Tag: Fed Govt

A major showdown looms today between the Federal Government and major oil marketers over fuel subsidy payment.

The disagreement over the marketers’ claims and their insistence on being paid immediately may elongate the fuel scarcity that has crippled business.

Minister of Finance and Coordinating Minister for the Economy Dr. Ngozi Okonjo-Iweala said in Abuja yesterday that the oil marketers “have formed a cartel that can ground the nation to a halt at will”.

She added that “the nation must do something about it”.

The Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Mr. Obafemi Thomas Olamwore, said the oil marketers would not back down at today’s meeting.

He told our correspondent last night that they would resist any attempt by the Federal Government to postpone the payment of the N200billion balance being owed them beyond two weeks.

The government, he insisted, must pay up before leaving office.

The outcome of the meeting, Olawore said, will determine whether the strike over the subsidy payment will continue or end.

Olawore denied that marketers were paid N156billion last week. He said N154billion was paid.

He added: “Bidding for importation by the marketers has reduced drastically due to lack of funds. That is the reason behind agitation for speedy payment of the debts owed us. “

The major marketers supply 60 per cent of fuel.

The minister said the government is owing them N131 billion based on Petroleum Pricing Products Regulatory Agency’s (PPRA’s)  template.

The minister attributed the fuel scarcity to the activities of a group of cartel determined to hold the nation by the jugular vain. She expressed surprise at their attitude, stressing that “they were more liberal in times past even when their outstanding was in the region of N2.3 trillion.

“It has become a situation where we have a cartel that can ground the nation to a halt at will. I strongly suggest that the nation has to do something about it. It has been very stressful for four years, trying to cope with a group that controls a very important sector of a nation and they are small enough to organise themselves.”

This, she said, “means that they can hold a nation to ransom anytime they want. And that is what is happening. I remember when I came back as finance minister on August 17th,  2011, the first thing that confronted me was this scandal of subsidies. By then, more that N 1 trillion had already been paid. And we went through that whole thing and since then we cleaned up, restructured and trimmed down.

“You see that the amount we have been paying year by year diminished substantially to about N971 billion a year, down from the N 2.3 trillion of 2011. We brought it from N 2.3 trillion to about N 971 billion that has been in the budget each year. So, we made very substantial restructuring and changes to the whole process that brought the amount down for the nation. But yet we have to deal with this problem and the whole country has seen us trying our best struggling”, Mrs. Okonjo-Iweala said.

She noted that oil marketers are a small cartel that are into no risk business, based on the template negotiated with the PPPRA a long time ago, which factored in exchange rate differential and profit margin guarantee – a situation she said, that leaves them with absolutely no risk.

The minister said: “The template that governs their business is designed to cover all their costs plus a profit margin. That is PPPRA template which I have quarrelled with for quite some. So it is really no risk business for them. Or very little risk. I am not saying there is no stress. Of course, they have stress. But the risks are all covered by the template that was negotiated with PPPRA long ago. And it is actually that template that we have been quarreling with.”

That template, Mrs. Okonjo-Iweala “says that they must be paid exchange rate differentials, interest rates, profit margin guarrantee plus the principal amount they spent in the business. Based on that, the government is taking a full risk of their business, according to this template. Even when we have revenue shortfall, any interest that accrues has to be paid by government. That is what was negotiated. So, they are in a no risk business and we have been pleading with them that if that is the case, at least supply Nigerians with the fuel because at the end of the day the government is still paying for all of this. Why are you making Nigerians suffer? Why these long queues?”

Last Thursday, the Federal Ministry of finance said it paid the marketers N156 billion and put  the balance at N98 billion. The minister said yesterday that the balance had increased to N131 billion, based on last figure obtained from the PPPRA. She said the figures constantly changed based on offloading of products.

THE Federal Government moved yesterday to end the lingering  fuel shortage being experienced nationwide. It succumbed to pressures from members of the Major Oil Marketers Association of Nigeria (MOMAN), who got N156 billion.

