The Nation Newspaper

Tag: fuel

  • Fuel subsidy resurfaces

    Fuel subsidy resurfaces

    • Oil minister’s recipe will paralyse and impoverish the Nigerian citizen

    About three months after the contentious issue of fuel subsidy removal made the headlines in the country, the Minister of Petroleum Resources, Diezani Alison-Madueke, rekindled the matter on Tuesday at the ongoing 8th edition of the Oil, Trading and Logistics (African Downstream) Expo in Lagos. According to the minister, who was represented at the occasion by the Deputy Director, Gas, Department of Petroleum Resources, Oliver Okparaojiako, “The truth is that heavy subsidy is unsustainable expenditure even in the long term. It generally promotes energy inefficiency and imprudent consumption … To provide a competitive market environment and sustain supply, the downstream should be fully deregulated”.

    The last time there was a sustained focus on the matter was around July when the Federation Accounts Allocation Committee insisted that retention of fuel subsidy was a fraud against the country. We understand where the Forum of Commissioners for Finance of the 36 states of the Federation who form the bulk of the committee members was coming from: their share of the revenue from the centre government was dwindling. They wanted the shortfall augmented but could not care from where.

    As usual, fuel subsidy came handy, notwithstanding the opposition of the generality of Nigerians to its removal. Indeed, the impression was given then that the country would have collapsed by now if the subsidy had not been removed. Here the country is, still standing, in spite of the hiccups which were not as pronounced then as they are now in the international oil market.

    Fuel subsidy is a product of the importation of petrol and kerosene because our four refineries cannot refine enough for local consumption.  Most of them are presently down; even in the best of times, they have never produced optimally in the past decades, despite the regular Turn-Around Maintenance that we spend billions to do on them.

    The scary news this time from the minister is that there does not seem to be any hope in sight in the near future for the country and other oil-producing African countries, to stop fuel importation. “Notwithstanding the possibility of building new refineries in Africa, including new projects in Angola (Sonaref Refinery); Uganda (Uganda Oil Refinery); Mozambique (Nacala Refinery); and Nigeria, among others, Africa will remain a net importer of petroleum products for at least 20 years to come”, she said.

    The reason? There hasn’t been enough planning for production to catch up with the continent’s bourgeoning population. “ …There are only 24 fuels refineries within the region, with a total refining capacity of 1.6 million barrels for a population that is close to a billion. Population growth means more energy consumption”, Mrs Alison-Madueke said.

    Clearly at a glance therefore, it is obvious that the oil industry has been bogged down by incompetence, lack of foresight and, above all, corruption. These and other factors are responsible for the crippled state of our refineries in Nigeria. Regrettably, rather than address them, the government prefers the easy way out, which is importation, and sees nothing shameful about a major oil producing nation importing fuel.

    But we wonder how Mrs Alison-Madueke arrived at the position that we have to wait for about two more decades to have enough refineries to take care of our local fuel consumption. Where are the Greenfield refineries promised by the government in the wake of the 2012 fuel subsidy riots?  What about the other promises made by the government to douse the nationwide fury then?  Why is the government still keeping the refineries if it cannot make them work optimally?

    We restate, even if for the umpteenth time, that we are not opposed to deregulation of the downstream sector; what we are opposed to is deregulation based on the template of importation. Any deregulation regime must be productive and yield returns, rather than the paralysis of external dependency. If fuel subsidy is unsustainable as the minister claimed, then, perpetual importation of fuel by Nigeria is as undesirable as it is unpardonable.

  • Global demand growth for fuel weakens, says IEA

    Global demand growth for fuel weakens, says IEA

    GLobal demand growth for fuel has weakened, the International Energy Agency (IEA) has  said.

    The agency warned that the rise in Middle East refining capacity would create huge glut of automotive gas oil or diesel.

    According to the global energy watch dog’s monthly report, IEA forecast that the Middle East’s net oil product exports will reach nearly one million barrels per day (bpd) next year from an average of less than 400,000 bpd last year.

    Newly built mega refineries are coming into production just as demand growth for their core product – diesel – is beginning to fade, which could leave them searching for outlets, the IEA said.

    “The configuration of the plants, designed to maximise diesel production, seems somewhat at odds with market trends that in recent months have shown stronger demand growth for gasoline and jet fuel than for middle distillates,” the agency said in its Oil Market Report.

