instrument in the current politically charged environment. And we consider this as an attempt to ridicule the corporation and its management.”

    Asked to explain what he meant by political instrument, the NNPC boss added, “So, I am taken aback that this issue that came up about four months ago, we made our clarification to the Hon. Minister of Petroleum Resources four months ago and for it to surface at this time that the political atmosphere is charged, then we find it difficult. We are taken aback, then it is left for you journalists to do your investigative journalism to unravel the reason behind this attack.”

    Yakubu, however, explained that NNPC crude oil lifting include equity crude, royalty oil, tax oil, volume for third party financing and Nigeria Petroleum Development Company equity volume.

     

     

  • Oil crisis (3)

    Oil crisis (3)

    •It is time to redefine the status and operations of a corporation that manages the nation’s cash cow

    IT is 36 years since the Nigerian National Petroleum Corporation (NNPC) was established. Apparently concerned that the processes involved in prospecting, extracting and sale of oil, the mainstay of the Nigerian economy were fully controlled by foreign firms and experts, the Federal Military Government established the NNPC, following the merger of the erstwhile Nigerian National Oil Corporation and the Federal Ministry of Mines and Power. Today, the status of the resulting organisation is unknown. Is the NNPC a rent collection company, a corporation or a mere record keeper for the sector? In none of these roles is it efficient, transparent or effective. Its inefficiency has robbed the nation of billions of dollars in oil revenue over the years.

    The accounting system is opaque, deliberately so to prevent the public from asking the necessary questions, and the structure clumsy. This must change as we move into a new year and set to mark the second anniversary of the Great Uprising of January 2012.

    Incidentally, the group managing director of the corporation, Mr. Andrew Yakubu, had said last month that the corporation was complying fully with provisions of the Freedom of Information Act and would do all required within the law to furnish the public with details of its operations when necessary. He said: “Long before the Freedom of Information Act came into force, the NNPC has been maintaining an open door policy which sees it volunteering information to its various publics through press releases, advertorials and presentations at different forums, including hearings at the National Assembly…

    “We have since internalised the contents of that report and as a corporation; we are ready to ensure that our actions and processes live up to public scrutiny. Under my watch as GMD, I intend to abide by this principle.”

    The facts, as we see them, do not support the GMD’s contention. Neither the state governors nor former Economic and Financial Crimes Commission’s (EFCC) chairman, Mallam Nuhu Ribadu, would agree. At a recent retreat of the Nigerian Governors Forum, Ribadu said of the NNPC, “Today, the NNPC is a producer, an importer, a marketer and a regulator paying to the Federal Government what it likes at any time and treating the states and local governments in Nigeria as if they have no stake in the establishment.”

    The governors have been shouting that the Federal Government just gets the corporation to pay into the Federation Account what it feels. It is accountable only to the Federal Government. On many occasions, the finance commissioners from all the states have rejected what the Federal Government chose to offer them as their shares of the federally collected revenue.

    A forensic audit of the Federation Account by KPMG in 2011 showed, for example, a gross mismanagement of the oil subsidy account. This is still generating ripples. The National Assembly that ought to keep an eye on the corporation has done no more than being a toothless bulldog. At a public hearing, the House of Representatives held that the corporation sold crude oil worth $20.9 billion, but remitted only $7 billion. It did not go beyond the disclosure.

    Similarly, the Senate reported after public hearing that the corporation could not account for N500 billion that ought to have gone to fund the SURE-P operations.

    The starting point in cleaning up activities at the NNPC is to redefine its structure. What is its relationship with the supervising ministry? As Mallam Ribadu pointed out, the states and local government areas ought to be brought into the control. This means straightening the board to accommodate this suggestion.

    Fifty-seven years after oil was discovered at Oloibiri, Nigeria cannot continue to run a prime organisation like the NNPC as coal corporations were run in Europe in the nineteenth century.

