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  • Senate committee demands audited accounts of NNPC, others

    Senate committee demands audited accounts of NNPC, others

    The Senate Committee on Gas Resources Wednesday asked the Nigerian National Petroleum Corporation, (NNPC) and its subsidiaries to submit all their detailed audited accounts in the past three years.

    The committee also blamed Federal Government agencies for the worsening gas flaring in the country.

    The committee noted that inability of relevant enforce payment of stipulated penalties on erring International Oil Companies, OICs, was mainly responsible for increased gas flaring.

    Apart from the NNPC, others mandated to submit their audited accounts are the Nigerian Petroleum Development Company, NPDC, Nigerian Petroleum Investment and Management Service, NAPIMS, Nigeria Liquefied Natural Gas, NLNG.

    Chairman of the committee, Senator Albert Akpan, gave the directive during the committee’s engagement with the agencies in Abuja.

    Akpan said the directive was in line with the mandate of the committee in its ongoing investigation into the activities of the agencies.

    He said that details of the accounts must be submitted as soon as possible to enable his committee meet its deadline given by the Senate.

    The audited account, he said, would afford the committee the opportunity to know the joint venture funding and cost determination of the oil companies and government agencies.

    He said, “From the audited account, we will know also who approves projects and how are the projects monitored and the mechanism for cost recovery and monitoring of the projects.”

    Akpan also asked the agencies to present the data of the quality of gas flared by the oil companies in the past two years.

    He said, “Give us the submission of the gas that you have flared and each of your operators involved. The quality of gas flared, the operators, the terminal and the related penalties paid.”

    The panel chairman frowned at the 2016 budget of the Department of Petroleum Resources, saying that N3 billion only earmarked by the agency on penalties for gas flaring, was grossly inadequate.

    Group General Manager, NAPIMS /NNPC, Dafe Sajebor and the Managing Director of National Petroleum Development Corporation, Sadler Mai-Bornu, assured that the organizations were working assiduously to end gas flaring in the country between 2018 and 2020.

    “The percentage of gas flared in the country is of average, seven percent and we are still working on a number of projects to flare out; we are targeting 2018 for us to have a total flare out.

    “Those evolutions have  been translated and proposed for better fiscal regime in the Petroleum Industry Bill, PIB, and that is why we are praying and hoping that the PIB should be passed so that Nigerians can derive better benefits from the oil and gas investment, ” the NAPIMS boss said.

     

  • IPMAN against unfair product sharing formula

    IPMAN against unfair product sharing formula

    The Independent Petroleum Markets Association (IPMAN) has threatened to stop operation if   the Nigeria National Petroleum Corporation (NNPC) refused to regularise the perceived imbalances in the sharing and distribution formula of petroleum to marketers.

    These were part of the resolutions reached at the end of  an IPMAN stakeholders meeting yesterday in port Harcourt, the Rivers State capital.

    Addressing reporters  after the meeting, the Chairman, IPMAN Council of Elders, Dr Emmanuel Ihedigbo, decried that  IPMAN, which has about 85  per cent outlets, to service was been slighted in the allocation formula.

    He demanded that IPMAN should be given 60 per cent to meet up its service demands.

    Ihedigbo faulted the arrangement where petroleum products were allocated to private depots and sold to major marketed and mega stations.

    He urged the NNPC to designate, four tank farms in port Harcourt, one tank farm in  warri, two tank farms in Calabar and five in Lagos.

  • NNPC moves to build mega stations in senatorial districts

    NNPC moves to build mega stations in senatorial districts

    •Gets   Kaduna, Jigawa, Kano governors support

    Nigeria National Petroleum Corporation (NNPC) is seeking to expand by building a mega station in every senatorial district in the country.

    The move, designed to ensure efficient distribution and countrywide penetration of petroleum products, has commenced with nationwide consultation with stakeholders.

    NNPC’s Group General Manager, Group Public Affairs Division Mr. Ohi Alegbe made this known in a statement yesterday.

    He said the consultation began during the week with a visit to Kaduna State Governor Mallam Nasir El-Rufai to solicit support of the government to provide lands for new NNPC petrol stations.

    The delegation was led by  Group Executive Director, Commercial and Investment, Dr. Babatunde Victor Adeniran.