    The IEA expects ultra low-sulphur diesel and jet fuel production from two newly built Saudi refineries and one in the UAE alone to reach 800,000 bpd, against regional distillate demand growth of less than 100,000 bpd per year in 2014 and 2015.

    “The current economic and oil demand picture is quite different from what was envisaged at the time when they got underway in the mid-2000s,” the report said.

    “Since the financial crisis of 2008 and 2009, the economic slowdown has had a more marked impact on distillate demand than on that for other products, such as gasoline.”

    The 400,000 bpd Jubail  refinery, a  joint venture between Saudi Aramco and France’s Total, reached full production in August and the 400,000 bpd Yanbu refinery, run with China’s Sinopec, is set to start in early 2015. The 420,000 bpd Ruwais refinery in the UAE is targeting an end-of-year startnup.

    But sputtering growth in key growing markets, such as India, Brazil and other Latin American countries, is limiting outlets for diesel, while subsidy cuts in those countries also threatens consumption.

    After India phased in gradual subsidy cuts, demand reversed annual growth that had characterized its distillates markets from the 1970s, and demand shrank from June last year until April this year.

    Even Europe, which is net short of ultra low-sulphur diesel now, and set to become more reliant on imports as regional refineries shut down and cut production, is not the boom market that the refineries hoped for when they were commissioned.

  • Security operatives recover over five trucks of vandalised fuel in Lagos

    Security operatives recover over five trucks of vandalised fuel in Lagos

    •Arrests 50

    No fewer than five trucks loaded with petroleum products were recovered at vandals hideout in Majidun, Ikorodu an outskirts of the city at the weekend.

    The stolen petroleum products were recovered in a joint operation which comprised operatives of Nigerian Army, naval officials and Nigeria Security Service and Civil Defence Corps.

    It was gathered that the operatives also arrested 50 of the suspected vandals, arrested 100 canoes and 3,000 jerricans filled with fuel at their hideout.

    Sources said fear gripped residents when the armed security officials stormed the creeks around the community, impounding several ferries loaded with petroleum products.

    Most youths in the area fled the community in fear of being mistakenly arrested as vandals.

    The operation, which was still on as of 1pm yesterday, was said to have started at about 2am in the morning.

    A helicopter painted in the uniform usually worn by naval officers was sighted hovering around the area.

    The helicopter had travelled the waters in the area on Thursday to monitor the activities of the vandals.

    The operation also caused gridlock from Agric to Majidun as the gun-wielding men ransacked motorists.

    They also accosted some commercial operators and passersby were also to the creeks to evacuate the fuel.

    At the creeks, armed men were seen directing civilians to offload the fuel from ferries into the trucks.

    A bus conductor who shuttles between Ketu and Ikorodu, condemned the forcing of civilians to evacuate the fuel, adding that he was exhausted by the task.

    He said, “We were coming from Ikorodu Garage when they stopped our bus. I was forced to carry several jerricans of fuel; 50 litres for that matter. It is very annoying. You can see how they are leading innocent passersby to watersides to offload fuel.”

    A resident, Kabiru Kola, said the activity of the security agents had created panic in the residents, adding that some of them had fled the community.

    “We have been holding our breath since 2am when the operation started. Most people, especially boys have left the community for the fear of being taken as suspects. The perpetrators have run away while some of them have been arrested. Two days ago, I noticed that a helicopter hovered around here for five hours. Since then, I have been heralding something like this,” he said.

    The spokesperson of Lagos State Command of NSCDC, Mr. Mefor Chibuzor, confirmed the operation.

    He said the corps was alerted to it on Sunday morning.

    Chibuzor added that the security agencies would continue oppressing vandals until they desist from tampering with the pipes.

    “A joint operation involving our men, naval and army officials are ongoing now around Agric and Majidun in the Ikorodu area. Some vandals have been arrested while thousands of kegs loaded with petroleum products were recovered from the scene of crime. The creeks were busted following an intelligence report. We will continue to run after the vandals until they stop destroying the government property across the waters,” he said.

  • Photos: Fuel scarcity in Abuja

    Photos: Fuel scarcity in Abuja

  • Tanker drivers threaten to shut fuel supplies

    Tanker drivers threaten to shut fuel supplies

    The Petroleum Tanker Drivers (PTD) branch of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has warned of an impending strike action in  Southsouth and Southeast parts of the country following the government’s failure to heed its call for urgent repairs of the Port Harcourt-Eleme junction , Okigwe-Umuahia and Jebba-Oloru-Ilorin roads in Rivers, Abia and Kwara states, respectively.