In a statement signed by Paul Nwabuikwu, a Special Adviser to the Coordinating Minister and Minister of Finance, Dr. Ngozi Okonjo-Iweala, the Federal Ministry of Finance said yesterday’s payment was “in line with the Federal Government’s commitment to prioritise payment to marketers in spite of revenue constraints.”

The latest payment, Nwabuikwu said, has two components. The first he said “consists of the cash backing of the N100 billion IOU which the marketers were given in March and the second is N56 billion in interest payments for the marketers according to the PPPRA (Petroleum Products Pricing and Regulatory Agency)template.”

Despite the payments, Nwabuikwu disclosed that the markers were still being owed a balance of N98 billion certified by PPPRA.

The statement reads: “The N156 billion is the latest in a series of significant payments made to the oil marketers within the last five months. These include over N300 billion in two installments in December last year and N31 billion in interest differentials recently. In all, oil marketers have received over N500 billion within the past five months.”

According to the statement, Dr. Okonjo-Iweala appealed to oil marketers “to appreciate the efforts being made by government to meet their demands, urging them to reciprocate with some understanding of the situation of Nigerians who should not suffer more.

“She urged the marketers to sustain the distribution and supply of fuel to end the suffering of Nigerians at fuel stations.”

The minister was reported as saying that, “the Federal Government has made maximum effort, in spite of the well-known fact that the fall in oil prices has significantly reduced national revenues, to prioritise payments to marketers.

“For the sake of Nigerians who are bearing the brunt of fuel scarcity, the marketers should reciprocate in the spirit of dialogue and cooperation in which we have always tried to engage them.”

Reacting to the released forensic audit report on Nigerian National Petroleum Corporation (NNPC) by PricewaterhouseCoopers (PwC), Dr Okonjo-Iweala said she  heard of the suit filed against her before a Lagos High Court by SIAO Partners, a group of three accounting firms.

Her adviser said: “The minister is yet to be formally notified of the suit but from information gleaned from media reports, the group is alleging that she appointed the global audit firm, PricewaterhouseCoopers (PwC) to conduct the recently concluded forensic audit of the Nigerian National Petroleum Corporation (NNPC) against the provisions of the Local Content Act.”

Nwabuikwu described the court action as “spurious in the extreme”, arguing that Dr. Okonjo-Iweala did not appoint the PwC to carry out the audit.

The statement expressed shock “that professionals of the calibre of SIAO Partners can embark on this kind of legal action without taking the trouble to do the minimum amount of homework to confirm basic facts.

It urged SIAO Partners to “immediately drop this totally baseless suit or she will see them in court.”

Reacting to the payment, MOMAN’s Executive Secretary Obafemi Olawore told the News Agency of Nigeria (NAN) in a telephone chat that the Federal Government’s gesture was appreciated by his association.

He commended the government for living up to its promises.

Olawore, however, said the association will not take any corresponding action until its members received payment alert from their banks.

According to him, members of the association will be ready to resume importation and distribution of fuel to end the pains being experienced at fuel stations once the money hit their accounts.

He foreclosed the resumption of importation by members with any paper promise without the corresponding cash backing.

Olawore had on Tuesday warned that fuel depots would run out of stock in three days.

A former Commander of the Nigerian Navy Ship (NNS) Delta in Warri, Commodore Musa Gemu, has urged the Federal Government to resolve the displacement of some Ugborodo indigenes to enable the $16 billion Delta Gas City Project at Ogidigben to run smoothly.

Gemu spoke yesterday at a farewell parade in his honour.

The former naval officer said his time at the NNS Delta reduced criminal activities in the oil sector.

He said the ground-breaking ceremony of the Delta Gas City Project by President Goodluck Jonathan was a landmark during his tenure at the naval base.

Gemu said he successfully managed situations that could have caused serious crisis by engaging all parties in peaceful discussions, saving several community/company relations.