    “Our mission is to build three mega stations, one each in the three senatorial districts. We need about 5,000 square metres for each of the station. Each station will have six pumps, including one for Liquefied Petroleum Gas – cooking gas,” Adeniran said.

    El-Rufai expressed gratitude to the NNPC management for deciding to launch the outlets expansion programme in Kaduna Sate, adding: “Any time NNPC comes visiting, it comes with good news”.

    The governor added: “I want to assure you that we will  support you. The state director of Lands will take the NNPC project team round the state to look at sites. I don’t know how many you are building, we can give you as many as 10 sites if you want.”

    Speaking  during the consultative visit to Kano State, Governor Abdullahi Umar Ganduje described NNPC as an indispensable business ally for socio-economic growth.

    Jigawa State Governor Alhaji Badaru Abubakar pledged support for the NNPC retail outlet expansion project.

    Abubakar, who spoke when he received the NNPC delegation, said he had directed the Ministry of Lands to provide sites that meet the stipulated requirements for NNPC to choose from.

    Dr. Adeniran expressed gratitude to the governors for their support for the aspirations and success of the corporation.

  • NNPC holds first IPO by 2018

    NNPC holds first IPO by 2018

    Nigeria plans to make its first initial public offering of assets owned by its national oil company in 2018, Petroleum Resources Minister of State, Emmanuel Kachikwu said.

    “It’s inevitable,” Kachikwu, who also heads the Nigerian National Petroleum Corporation, said on Tuesday in an interview in Abu Dhabi. “Part of the cleaning up process that we’re doing is to prepare for that.”

    Nigeria plans to sell shares in its refining and distribution business and “select” exploration and production assets to the public, he said.

    The NNPC manages Nigeria’s stakes in joint ventures with international oil companies that pump the country’s crude. It also operates refineries and a distribution network of depots and pipelines across the country of about 180 million people.

    With reorganisation, the NNPC is expected to evolve into four efficient business units from more than a dozen that are mostly making losses, and return to profitability, according to Kachikwu.

    A long-delayed bill to reform Nigeria’s oil and gas industry will probably be passed “quickly” by lawmakers after it was split to separate a “very contentious” fiscal aspect from non-fiscal parts, he said.

  • NNPC to establish more mega stations, says Kachikwu

    NNPC to establish more mega stations, says Kachikwu

    Minister of State for Petroleum Resources Dr. Emmanuel Ibe Kachikwu yesterday said  the Federal Government was working out modalities for the  Nigeria National Petroleum Corporation (NNPC) to establish more mega petrol stations.

    He spoke at a news conference in Abuja.

    Asked to confirm whether the corporation was planning to build 800 mega petrol stations, the minister who did not give the exact figure of stations, said: “Definitely,  there are many fillings stations we were trying to develop working with the governors in terms of land, local government areas. The idea is to be able to expand our wings in crisis period. Some of that is going to come with Joint Ventures with some filling stations, which are willing to do JVs with us and so the 800 are not going to be built anew.”

    He warned petrol marketers selling petrol above the official pump prices to revert to the Petroleum Product Pricing Regulatory Agency (PPPRA) prices.

    The minister cautioned marketers, who were manipulating pump prices, saying: “I have asked DPR to oil  up their enforcement machine because they are not doing it as much as I want it to happen.  And we are going to have security agencies if any filling station is found to be selling products above the pump price. We are going to seal those stations. We are going to sell the products for free. We will seal the stations and we are not going to reopen them until three months.”

    Kachikwu, who is also the group managing director of the NNPC, admitted that the Federal Government had been lacking in the implementation of official petrol prices compliance in the hinterland, vowing that government would intensify the compulsory compliance with pump prices in rural areas.

    He said government needed to do more since consumers in the rural areas, who are relatively poor are mostly affected by high pump price.

    The minister said:  “I agree that we have not done enough in terms of hinterland protection. And I believe we need to do more because the frequency of these practices are more in the hinterland. And unfortunately those are the ones who even lack the resources  to pay that kind of prices so we need to do more work.

    According to him, following the engagement of private security firms, the NNPC recovered pipelines that were abandoned for many years.

    “We are working to see how we can bring up pipelines back into the system between now and before early February,” he said.

    The minister assigned the Managing Director, Product Pipeline Marketing Company, Mrs. Esther Nnamdi-Ogbue to look into how kerosene was allocated to ensure that it is available, especially in NNPC filling stations .

