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Tag: removal

  • Kachikwu: Govt ‘ll save N1.4t yearly from subsidy removal

    Kachikwu: Govt ‘ll save N1.4t yearly from subsidy removal

    •’NNPC’s monthly losses drop to N3b’ 

    The Federal Government will save over N1.4 trillion yearly from the removal of oil subsidy, Minister of State for Petroleum Resources Dr. Ibe Kachikwu,has said.

    He spoke when he visited the headquarters of the Nigerian Content Development and Monitoring Board (NCDMB) in Yenagoa, the Bayelsa State capital.

    Kachikwu said the deregulation policy had reawakened the downstream sector and would help the nation become a net exporter of petroleum products in a few years.

    “We have a lot of people interested in investing in our refineries and building more refineries and we will remain committed to the goal which is to reduce importation of petroleum products by 60 per cent by the end of 2018 and become a net exporter of petroleum products by 2019,” he said.

    He described NCDMB as a critical agency in the petroleum industry and expressed delight that the Board had the right personnel to deliver on its mandate. He recalled the Board’s lofty achievements in the last six years of existence, noting that every Nigerian appreciated the good work that it has achieved. He further pledged to provide the right support and encouragement for the Board to deliver on its targets.

    With the fall in crude oil prices and reduced investment in the sector, the Minister charged the NCDMB to restrategise and transit from its role of just propagating local content and local participation to one of finding commonality with industry stakeholders to encourage investment.

    The new focus of the Board, he said, “affects how quickly you process things, it affects the rigidity of some of the terms you ask for as people enter into transactions and the need for increased collaborative relationships”.

    Kachikwu also stated that the corporate restructuring initiated in the Nigerian National Petroleum Corporation (NNPC) has reduced the average monthly loss recorded by the corporation from N40billion in the recent past to N3billion while efforts remained on target to achieve profitability before the end of the year, a feat that had not been recorded in 20 years. He said the achievements were being recorded by staff of the NNPC who had previously given up hope in the system.

    Responding to comments from staff of the NCDMB, the Minister hailed the contributions of various trade unions in the oil and gas industry to the introduction of the deregulation policy, stressing that “the success of the policy was only possible because of the unity that was provided by PENGASSAN, NUPENG, NARTO and every active participant in the oil sector. My role was to be the professor, explaining why we had to do it.”

    He also announced plans to carry out infrastructural re-graphing of Nigeria’s petroleum sector, adding that plans were afoot to review Nigeria’s aging pipelines, depots and gas infrastructure and begin the process of replacing them.

    With regards to gas flaring, the Minister stated that the new thinking was to move away from a penalty based gas regulation which had largely failed over the years to a zero tolerance gas flaring regulation with year 2020 as the new target deadline.

    Admitting that the entire spectrum of petroleum industry required strategic intervention, Kachikwu harped on the need to see the challenges as opportunities to transform the sub sectors into income earners for the populace. According to him, “anywhere you look, you see that the oil and gas sector is populated by a need. We have to translate those needs to economic models that are beneficial to the citizenry. The drop in oil price should motivate us into going into parallel income streams.”

  • Benefits of subsidy removal

    SIR: By now we should all be very conversant with the figures being bandied around from both the protagonists and antagonists of the subsidy removal. We have been inundated with economic arguments and saturated with socio-economic postulations and realities of the subsidy removal from both sides of the divide.

    Rather than add to the library of figures or roar of voices, I want to point out what I consider the biggest benefit of the subsidy removal.

    The biggest benefit is an enriched political education.

    In 2012 I supported the removal of fuel subsidy. In 2016 fuel subsidy was removed. So am I supposed to be happy? Yes – but no. No, I’m not sad. I’m not happy. But I’m amused in a fulfilled way.

    My befuddled amusement is borne out of the fact that those who have implemented and are defending the subsidy removal today are those who fought it to a standstill in 2012. See how they are struggling to defend it.

    In 2012 I knew the fight against subsidy removal was merely politics but the masses were hoodwinked to support the fight. This is what you get when a large portion of the led lacks political, economy and governmental education. They get easily swayed in tandem with the whims and caprices of the politicians. Most people who joined the politicians to kick against the subsidy removal in 2012 didn’t do enough study to find out that subsidy is the biggest scam on the people. Those who should know turned the truth upside down to mislead the gullible masses.