    They gave the warning in a statement signed by its National Chairman, Comrade Salimon Oladiti, after a meeting with executive members of the union in Abuja.

    Comrade Oladiti said the union executive has resolved to take action by ensuring that lifting or distribution of petroluem products in these axes are discontinued in the next two weeks if nothing is done to repair the roads and save its members from the continued carnage on such roads daily.

    The union said the roads had claimed the lives of some of its members and portend great danger to more members’ lives and properties. The deplorable state of the Port Harcourt- Eleme junction road with a distance of about 10 kilometers, he said, takes seven to eight hours of manoeuvring by trucks, many of which break down in the process, upturning contents, killing members and endangering the lives of several others using the road.

  • Why fuel scarcity will linger, by PENGASSAN

    Why fuel scarcity will linger, by PENGASSAN

    The proposal by the federal government for total withdrawal of subsidy will not address fuel scarcity, former zonal chairman of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Mohammed Sa’idu, has warned.

    Sa’idu said that the construction of new refineries and increase in local production of refined products will stop the long queues in filling stations.

    He spoke at the 4th triennial zonal conference of Kaduna zone of the association in Minna.

    He said: “Fuel scarcity will continue to linger in the country even if government decides to make a total withdrawal of fuel subsidy due to wide gap between local production and our daily consumption.”

    The union leader argued that the optimal production capacity of the nation’s refineries is 17 million litres per day while the country’s daily local consumption requirement is in the region of 40 million litres.

     

     

    According to him: “Even if government is ready to put the existing refineries to produce at optimal level, the country will still have to grapple with the importation of over 20 million litres of fuel to augment the daily total requirement for the country.”

    He said that establishment of more refineries remains the only solution to fuel scarcity in the country and called on government to provide enabling environment for private sector to be involved in the process.

    “Any step taken by government outside establishment of more refineries in the country would always serve as temporary measure,” Sa”idu maintained.

     

  • The pain of no fuel

    The pain of no fuel

    It started like a joke. When fuel scarcity resurfaced in the FCT, it was first noticed in some parts of the city but in no time, it spread everywhere, leaving residents with long faces.

    Within a day or two many filling stations resorted to selling in trickles, while major distributors restricted their business to night hours when they are sure to make more money from black market vendors.

    First, everyone was confused as to the appropriate time to get the commodity at any filling station.

    Black marketers took over Abuja with containers, which according to findings, majorly contain diluted PMS.

    The situation was worse in the rural areas where filling stations are located.

    In Kuje, when Abuja Review visited, the situation was tense. Out of five filling stations located in the area, only the Nigeria National Petroleum Corporation (NNPC) sold, with long queues.

    Findings also revealed that most filling stations especially in Kuje are not checked by the regulatory authority.

    Motorists on the fuel queue had a raw deal because sometimes, after the attendants had sold to a few people, the station would announce that they had run out of fuel.

    Many motorists without fuel in their car had to leave their vehicles at the station waiting and hoping to buy the next day.

    Residents called on the Federal Government to tackle the scarcity which has caused serious hardship to all.

    Some of them, who were lamenting outside Oando filling station where operators of the station refused to sell to motorists, explained that most petrol stations have refused to sell fuel to motorists because of the fear of prolonged fuel scarcity.

    Mr. John Ona, one of the residents who spoke with Abuja Review, said he has been looking for fuel for the past two days without any headway, adding that any fuel station he visited from Kuje to town, the operators refused to sell fuel.

    His words: “The truth is that nobody knows what is causing this scarcity in Abuja; almost all the filling stations have stopped selling fuel, without any genuine reason. If you ask the operators, they will tell you that they do not have fuel and even when you see filling station selling fuel, you will queue for hours before you buy the product.

    “The situation is getting out of hands; people are suffering in the FCT because of some greedy petrol operators who are hoarding the fuel for no reason. The federal government should do something about it, because, it is spoiling the good report of ‘no fuel scarcity’ during this administration.”

    Another resident, Mrs. Agnes Shekwo, said that the scarcity is seriously affecting the lives of the people, because, apart from using the product for vehicles, it is not available for residents to use to power the generator for businesses when there is power failure.

    “We need fuel to power our generators for us to effectively do our businesses. But since the scarcity of petroleum product, I have not been able to get fuel to put on my generator, and we hardly have electricity light in my area.