He said: “Unless the Ugborodo people address the issue of internally displaced persons (IDPs), the realisation of the project is still a long journey the Federal Government must address as quickly as possible, putting in mind the constitution, which surpasses any customs and tradition of any community.

“In dealing with oil companies and host communities, I applied the wisdom of talking on tables to resolve issues rather than holding companies to ransom or using violence to drive home a point. It is on record that because of this approach, no life was lost during my tenure.”

Gemu recalled that in his 14-month stay at the NNS Delta, five ships laden with illegal crude were arrested, 230 boats and over 3,500 illegal refineries destroyed.

Continuing, he said over 34,000 metric tonnes of illegally refined petroleum products were seized and destroyed.

Gemu said: “It is on record that under my watch, NNS Delta arrested and destroyed over 230 wooden boats laden with crude oil.

‘’Similarly, five ships were arrested for crude oil theft and over 3,500 illegal oil refineries destroyed with over 34,000 metric tonnes of crude oil and other petroleum-related products in over 19 camps.”

The Federal Government has demanded the repatriation of the bodies of the four executed Nigerians from the Indonesian government.

The government said it made the request for them to be given decent burial by members of their families.

It expressed regret that the Nigerians along with four others were executed by firing squad on Tuesday for drug-related offences despite pleas for clemency by President Goodluck Jonathan.

The government extended its condolences to the families of the deceased, according to a statement from the Public Communications Division of Ministry of Foreign Affairs in Abuja.

The statement reads: “The Federal Government of Nigeria has received with deep disappointment, news of the execution of four Nigerians, Messrs Martin Anderson, Okwudili Oyatanze, Jaminu Abashin and Sylvester Obiekwe by the government of Indonesia for drug-related offences.

“These executions have taken place despite spirited pleas for clemency made at the highest level by President Goodluck Ebele Jonathan, and more recently, Ambassador Aminu Wali, Minister of Foreign Affairs, on April 21, during the 10th anniversary of the new Asian-African Strategic Partnership Summit, which took place in Jakarta, Indonesia.

“The Federal Government wishes to express its condolences to the families of the deceased.  It has asked the Indonesian government for the repatriation of the remains of the executed persons, so that they can be accorded decent burial in their various communities.

“The Federal Government  seizes this opportunity to once again, warn all Nigerians to desist from drug trafficking and other offences that attract maximum punishment in several countries of the world. The Federal Government will continue to promote the welfare and protect the lives of Nigerians abroad, no matter their circumstances.

“Furthermore, the government is committed to engage the government of Indonesia and other friendly countries regarding the conclusion of Prisoner Transfer Agreements and other bilateral means of safeguarding the interest and welfare of Nigerians.”

THE Federal Government has declared Friday as public holiday to mark the 2015 Workers’ Day.

Making the declaration on behalf of the Federal Government, the Minister of Interior, Comrade Abba Moro, congratulated the citizens for their resilience and commitment in the face of the challenges of daily living.

He enjoined them to sustain the support for President Goodluck Jonathan in his efforts to build a stable, peaceful and economic vibrant nation.

The Minister, according to a statement by the Permanent Secretary, Ministry of Interior, Abubakar Magaji, wished all workers a joyous and peaceful celebration.

The Federal Government yesterday approved the hand over of Nigeria Telecommunications  Limited (NITEL) and its mobile arm, Mtel to NATCOM.

National Council on Privatisation (NCP) Technical Committee Deputy Chairman Haruna Sambo,  who spoke after the NCP meeting chaired by Vice President Namadi Sambo at the Presidential Villa, Abuja, said the consortium had completed the payment of $252.251million being the cost of the firm’s acquisition.

He said: “You recall that at the last NCP meeting, approval was made for the financial bid for NITEL/MTEL by the bidder, NATCOM Consortium at the cost of $ 252.251m. Today, at the council meeting, the council approved the handover to NATCOM Consortium, having paid the cost of acquisition.

“By this approval, the process has come to a closure and the council has mandated the BPE to hand over the two companies to the preferred winner, of course, after all other outstanding issues are taken care of.