    Increasing the price of anything by the government will always be an unpopular decision anywhere, anytime but enlightened masses will always know when to support its government to take unpopular decisions that will benefit the same masses in the long run. Politics is always about popularity but governance is not a popularity contest. A nation that knows this is on its way to prosperity.

    So now that the APC-led Federal Government has put away politics to implement the subsidy removal policy, I say well done. The times are tough, but I believe wholeheartedly that it will turn out for the good in the long run.

    As for the masses, I will ask, are you learning? Learn the difference between politics and governance. Learn the difference between campaign promises and policy statements. Learn the difference between propaganda and information. Learn the difference between passion and logic. Learn the difference between party fanaticism and facts. 2019 will soon be here, they will come again, what you learn is what you will use to choose.

    To whom brain is given, commonsense is expected.

     

    • First Baba Isa (FBI),

    Abuja.

  • Is it oil subsidy removal, or price hike?

    Is it oil subsidy removal, or price hike?

    I started writing this article at the weekend, believing that the federal government had, at long last, decided to do away with the long standing and costly oil subsidy. Whatever its attractions, it is no longer financially sustainable. Worse still, it has led to long queues recently at the petrol stations right across the country. I was going to commend President Muhammadu Buhari for his courageous decision to remove the oil subsidy. But half way through the article, my eyes caught some newspaper headlines that the federal government may not have dropped the oil subsidy after all. Both the Minister of State, Petroleum, Dr. Emmanuel Ibe Kachikwu, and the National Chairman of the All Progressives Congress (APC), the ruling party, Chief John Odigie-Oyegun, were simultaneously reported by the media in the course of the week as declaring that the wasteful and fraud ridden oil subsidy had indeed been removed. Not so, says the Vice President, Professor Yemi Osinbajo, who personally issued a press statement that there was no removal of the oil subsidy, but only an oil price hike to reflect the downward trend in the exchange rate of the naira. This is as a result of the falling dollar reserves and increasing pressure on the naira exchange rate. Demand for it is long, but supply is short. The independent marketers are now obliged to source their foreign exchange needs from the secondary market at a premium.

    Obviously, there is some confusion and contradiction in senior official circles over this grave matter, with the ‘realists’ in the government urging President Buhari to remove the so-called oil subsidy once and for all, and the ‘romantics’ insisting on maintaining some form of oil subsidy, or the other. The government is being pulled in different directions on the issue by its top economic advisers. But I prefer to believe the Vice President on this matter as he heads the economic team of the government, of which neither Kachikwu, nor Oyegun, are members. He is in a better position to know exactly whether or not the federal government has finally taken a decision to bite the painful economic bullet by removing the oil subsidy once and for all. President Buhari has not been categorical about this. But then, if the oil subsidy had indeed been finally removed, there would have been no need for the federal government to fix the new price of N145 per litre for oil sales. In a fully deregulated and free market, prices are determined by market forces. Fixing the price of oil will seem to suggest that there is still some official subsidy on oil imports and sales. But then there does not appear to be any provision for oil subsidy in this year’s budget. Or is the price of N145 per litre merely a guide which the importers may, or may not, comply with? Either way, the public is entitled to know whether the subsidy stays, or not. Full deregulation, which is what a removal of the oil subsidy implies, means that market forces will determine the pump price of petroleum, and that the government will have little or nothing to do with price fixing, except in a regulatory sense.

    If this is the case, that the oil subsidy stays, I think it is a pity that the Buhari government has again lost the opportunity to bring to an end the sordid state of affairs in our oil sector by not fully deregulating it. It should abandon the oil subsidy in response to compelling financial and economic considerations in our country. Ex-President Goodluck Jonathan made the same mistake in 2012 when, in the face of some domestic opposition, he abandoned his plan to end the oil subsidy. Had he done so then, it would by now have saved the nation about N6 trillion, about the size of this year’s federal budget. In fact, this time, the reaction of the public to the news that the oil subsidy was being removed was overwhelmingly favourable, despite the pains involved. Even oil workers, including NUPENG and PENGASAN, agreed that it was time for the oil subsidy to go. This positive response to the media reports that the oil subsidy was being removed cut across all sections of our economy, including the industrial sector and independent marketers. The reason is that the scarcity of oil supplies in the market was beginning to hurt the economy badly. Consumers were already being forced to pay up to N150 per litre, or more, for oil in the parallel market. Better to have the oil at a higher price and keep business going than close it down because of oil scarcity. It is a function of economic survival. No matter how acute the pain is, it is still far better than outright death. Businesses were beginning to close down right across the country because there was no fuel to run them. The NLC and the TUC should reconsider their plans to go on strike on this matter. They should think more carefully about embarking on a strike for which there is little public support. This is not to say that their anger about the awful mismanagement of the economy is not justified. But a general strike now will harm our country even more. It will lead to more job losses, as employers will be forced to shut down their businesses.