    “Last week, all the meat I kept in my freezer to prepare food in my restaurant got spoilt, because of power outage and no fuel to use in my generator. The federal government should call whoever is involved in the fuel scarcity to order. Because, the whole thing is getting out of hands,” she appealed.

    Abba Attahiru said: “We do not know what is causing the fuel scarcity but we just woke up one morning and started experiencing it. Nobody is giving us a true story of what is behind the scarcity. All the same as Nigerians we have been trying to cope. Suffering and smiling as usual. For me I think it is connected to the political problems we are having in the country because with the trend of things that is happening now, insecurity, suspension of CBN governor, among other and you know a lot of bodies have been showing their grievances. I think we have putting our efforts into making Nigeria a better place as in we the populace. Government should look at the suffering of the masses. Because we made them to be where they are today, they should try to resolve the crisis of fuel scarcity.”

    Mr. Patrick Odeh also lamented saying: “We were thinking that this type of thing will not surface again in Nigeria having experience free flow of fuel for the past two years. We just believe that it is artificial and then it will be dealt with appropriately. Government should do the needful. We have no reason suffering fuel scarcity in this country with all the refineries that are in place. I leave in Kuje.”

    Authorities of the filling stations visited refused to speak with Abuja Review on the matter.

    At the black market as at the time of filing this report, 10 liters was sold for N2,000 while two liters was sold for N400.

    Most people buy it due to the fact that they must go to work to look for their daily bread.

    Mrs. Lamid Adeniyi said: “We do not know where we are going in this Nigeria. Our leaders should help us, we are really suffering. Everything is politics.”

    A petroleum marketer who pleaded anonymity told Abuja Review what could be responsible for the scarcity.

    The source who owns a filling station in Port Harcourt said: “The issue of the scarcity is artificial because refineries are work. There are repairs going on. It is not peculiar to the north. Everywhere has it own problem because of short supply. There will not be increase in pump price of petroleum product. You can see that people are now making sharp business and the marketers are now using the opportunity to make statements that there may be increase in pump price. And when you hear that, you will want to stock the product to last you for some time.”

  • Fuel subsidy disaster: Octogenarian victims cry for compensation after two years

    Fuel subsidy disaster: Octogenarian victims cry for compensation after two years

    As lofty as the strong will by Nigerians to fight against the removal of fuel subsidy by President Goodluck Jonathan in January 2012, those who lost their loved ones and properties to the protest that rocked several parts of the country still rue the day the President made the ill-thought announcement.

    A one-storey building on 75, Owu/NTA junction, Totoro-Abeokuta, the Ogun State capital jointly owned by Pa Lasisi Ademuyiwa and Pa Salisu Ademuyiwa, both octogenarian was razed due to a fire outbreak caused by the tear gas shot by the police to disperse the protesters.

    The octogenarian problem began with the expansion projects embarked upon by the state government that claimed part of the building before the subsidy crisis.

    During the protest, the police teargas went on top of the roof, leaving the building in flames.

    Two years after, the Ademuyiwas are crying out over the non-payment of any compensation to the family.

    The victims accused the Ogun State Police Command and the state government of neglect, noting that two years after their family house was burnt, they are yet to receive any form of compensation from government. They appealed to Governor Ibikunle Amosun to look into their case.

    According to Pa Salisu Ademuyiwa, they lost all their personal effects to the inferno and since then they have been finding it difficult to make ends meet. He said all the victims including his elder brother, his wife, grandchildren and others have been squatting in rented houses since the incident.

    “It hurts us that some people who suffered just like us are getting compensation yet our case has never been addressed,” he said.

    According to him, one of the tear-gas canisters fired by the police strayed into the upper sitting room of the building via the window and caused the fire that gutted the entire property.

    “We are still keeping the police tear-gas canister till today; it was God that saved one of my brother’s life as he was deep in sleep in his bedroom when the fire started,” he said.

    Pa Ademuyiwa said after the fire outbreak, they filled for compensation and they are still waiting for government response, expressing surprise that two years after nothing has been heard in that regard.

    “Few months ago, after so much stress and pestering, the state emergency management agency was reported to have given out some planks and roofing sheets; what do they want us to do with roofing sheets on a burnt building,” he queried

    His sentiments were echoed by his elder brother’s wife, Mrs Ademuyiwa.