    Commenting on the capacity of the Department of Petroleum Resources (DPR), the Director, Mordecai Ladan, said there were over 30,000 filling stations and DPR had about 300 workers to monitor them.

    “But all the same, we are going electronic in the  monitoring of supply and distribution. Emphasis is on electronic tracking for supply to the stations. From today, DPR workers will get cracking and ensure the N86.50 in the independent and major stations are enforced.”

    He said DPR would also monitor and enforce inspection on NNPC stations still shortchanging customers.

     

     

  • Why we gave NNPC 78% allocation, by PPPRA

    Why we gave NNPC 78% allocation, by PPPRA

    Petroleum Products Pricing Regulatory Agency (PPPRA) Executive Secretary Farouk Ahmed has defended his  agency’s 78 per cent import allocation of 3.1 million metric tonnes of Premium Motor Spirit (PMS) to the Nigeria National Petroleum Corporation (NNPC).

    A statement by the agency’s chief in Abuja yesterday noted that the decision was influenced by the inability of some oil marketers to meet their quota due to difficulty to access foreign exchange.

    He said: “We gave 78 per cent of the import allocation to NNPC because we are sure it can source foreign exchange through crude oil sales to finance its importation. If we go back to recent historic trends, especially in the last six months, you will discover that most marketers had difficulty in raising Letters of Credit due to lack of forex.”

    Dismissing insinuation that the import allocation was skewed to ease out private sector marketers from the business and to engender NNPC monopoly, Ahmed explained that even the foreign exchange requirement for the 22 per cent import allocation to other oil marketers was being covered by the NNPC and the Central Bank to ensure they perform.

    “The idea is to give support to the marketers to enable optimum service delivery, while ensuring stability in the system,” he said.

    On the reported disparity in pump price of fuel across the country, the PPPRA executive secretary said with the massive importation and distribution of petrol by the NNPC, price disparity will soon disappear as supply is intensified to every nook and cranny of the country.

    “This problem is being tackled in two ways. Firstly, with the support of the minister of state for Petroleum Resources, PPPRA and DPR are working to ensure compliance. Secondly, once product is abundantly available, it becomes a straight issue of supply and demand and competition for market share. And that is the idea,” he said.

    Noting that the worst days were over for fuel supply and distribution challenge, the PPPRA boss assured that the days ahead would witness improved sanity in the product distribution.

  • Local petrol refining hits 6.76m litres

    Local petrol refining hits 6.76m litres

    • Buhari okays inter-ministerial panel to fast-track NNPC reforms

    The Nigerian National Petroleum Corporation (NNPC) yesterday said the nation’s three refineries in Kaduna, Port Harcourt and Warri have attained a combined daily production of over 6.76 million litres of petrol per day.

    Its Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe in a statement, said domestic petrol refining is projected to increase to over 10 million litres per day by the end of this month.

    According to the statement, while Port Harcourt Refinery which was re-streamed a week earlier is producing some 4.09 million litres, the Kaduna Refinery is contributing 1.29 million litres and Warri which was re-streamed on Sunday is posting 1.38 million litres.

    NNPC confirmed that the petrol volumes from the refineries which are currently operating at an appreciable percentage of their nameplate capacities will help stabilise fuel supply and distribution situation in the country.

    President Muhammadu Buhari yesterday said an inter-ministerial committee will be established to speed up the re-organisation and reformation of the Nigerian National Petroleum Corporation (NNPC).

    Speaking at the Presidential Villa, Abuja, during a meeting with the Chief Executive Officer, International Finance Corporation (IFC), Jin-Yong Cai,  he said the reformation  of the NNPC had become inevitable in view of  the massive corruption and abuse of its present structure.

    A statement endorsed by Buhari’s Special Adviser on Media and Publicity, Femi Adesina, also stressed the need for the country to maximise revenue from every source as a further imperative for reforming the NNPC.

    He said the president was doing everything possible to boost national revenue so that the government can effectively implement its programme of change and significantly improve the living conditions of Nigerians.

    Mr. Jin-Yong Cai, who is also the Vice President of the IFC, told President Buhari that with proper reform and re-organisation, NNPC could become Africa’s largest company.

    “You have brought monumental changes since you got to power. You have brought in strong leadership and Nigeria has the opportunity under you to become highly reputable.