    It was never going to be an easy decision for the federal government to abandon the oil subsidy. When he came to power last year, President Buhari was not keen at all to increase the pump price of oil. A senior adviser of the government with whom I brought up the matter told me bluntly that President Buhari was totally against dropping the oil subsidy. He rejected all advice that he should do so. For him, the removal of the long standing oil subsidy was both an emotional and sentimental issue. He believed that doing so would hurt the poor more, in a situation of mass poverty. But as the IMF has pointed out, only seven per cent of the poorest 20 per cent in our country derive any benefit from the existing oil subsidy. In fact, President Buhari first tried the option of giving the NNPC, which accounts for some 50 per cent of total oil imports, a monopoly on oil imports to reduce the vast corruption in the sector. But this did not work out as planned, due partly to the fabled inefficiency of the NNPC, its abject lack of the needed logistics and infrastructure, and the determination of the oil majors and independent marketer not to offer the NNPC their cooperation. This led to a supply gap and the long queues in the filling stations.

    The NNPC had to admit that it could not perform as expected without the support of the big oil marketers. This was what persuaded President Buhari to bring the independent oil marketers back. The alternative option, a price hike, is indeed courageous as it could have political costs. In the short run, it could make the government unpopular. .

    Yes, the full removal of the oil subsidy will definitely hurt the poor, at least in the short term, as it will increase the cost of living, and this will worsen the prevailing mass poverty in our country.  But the government’s options on subsidy for oil imports were limited. This subsidy accounts for over 20 per cent of the entire federal government budget. It was clear that it could no longer be sustained with falling oil revenues. Savings from the removal of the oil subsidy will be substantial and will fill some of the gaps in our huge budget deficits. More financial resources will be released to meet our huge infrastructure deficits and more jobs will be created as the economy adjusts to a deregulated oil sector.

    The oil subsidy was first introduced at a time when there was a surge in oil revenues. This surge has not been consistent leading to volatility in oil revenues and a heavy and unsustainable burden on the finances of the federal government. Subsidies can in the long run only be met by budgetary surpluses, not deficits. This year, the federal government will be looking to borrowing internally and externally some N2 trillion to balance its budget. Half of this borrowing is expected to be from external sources. But it is unlikely that it can successfully tap external sources for this huge borrowing, not for investment, but for budgetary support. If the subsidy is dropped, the government will be able to save nearly N1.5 trillion, or more, this year. This will reduce its huge budgetary deficits and the need to borrow abroad by nearly half. In fact, with more prudent management of its finances, including the introduction of practical measures to reduce the cost of governance, the federal government can easily balance its budget next year. Oil prices are beginning to rise again and this trend will, if sustained, lead to higher oil revenues. But this favourable trend should not be frittered away again on the wasteful oil subsidy.

    In fact, the federal government should avail itself of this opportunity to undertake a comprehensive review of its entire subsidy programme and strategy. As it is now, it is totally confusing, inconsistent and ad hoc. It must be based on clearer, more coherent and more consistent principles and objectives. That is not the case now. The focus and target of any future financial bailouts and subsidies should be more on production and less on consumption. Financial subsidies on consumption cannot be sustained when the national revenue and economic growth rate are both declining. This year, our growth rate will fall from six per cent to less than three per cent. The oil subsidy is a subsidy on consumption, not production. And there is really no evidence to support the view that it promotes economic growth in our country.

    For most of the time, oil was being sold to the public at a price exceeding the subsidised price. In fact, as we have seen in recent years from the scandals in the oil industry, the so-called oil  subsidy was largely a mirage, a big scam from which the oil barons and importers made scandalously high profits. Next to the huge scam in defence expenditures, most of which as we now know, actually ended up in private pockets, the biggest source of public corruption in our country is in the oil sector, where the fall in global oil prices are not reflected in local prices of imported fuel, and where some fictitious oil importers are paid for oil that was not actually imported. A deregulated oil sector will end all that.