    Recalling the incident, Mrs Ademuyiwa said: “I was busy washing my clothes in front of the house while my husband was taking his siesta in one of the rooms. We could not go out because of the nationwide strike/protest called by the Nigeria Labour Congress, the Trade Union Congress, and civil society groups. Before we knew what was going on, we saw that our building has been engulfed by fire. The fire emanated from the tear gas canister fired by members of the Nigeria Police Force to disperse the protesting crowd. No member of the family could take any material out of the building throughout the period the fire lasted”

    One of the neighbours who witnessed the incident, Mrs. Mary Owolabi testified that the Police tear-gas entered the upper sitting room of the building and ignited a fire which spread like a whirlwind for the number of hours it lasted

     

  • Worst fuel oil loss since 2011 seen easing on import cut: Energy

    Refining losses from producing fuel oil in Asia are poised to narrow as imports from western countries and Iran decline while global economic growth boosts demand for transportation fuels.

    Cargoes of the ship and power-station fuel cost an average $10.20 a barrel below Dubai crude this month, the largest monthly discount since April 2011, according to data compiled by Bloomberg. That gap, known as the crack spread, will narrow to minus $8 a barrel in the first quarter of 2014, according to the median estimate in a survey of five analysts and traders.

    A recovery in fuel oil, which refiners typically produce at a loss after making gasoline and diesel, will help boost margins at companies including South Korea’s S-Oil Corp. and Royal Dutch Shell Plc. Iran, once the second-biggest supplier to China, has cut exports by 67 percent compared with earlier this year. At the same time, global demand for shipping fuel is forecast to rebound amid economic growth from the U.S. to China.

    “We will see more recovery in 2014,” said Ehsan Ul-Haq, a senior market consultant at KBC Energy in Walton-on-Thames, England, who forecasts a crack of minus $7.50 in the first quarter. “Demand will recover if the Chinese and western economy recovers. Iran is going to use fuel oil domestically because they always have a gas shortage in winter.”

    Front-month high-sulfur fuel oil swaps were at $622.78 a metric ton as of 11:08 a.m. London time, up 0.3 percent this year. Dubai crude, the benchmark grade for Asia, was at $108.46 a barrel today, gaining 2 percent over the same period.

    Estimates for the first quarter crack ranged from minus $7.50 to $8.83 a barrel in the Bloomberg News survey that was conducted through Dec. 17. It averaged $9.74 this quarter.

    www.bloomberg.com

  • APC to split NNPC, end importation of fuel

    APC to split NNPC, end importation of fuel

    •Foreign missions scramble for APC manifesto

    • Opts for free market economy

    The All Progressives Congress (APC) plans to untangle the Nigerian National Petroleum Corporation (NNPC) if elected into power in 2015.

    It also intends to pursue a free market economy policy and devote 10 per cent of the nation’s annual budget to Education.

    Foreign missions, especially those with stake in the oil industry, agriculture, the defence industry and with huge reputation in the promotion of democracy and human rights, are already scrambling for the manifesto of the party.

    The party’s plans are contained in the manifesto which was made available to party leaders and elders on Wednesday.

    APC pledged to ensure the emergence of modern modular refineries products and reduce importation of petroleum products.

    The manifesto says: “APC will make the industry and Nigeria one of the world’s cutting edge degree for clean oil and gas technologies, scientific, mega structure installation drilling, progressing production engineers supported with best services and research facilities.

    “Fully develop the sector’s capacity to absorb more of the nation’s new graduates in the labour market. Make the sector produce more home-grown world class engineers and scientists.

    “Modernise the NNPC and make it the national energy champion. Consider breaking it up into more efficient, commercially driven unit and strip it of its regulatory powers and enable it tap into international capital market.”

    APC also said it would promote economic policy of free market.

    The manifesto adds: “Under current circumstances, economic illusions have literally destroyed all growth in the real sector by their failure or refusal to acknowledge that the country will inevitably collapse under the current bank rate regime.

    “The APC, while supporting private enterprises and free market economy, will take every step to eradicate predatory capitalism.”

    As at press time foreign missions had been scrambling for APC manifesto.

    A source, who spoke in confidence, said: “All these missions have been requesting for the manifesto of APC based on the demand of their home countries.

    “I think they are interested in whether APC would come up with new policies which are better than that of the ruling party. We have given copies to the embassies who have requested. But we know we are providing alternatives in 2015.”