    “In NNPC, you can create an entity that is dominant in Africa, and this is the right time to do it, with the momentum you have created,” he was quoted to have said in the statement.

  • Petrol new pump price: DPR begins enforcement in Plateau

    Petrol new pump price: DPR begins enforcement in Plateau

    The Department of Petroleum Resources (DPR) has begun to visit filling stations in Plateau to ensure that major and independent marketers comply with the new pump price of N86.50 per litre as directed by the Federal Government.

    The News Agency of Nigeria (NAN) reports in Pankshin that officials of the department are currently visiting the central and southern zones of the state to ensure total compliance.

    The department’s team Leader and Human Resources Assistant, Mr Habib Yahaya, told NAN in Pankshin on Saturday that it was useful for both major and independent marketers to comply with the new pump price.

    “All NNPC Mega Stations are expected to sell the fuel at a pump price of N86.00 per litre while major and independent marketers are suppose to sell at N86.50 per litre.

    “Anything above these two official pump prices would attract serious sanctions from our department, ’’ he said.

    Yahaya expressed concern about the attitude of some of the independent and major marketers who he accused of avoiding them.

    “When they heard we are coming they quickly closed down and run away from the filling station so that we could not check the volume of what they had in stock,’’ he observed.

    Yahaya called on the public to alert DPR of any erring filling station that would not sell at the official pump price of N86.50.

    “This because we are aware that most of the operators of these filling stations revert to old prices of their choices whenever we are out of their domain, ’’ he said.

    The DPR official warned that any filling station caught flaunting the directive of the government would face the wrath of the department.

    He pledged that the DPR would do all it could to ensure that motorists and commuters were not subjected to hardships.

  • NNPC ‘paid N933.1b, $607.8 in 11 months’

    NNPC ‘paid N933.1b, $607.8 in 11 months’

    The Nigerian National Petroleum Corporation (NNPC paid  N933.1bn for domestic crude oil and gas and other receipts  to the Federation Account from January to November 2015.

    According to the November financial report posted on its website yesterday, it paid $607.8m  to the Federation Accounts and Allocation Committee (FAAC)  in the period under review.

    The corporation, however, recorded a N14.3bn loss in November 2015.

    On naira payments to the government, it said: “The sum of N933.1bn for domestic crude oil and gas and other receipts have been paid to the Federation Account from January to November 2015.”

    The report stated that the country’s refineries operated at zero capacity utilisation in November.

    The refineries include Warri Refining and Petrochemical Company, Port Harcourt Refining Company and Kaduna Refining and Petrochemical Company.

    NNPC  said: “The group operating revenue after subsidy for the months of October and November 2015 were N173.56bn and N155.10bn. This represents 56.72 per cent and 50.68 per cent of monthly budget. Similarly, operating expenditure for the same periods were N185.78bn and N169.39bn, which also represents 69.55 per cent and 63.42 per cent of budget for the months.

    “Operating deficits of N12.22bn and N14.29bn for October and November 2015 was attained as against monthly budgeted surplus of N38.91bn. (The) 59.63 per cent of YTD (year-to-date) NNPC deficit of N255.278bn is mainly accounted for by claimable pipeline repairs/management cost of N95.37bn and crude and product losses of N56.68bn due to vandalised pipelines.”

    The NNPC said total export proceeds of $402.55m was recorded in November with proceeds from crude oil export sales amounting to $296.99m or 73.78 per cent of the dollar payment compared with 72.97 per cent contribution in previous month of October, 2015.

    Gas export sales and Nigeria Liquified and Natural Gas feedstock amounted to $105.53m, which was 26.22 per cent contribution as against 18.97 per cent contribution in October.

    According to NNPC, “the remaining $0.03m was attributable to other dollar denominated receipts by the corporation and a total of $607.8m has been paid so far to FAAC in the year 2015 from sales of export oil and gas”.

  • Petrol to sell for N86 from Jan 1

    Petrol to sell for N86 from Jan 1

    MotoristS yesterday got a New Year present. Petrol is to sell for N86 per litre at Nigeria National Petroleum Corporation (NNPC) outlets.

    Others will sell at N86.50k as against the present N87 per litre.

    The Petroleum Products Pricing Regulatory Agency (PPPRA) said the prices would run from January 1 till March 31, under a revised pricing template.

    PPPRA Executive Secretary  Farouk Ahmed broke the news to reporters in Abuja.