    Now is the right time to address the problem squarely. President Buhari should go the whole hog now by ending the wasteful oil subsidy. The advantages in the long run should make the short term costs and pains more bearable.

  • Fuel price hike not subsidy removal —Osinbajo

    Fuel price hike not subsidy removal —Osinbajo

    •Says new price regime was caused by scarcity of foreign exchange

    ice President Yemi Osinbajo yesterday alleged “many misconceptions” about the new petrol price of N145 per litre, stressing that  the new regime has nothing to do with subsidy removal.

    The new price came into effect on Wednesday from the former N86.50

    Osinbajo, is a statement titled ‘The Fuel Pricing Debate: Our Story’ and  personally signed by him, said the price was caused essentially by  foreign exchange problem in the face of dwindling earnings.

    He said: “I have read the various observations about the fuel pricing regime and the attendant issues generated. All certainly have strong points.

    “The most important issue of course is how to shield the poor from the worst effects of the policy.  I will hopefully address that in another note.

    “Permit me an explanation of the policy. First, the real issue  is not a removal of subsidy. At $40 a barrel there isn’t much of a subsidy to remove.

    “In any event, the President is probably one of the most convinced pro-subsidy advocates.

    “What happened is as follows: our local consumption of fuel is almost entirely imported. The NNPC exchanges crude from its joint venture share to provide about 50% of local fuel consumption. The remaining 50% is imported by major and independent marketers.

    “These marketers, up until three months ago, sourced their foreign exchange from the Central Bank of Nigeria at the official rate. However, since late last year, independent marketers have brought in little or no fuel because they have been unable to get foreign exchange from the CBN. The CBN simply did not have enough. (In April, oil earnings dipped to $550 million. The amount required for fuel importation alone is about $225million!) .

    “Meanwhile, NNPC tried to cover the 50% shortfall by dedicating more export crude for domestic consumption. Besides the short term depletion of the Federation Account, which is where the FG and States are paid from, and further cash-call debts pilling up, NNPC also lacked the capacity to distribute 100% of local consumption around the country. Previously, they were responsible for only about 50%. (Partly the reason for the lingering scarcity).”

    He said that the government realised that it was left with only one option: to allow independent marketers and any Nigerian entity to source their own foreign exchange and import fuel.

    Accordingly, government expected the marketers  to source foreign exchange at an average of about N285 to the dollar, (current interbank rate).

    “They would then be restricted to selling at a price between N135 and N145 per litre,” he said.

    “We expect that with competition, more private refineries, and NNPC refineries working at full capacity, prices will drop considerably. Our target is that by Q4 2018 we should be producing 70% of our fuel needs locally. At the moment, even if all the refineries are working optimally, they will produce just about 40% of our domestic fuel needs.

    “You will notice that I have not mentioned other details of the PPPRA cost template. I wanted to focus on the cost component largely responsible for the substantial rise, namely foreign exchange. This is therefore not a subsidy removal issue but a foreign exchange problem, in the face of dwindling earnings.”

  • ICAN commends FG over fuel subsidy removal

    ICAN commends FG over fuel subsidy removal

    The Institute of Chartered Accountants of Nigeria (ICAN), Ikeja District Society, has commended the Federal Government over the deregulation of the downstream sector of the petroleum industry.

    Mr Gbenga Adewole, the Chairman of the society, speaking in Lagos, said the deregulation would ensure product availability across the country.

    He added that this would also enable investors in the downstream sector to come in and do business, adding that this would encourage job creation.

    He, however, said that the government should have allowed the forces of demand and supply to determine the price instead of fixing the price for the product.

    Speaking, Adewole said, “I support deregulation of the petroleum sector, but what government did is partial deregulation and not total because you don’t deregulate and still dictate the price.

    “After deregulation, it is the forces of demand and supply that will determine the market prices.

    “By fixing the price, you are telling marketers to sell petrol for N145 per litre.

    “All marketers will be working within that fixed price instead of allowing the forces of demand and supply to dictate the price.”

    He urged the government to do all within its power to ensure stability of foreign exchange, adding that only stabilised foreign exchange would encourage marketers.

    He appealed to Nigerians to support the government in its effort to ensure total deregulation of the downstream sector.