  • NNPC cries out over loss of 150,000 bpd

    NNPC cries out over loss of 150,000 bpd

    • Put crude oil production at around 2.2, 2.3mbpd

    The Nigerian National Petroleum Corporation (NNPC), is losing 150,000 barrel per day (bpd), the Group Managing Director (GMD), Andrew Yakubu, has said.

    Yakubu attributed the loss to persistent attacks on major pipeline arteries supplying crude oil to export terminals.

    According to statement by NNPC’s Acting Group General Manager, Group Public Affairs Division, Tumini Green, yesterday, the GMD made the disclosure during his submission to the Senate and House of Representatives Joint Committee on the Medium Term Expenditure Framework (MTEF) for the period, 2014 to 2016.

    He said: “The critical and most important point to note here is that when the artery conveying crude oil to the terminals is hit, this reduces our production volume by 150,000 barrels per day for the period that the line is down, and that accounts for the drop in crude oil production. From February to date, we have witnessed so much breaches and each time we go down, about 150,000bpd goes down.”

    He said the Oil and Gas Sector is a key component of MTEF and any impact on it, will have a negative effect on revenue flow to the Federation Account. He lamented that the continuous crude oil theft, pipeline vandalism and shut-in, have constrained the sector from meeting its revenue projection.

    “We have looked at the 2014 oil projection from a realistic point of view, and we would continue to recalibrate it with the National Assembly and other relevant stakeholders, to ensure that the petroleum sector continues to play a key role in the national economy, Yakubu posited.

    He said there is no doubt that the menace of crude oil theft and pipeline vandalism have received the highest intervention from the President, Dr. Goodluck Ebele Jonathan which resulted in the institution of a Committee by the National Economic Council (NEC), comprising of some Governors, NNPC, Department of Petroleum Resources (DPR), International Oil Companies, (IOCs), Security Agencies and other relevant bodies to work out modalities to mitigate the menace.

    Commenting on the daily crude oil production figure, the NNPC GMD averred that the production figure has been very erratic as a result of the several attacks on the arteries from February to date adding that the daily crude oil production figure ranges between 2.2mpbd to 2.3mbpd.

    He said that the NNPC actively participated with the Budget Office in arriving at the MTEF adding that the Corporation will do everything possible to ensure that MTEF is achieved in terms of accruals from Oil and Gas projected input.

  • NNPC boss brother killed in robbery attack – Police

    The Police in Kaduna State on Monday confirmed the killing of Mr. Yohanna Yakubu, the younger brother of the Group Managing Director of the Nigerian National Petroleum Corporation, Mr. Andrew Yakubu.

    The Police Public Relations Officer in Kaduna State, Aminu Lawal, who confirmed the death, told the News Agency of Nigeria (NAN) on Telephone on Monday, that said Yakubu died in a robbery attack on Sunday.

    Lawal said the late Yakubu was killed in a robbery attack while travelling on the Kachia-Zango Kataf road in Kaduna and not assassinated, as is being speculated by a section of the media.

    “He was not travelling on official assignment; he was not in his official car. It was a robbery attack, that unfortunately happened that Sunday morning,’’ he said.

    He said the police was already working round the clock to arrest the perpetrators of the dastardly act and beef up security on the route and in the entire state.

    Meanwhile, the Management and Staff of the NNPC have commiserated with the corporation’s GMD over the incident.

    This is contained in a statement signed by the corporation’s acting Group General Manager, Public Affairs, Ms Tumini Green, on Monday in Abuja.

    It said that until his death, the deceased was the Chief Operator at the Power Plant and Utilities Department of the Kaduna Refinery and Petrochemical Company (KRPC).

    “While we await the outcome of the police investigation on this sad event our prayers remain with the entire Yakubu family,

    “We implore the Almighty to give them the fortitude to bear this great loss,” it said.

    It said the remains of the late Yakubu would be laid to rest on April 19 in his hometown.

    The deceased joined the services of the NNPC in July 1987.