    Within the new pricing template, the government approved two pump prices-one for NNPC retail outlets  and the other for retail outlets operated by private business concerns.

    Both open market prices indicate a N1 and 50k drop from the official pump price of N87 per litre, which will become obsolete on December 31 – tomorrow.

    Farouk said the announcement followed the approval of the Minister of Petroleum Resources, Dr. Ibe Kachikwu, for the implementation of the revised template.

    The PPPRA has approved importation of three million metric tonnes of petrol in the first quarter of the year. The NNPC was granted 78 per cent of the total allocated volume for the period. The balance of 22 per cent will be supplied by other oil marketing companies.

    According to Farouk, a couple of elements that were affected by the price review include traders’ margin, which was revised downwards from N1.47 per litre to zero; lightering expenses (N4.07/litre to N2.00/litre) charges by the Nigerian Port Authority (NPA), (N0.77/litre to N0.36/litre); jetty throughput charges, (N0.80/litre to N0.40/litre); storage charge (N3.00/litre to N1.50/litre); bridging fund (N5.85/litre to N4.00/litre) and ex-depot price (N77.66/litre to N77.00/litre).

    Other elements, such as retailers’ margin, were, however, reviewed upwards from N4.60/litre to N5.00/litre; transporters, from N2.99/litre to N3.05/litre; dealers’ margin, from N1.75/litre to N1.95/litre;

    “Accordingly, the ex-depot price of PMS shall be N77.00k per litre while the pump price shall be N86.50k per litre – in line with the prevailing market trend.

    “The key thing here is that with the revision, the open market price has come down slightly. The new pump price is N86.50k, down from N87 per litre, effective from January 1, 2016.

    “However, for NNPC import, because an element of the template which is the financing cost, is not captured in the NNPC template. Therefore, NNPC import is slightly lower. The NNPC price will be N86 per litre, meaning that if you go to NNPC retail stations, you should buy at N86 per litre and then N86.50k in other stations,” Ahmed said.

    The idea is to instill competition and stability in the downstream petroleum sector, he said.

    “Another important point is that this is not static as there will be a quarterly review of the price template. However, if there is a major shift, the minister may call for a review either upwards or downwards, depending on the market.

    “But for now, at least for the first quarter, this price remains for three months, from January to March,” he added.

    Ahmed noted that there was to be a pricing advisory committee made up of industry technocrats and which would sit down from time to time and advise the PPPRA on price movements.

    He added: “But the PPPRA will still sit down and do its work. The committee will advise it on any drastic movement in price.

    “The open market price is N86.29k. If you do the calculation, that means there is an element of over recovery and what we will do now is that we will go back to the marketers and bill them for the recovery.

    “With regards to NNPC, their arrival is N85.93k but they are selling at N86, so there will also be element of over recovery. However, we are comfortable with the numbers.”

    Speaking more on the review, Ahmed said: “In order to encourage investments in retail outlets, we slightly increased the provisions in the retailers, transporters, and dealers’ margins.

    “In terms of distribution margin, we have also revised down the bridging fund and increased the retailers, dealers and transporters’ margins.”

    On the Q1 import permit, Ahmed did not disclose the identity of marketers selected for the period but stated that the agency had considered three key factors in selecting them.

    These factors, he said, include retail outlets ownership; marketers’ performance in previous quarterly allocation; as well as the challenges in sourcing foreign exchange.

    He noted that in allowing the NNPC to import 78 per cent of the total allocated volume, the agency envisaged that the corporation would have little challenges in sourcing for foreign exchange while the Central Bank of Nigeria (CBN) would be able to comfortably take care of the foreign exchange demands of the other marketers who would import the remaining 22 per cent.

    “This measure is to guarantee uninterrupted fuel supply nationwide. Marketers are required to note that there shall be a mid-quarter review of performance where volumes of non-performing marketers, including the NNPC shall be withdrawn and reallocated to performing marketers,” Ahmed explained.

    He also stated that the NNPC had in previous allocations done up to 111 per cent in product importation to stabilise supply, adding that future allocations shall be based on 100 per cent performance in the Q1, 2016 allocation.

    Ahmed said the revised template was built a little bit above the earlier daily consumption rate of 40 million litres per day.

    He said the agency is currently verifying the October, November and December claims of marketers for subsidy, after which the Debt Management Office (DMO) would be notified for further action.