  • Stakeholders differ on subsidy removal

    Stakeholders differ on subsidy removal

    Mixed reactions have continued to greet  the call by the Managing Director of the International Monetary Fund (IMF), Ms. Christine Lagarde, on President Muhammadu Buhari’s administration to remove fuel subsidy. For instance, while the call did not go down well with the Nigerian Labour Congress (NLC), the Lagos Chamber of Commerce (LCCI) has thrown its weight behind fuel subsidy removal.

    The IMF boss had during her recent visit to Nigeria recommended the removal of fuel subsidy to the  Federal Government, arguing that “fuel subsidies are hard to defend.” According to her, subsidies “harm the planet,” as “only seven per cent of the benefits go to the poorest 20 per cent.”

    But the NLC disagrees with Lagarde, pointing out that statistics dished out by the IMF MD are at variance with present realities in Nigeria. “I am not sure those statistics are correct. Everyone in Nigeria is depended on oil and gas. Therefore, people will not be able to pay more. Our viewpoint is that the primary purpose of government is comfort. So who will benefit from subsidy removal?” he said.

    Wabba said  the government can do a lot of other things so that Nigerians don’t suffer. While insisting that IMF is about servicing the capitalists, he said the IMF chief’s recommendation for subsidy removal is to make Nigeria  continue to buy refined petroleum products from them (the West).

    Wabba stated that if subsidy is removed, Nigerians would be paying more. While noting that most engagements by IMF chiefs are shrouded in secrecy to the detriment of Nigerians currently facing the brunt of economic hardship, he said Lagarde’s advice to Nigeria would be inimical to the economic well being of Nigerians and will worsen the present situation.

    “Her advice is not going to take us anywhere. IMF cannot point to anywhere in the world where any good example of its policy has worked; either in other parts of the world or Africa where their conditionalities has worked.

    “In most of her engagements, she didn’t make those conditionalities known. The aim is to tie Nigeria to foreign creditors. NLC will not accept this. We want to make it clear that Nigeria is not in short supply of economists who can run our economy,” the labour unionist said.

    However, Lagarde’s advice to Nigeria enjoys the support of the LCCI. Conveying the Chamber’s support for the removal of subsidy, LCCI President, Muda Yusuf, said, “Government should engage NLC for the purpose of proper education and enlightenment on the need to fully deregulate the downstream petroleum sector.”

    He told The Nation that given the  price of crude oil in the global market, petroleum subsidy should not really be an issue at this time.  “At current pump price of petrol, it is doubtful whether any subsidy still exists. Therefore, subsidy debate at this time would at best be academic,” he said.

    The LCCI chief however, said going forward, the government needs to articulate a clearer policy to stimulate investment especially in petroleum refineries. “It would be difficult to attract investors in refineries if Government continues to fix the price of petroleum products,” he stated.

    He further stated that he believes that Nigeria should embrace the modulation model proposed by the Minister of State for Petroleum, Dr. IbeKachikwu. “It is in the interest of this economy and all the citizens that an appropriate policy environment is created to stimulate investment in the petroleum downstream sector. It is important to emphasise that it is these reforms that will attract investors into refineries,” he said.

  • Subsidy removal call: Emir Sanusi under fire

    Subsidy removal call: Emir Sanusi under fire

    Emir of Kano Muhammad Sanusi II yesterday came under fire for calling for the devaluation of the naira and removal of petrol subsidy.

    Labour, a senator and others advised President Muhammadu Buhari to ignore the emir, describing his demand as not good for the poor.

    Heeding the call will take the economy back, rather than ginger it as suggested by the Emir.

    The emir, who is the immediate past governor of the Central Bank of Nigeria (CBN), spoke last week in Lagos, after receiving a Life Time Achievement Award at the All Africa Business Leaders Award West Africa.

    He said: “Does it make sense at this time for the government to continue paying petroleum subsidies? It does not! When you are not earning because oil prices are down, you have to shut down those expense lines that had been known historically to be the site of rent-seeking.

    “Fuel subsidy has to go, our tax base has to expand, value added tax (VAT) has to go up. We can’t continue having an economy in which we collect tax from oil, collect tax from telecoms companies, and then 60-70 per cent of the Gross Domestic Product (GDP) does not pay taxes. This is something that has to be looked at.”

    Sanusi added: “I know that the government has announced its position on exchange rate… It is wrong to continue to pretend that you can keep the naira at a certain level, when the price of oil is falling, without depleting your reserves. You have to make a choice.”