“With this, the transaction has come to an end and Council asks the BPE (Bureau of Public Enterprises) to hand over the two companies to the bid winner, NATCOM consortium.”

Permanent Secretary in the Ministry of Power, Godknows Igali, said the government had settled the emoluments of 98 per cent of ex-workers of the Power Holding Company of Nigeria (PHCN).

He said NCP had directed that remaining cases should be referred to the BPE for settlement.

Mines and Steel minister,  Musa Sada, said the council also discussed reforms of the National Parks and the Federal Housing Authority (FHA) with the aim of restructuring the sector and bridging the 17 million housing deficit in the country.

He said: “Another area was that of the Federal Housing Authority. Every body knows that we have about 17 million housing deficit in the sector. For us to be able to build and recover this deficit, we must be ingenious in the way we handle the deficit in the country.

“There is no country that succeed without the involvement of the private sector. So the policies must be right first. The committee presented reports on how to restructure the housing policy to meet the housing needs.”

The divestment of some government interests in businesses to private investors will depend on the profitability of such businesses, Nigerians were told yesterday.

According to the Federal Government its shares in the Transcorp Hilton Hotel Plc and Electricity Distribution and Generation Companies (DISCOs and GENCOs), among others, will depend on the profits made by these companies.

The Director General of the Bureau for Public Enterprises (BPE) Mr. Benjamin Dikki, spoke at the first Annual General Meeting (AGM) of Transcorp Hilton Hotel Plc in Abuja.

Dikki told the shareholders that the decision to divest the government’s holdings in some enterprises was to protect the investment of ordinary shareholders who would buy the shares of such companies.

The Federal Government, Dikki said, would not want to expose potential shareholders and investors to unprofitable enterprises, considering that shareholders invested their hard-earned money.

In the case of the DISCOs and GENCOs, Dikki said they would be taken to the capital market when they show profitability so that shareholders are not exposed to unprofitable ventures that will make them lose their investments.

Shareholders were excited when  Transcorp Hilton Hotel Chairman Olorogun O’tega Emerhor told them that the company would post a dividend of 37 kobo to every 50 kobo shares held by shareholders, amounting to N2.8 billion inspite of difficult operating conditions in 2014.

Emerhor said: “Gross revenue for the company remained largely flat at N14.5 billion (2013: N14.8 billion) on the back of increased security challenges in the Federal Capital Territory and the effects of the Ebola Virus Disease (EVD).”

He added that operating profit also decreased by 24 per cent to N4.4 billion from N5.8 billion due to increased administrative costs-particularly on improving security due to violent attacks in Abuja as well as incremental cost of hosting the World Economic Forum in Africa (WEFA).

Managing Director/Chief Executive Mr. Valentine Ozigbo said because of the Ebola and security challenges, the company “lost about N1.2 billion in revenues due to cancelled bookings and lost patronage, particularly from foreign business travellers segment, due to negative travel warnings from various source markets. With credit to the efforts of the Federal Government, the EVD threat has been contained but the security concern remains”.

Despite the bearish state of the stock market in 2014, Ozigbo said the company was able to raise N4.18 billion representing 52 per cent of the N8 billion offer from its recent Initial Public Offer.

Transcorp Hotel, he said, would also acquire additional funding in the short and medium term to enable it execute its expansion drive.

He said: “We will be implementing a robust funding strategy, which includes the use of debt (bank and bonds), equity (third party participation) and quasi-equity over the next one to three years.”

He said the company would over the next five years engage in a phased approach to developing high-ends hotels in Ikoyi and Ikeja in Lagos, Port Harcourt and Warri, including a convention centre and apartment complex in Abuja.

Ozigbo added that Transcorp Hilton, Abuja would be upgraded this year to completely transform existing facilities and amenities and position it as clear leader in Nigeria’s hospitality industry.

Shareholders hailed the board and management for declaring a dividend of 37 kobo despite the hostile business environment stating that they “are happy for the dividend and even hope for better returns this year”.