    Nigerian National Petroleum Corporation (NNPC) Group Managing Director Dr. Ibe Kachikwu, told the Senate during his ministerial screening that the president is not inclined to subsidy removal as things stand now.

    CBN Governor Godwin Emefiele has also said the governent would not devalue the naira, which is exchanged for N197 to the dollar at the official market.

    Yesterday, Senator Shehu Sani (Kaduna central) on his facebook page said: “I stand opposed to the devaluation of our national currency and; I stand opposed to removal of subsidy. Devaluing the naira and removing subsidy will worsen inflation, aggravate poverty and ignite a national uprising.

    “Decades of adoption of such capitalist economic strategies by many countries in the developing world especially Africa led those nations to economic quagmire and paralyses.

    “The poor must not continue to pay the price for the corruption and mismanagement perpetrated by past governments.”

    An economic analyst, Mr. Henry Boyo, said: “I think we should ask what should be the implications of doing either or both of those recommendations. If you devalue the naira, there are a numbers of things that will happen. You will find that the cost of production in Nigeria will go up. You will also find that this will have an intimidating effect on the rate of inflation. You will find also that if Nigerian industries remain uncompetitive, they will reduce capacity and lay off workers. That will mean an additional burden on the level of unemployment in the country.

    “You must recognise that the issue of devaluation of the naira is very closely tied to the issue of subsidy. On the other hand, instead of devaluing the naira, you follow a process that will actually make naira exchange rate to appreciate.”

    Trade Union Congress of Nigeria (TUC) President Comrade Boboi Kaigama, said labour would not accept any further devaluation of the naira or subsidy removal on petroleum products.

    “We see them as his personal views and we want to make it clear to him and anybody who wants to listen to his advice that it is not palatable to labour. We will never accept any further devaluation of the naira and we will not be part of the removal of oil subsidy.

    “The government should wait for the consequence of listening to this call because by removing oil subsidy, you are further impoverishing Nigerians.

    “We want a situation where those behind the subsidy scam are punished, then put our refineries in place, come back and discuss with organised labour and let us see whether it is feasible.

    “Otherwise, without putting refineries in place and putting palliatives in place to check increase in prices of goods and transportation and  you are calling for the removal of oil subsidy, I think you are very naive when it comes to looking at the consequence of the issue of removal of oil subsidy”

    Nigeria Labour Congress (NLC) President Ayuba Wabba described the call for the subsidy removal as anti-masses which will further impoverish Nigerians.

    The call, he said, reflected the fact that the former CBN chief has lost touch with realities.

    He said labour would continue to fight any policy or calls that will bring hardship to the masses.

    The former CBN governor, he said, was speaking the minds of the capitalists, marketers and those who want to milk the country dry.

    “We are not in support of that call. There is no doubt that the former CBN governor is no more connected with the people. This is the language of the capitalists, the marketers and those who want to milk the country dry.

    “But, we are happy that President Buhari is a former Petroleum Minister and he knows all the rot in the system. We urge him not to look back and we will continue to support him,” Wabba said.

    General Secretary of the National Union of Textile and Garment Workers of Nigeria (NUTGWN), Mr Isa Aremu, said the former CBN governor was right to have advised the in-coming ministers against “flattery’’ of the President.

    Buhari must also be wary of policy dictatorship that will further undermine growth and development as well as worsen poverty in the country, he added.

    “There is no choice for the President between policy sycophancy and policy dictatorship/policy ambush.

    “Emir Sanusi must rethink outside the box of neo-liberal IMF’s unhelpful policies of devaluation (which he commendably rejected as CBN governor).

    “Nigeria needs a new paradigm of bold policy choices and new star-words in place of boring ideological mantra of devaluation and subsidy removal.

    “The naira in recent times lost its value drastically to the existing devalued rate of N197 to a dollar.”

  • NAPE seeks removal of minister as NNPC’s board chair

    NAPE seeks removal of minister as NNPC’s board chair

    •Industry turnaround proposal sent to Buhari

    The Nigerian Association of Petroleum Explorationists (NAPE) has asked the Federal Government to stop the  appointment of Minister of Petroleum as the statutory chairman of board of directors of the Nigerian National Petroleum Corporation (NNPC).

    The demand forms part of the group’s recommendations in a communiqué it sent to the government after its special workshop, held about two months ago.

    The communiqué, The Nation learnt, was sent to President Muhammadu Buhari  and Vice President Yemi Osinbajo and had already met with the group on issues raised.

    Its President, Dr. Chikwendu Edoziem, confirmed to reporters in Lagos that  members had a meeting with Prof Osinbajo, but didn’t dsiclose what they discussed.

    The communiqué has 14 recommendations including provision of an enabling environment and incentives to increase exploration opportunities, especially in high-risk frontier basins and under-explored deep high pressure high temperature (HPHT), reduction of contracting cycles for services and projects to a maximum of three months and nine months respectively. They added that the lowest bidder concept is being abused through ridiculously low bids.

    The association proposed that low to medium cost technical services bids outside operator estimated cost ranges be disqualified.

    NAPE pledged to sustain engagement and mutual support between oil and gas producing companies and host communities, and recommended that the Petroleum Industry Bill (PIB), as it is, be unbundled and that the relevant sections of the extant Petroleum Act be amended to meet current realities, and position Nigeria to be globally competitive as an oil and gas producing country.

    It stated that the full potential of the Department of Petroleum Resources (DPR) would better be realised if it is empowered as an independent oil and gas industry regulator.

    The association wanted DPR renamed as ‘Petroleum Directorate’ to reflect the proposed changes, increased role and overarching autonomy.

    Other recommendations include restructuring and devolution of NNPC, with a spin-off upstream company that is commercially viable semi-public Nigerian oil and gas company with world-class capacity for hydrocarbon exploration, development and production. This according to them, will allow for effective, purposeful and business-focused decision making.

    The association also said participation in, and transparency of future bid rounds  would be improved by simplifying the guidelines, increasing the frequency of the licensing rounds, and reducing the sizes of the acreages on offer. It added  that modular and micro refineries be built in the ‘Niger Delta Economic Corridor’, pooling the burgeoning illegal and unsafe refinery operators.

    It suggested that the government adopts a strategy of standardised design, streamlined and cumbersome-free approval process, to ensure an efficient turn-around time for construction to full operation of one year.

    “Government should accelerate the funding and completion of the new gas projects in the western axis of the Niger Delta to immediately add about 2,000 million standard cubic feet per day (MMscf/d) of gas production. NAPE supports that stranded associated gas that is flared be utilised for power generation via accelerated approvals for captive power plants while targeting top flaring sites,” the association said.

  • Wabba warns against fuel subsidy removal

    Wabba warns against fuel subsidy removal

    Nigeria Labour Congress (NLC) President  Comrade Ayuba Wabba has warned against fuel subsidy removal as a pre-condition for investment in the downstream oil sector.

    He told The Nation that the Nigerian National Petroleum Corporation (NNPC) Group Managing Director Dr Emmanuel Kachikwu is not on the same page with President Muhannadu Buhari on the reforms in the oil and gas sector.

    He said the ongoing campaign of the NNPC boss for the removal of fuel subsidy does not align with the presidents’vision.

    “We are surprised that Dr. Kachikwu has failed to read the lips of his principal, who has consistently said he is not convinced that the vast majority of poor Nigerians can afford to bear the effect of the removal of the so-called subsidy on petrol.

    ”For us, the NNPC boss has his job clearly cut out for him. If he cannot assist Mr. President and the country in ensuring that our four refineries start working at optimum capacity within the shortest possible time; if he cannot come up with a do-able plan for the Buhari Presidency to establish new refineries to cater for the shortfall in our domestic petroleum products needs; if he cannot articulate a plan for us to establish refineries within and outside our immediate borders that will be refining our crude oil for export, adding value, creating jobs and making more revenue for the country, then he is the wrong man at this point in time to man the NNPC.

    “It is quite clear, and we have said this times without number, that all those campaigning for the withdrawal of fuel subsidy as a pre-condition for investment in the downstream sector of the oil industry are not friends of our country, and indeed the masses of our people.They must be kept at arm’s length,” Wabba said.

    The NLC helmsman argued that removing fuel subsidy tantamount to increasing the suffering of the average wage earner and the majority of Nigerians that do not earn any wages at all.

    “We will continue to resolutely oppose any such plan, and we will mobilise Nigerians in their millions to join us in this struggle,”he added.

  • Bayelsa PDP members seek removal of acting chair

    Ahead of the December 5 governorship election in Bayelsa State, the crisis rocking the state’s Peoples Democratic Party (PDP) has worsened.

    Most of the party’s aggrieved chieftains yesterday called for the removal of Acting Chairman, Chief Serena Spiff-Dokubo, before the primary.

    The party’s stalwarts, who formed a splinter group, the PDP Unity Group (PUG), were said to have insisted that Spiff-Dokubo was not qualified to hold the position.

    Many stalwarts, former political office holders and the party’s former Chairman, Col. Sam Inokoba (retd), have defected to the All Progressives Congress (APC).

    The PUG is against the re-election of Governor Seriake Dickson.

    Its supporters comprise mainly of the governor’s former aides, who were sacked in controversial circumstances and other party leaders who are not disposed to Dickson’s second term bid.

    It was gathered that a meeting organised recently at the Government House in Yenagoa, the state capital, to resolve the impasse between the PUG and Dickson ended in a deadlock.

    PUG members, led by their Coordinator, Mrs, Marie Ebikake, were said to have rebuffed Dickson’s appeals to sheathe their sword.

    Mrs Ebikake and her group reportedly argued that Spiff-Dokubo hails from a different zone (Bayelsa East) from Inokoba’s Bayelsa Central, contrary to the provisions of the party’s constitution.

    Besides, they were said to have stressed that Spiff-Dokubo, despite parading himself as the acting chairman, is also an employee in the state’s Judicial Service Commission, against the party’s law.

    Signs that the meeting ended in fiasco emerged yesterday, following the decision of the group to send a petition to PDP’s acting national chairman, demanding Spiff-Dokubo’s immediate removal.

    Copies of the letter by Mrs Ebikake and PUG’s Secretary, Bokolo Bonsome, were sent to the acting chairman of PDP’s Board of Trustees (BoT) and the party’s Southsouth vice-chairman.

    The letter said the appointment of Spiff-Dokubo was illegal and null from the beginning.

    Quoting from Article 14.5 of PDP’s constitution, PUG posited that Spiff-Dokubo should not have been appointed the acting chairman.

    The Article says: “Where a vacancy occurs in any of the offices of the party, the committee shall appoint a substitute from the zone where the officer originated from, pending the conduct of an election to fill the vacancy.”

    PUG letter reads: “By the current subsisting zoning arrangement of party offices in Bayelsa State, the state chairmanship’s position is zoned to Bayelsa Central Senatorial District while the State Deputy Chairmanship position is zoned to Bayelsa East Senatorial District.

    “The occupants of these positions, until recently, are: Col. Sam Inokoba (retd.) (Bayelsa Central) Chairman and the Deputy Chairman was Chief Nyanayo Tubo (Bayelsa East).

    “Before the unilateral and arbitrary appointment of Chief Serena Dokubo-Spiff, we have it on good authority that Governor Dickson forced Chief Nyanayo Tubo to resign from his position as Deputy Chairman to contest election into the House of Assembly, an election he lost scandalously to the All Progressives Grand Alliance (APGA) candidate.

    “The subsequent replacement of Dokubo-Spiff is considered an illegal and unilateral imposition on the Bayelsa East Senatorial District as it clearly ultra vires the provision of Article 14.5 of the constitution of the PDP.

    “Consequent upon the above and being guided by the provisions of our party’s constitution, we state that the nomination of a candidate to replace …Inokoba (retd.) can only be validly conducted by the party’s stakeholders from the Bayelsa Central.

    “This submission is premised on the fact that the chairmanship position is zoned to the Bayelsa Central Senatorial District. Furthermore, the office of the Deputy Chairman, which is originally zoned to and occupied by somebody from the Bayelsa East, can only be validly replaced by a nominee among the stakeholders of that senatorial district.”

    ‘Our structures are intact’

    Bayelsa State Peoples Democratic Party (PDP) has denied a report that more of its members are planning to defect to the opposition All Progressives Congress (APC).

    A socio-political movement, Bayelsa Great House, was reported at the weekend to have said the party’s former chairman, Col. Sam Inokoba (retd), who recently defected to the APC, was wooing other key stalwarts to join him.

    But in a statement yesterday in Yenagoa, the state capital, PDP Secretary Keku Godspower said the claim was false since PDP’s leadership and members were behind Governor Seriake Dickson and were committed to his re-election.

    Godspower said Inokoba did not have the political strength to swing the support of PDP members for the APC.

    The PDP secretary described the former chairman and other defectors as selfish, who engaged in anti-party activities for some time.

    He said: “We wish to state categorically that contrary to a newspaper report, no member of the Bayelsa State Working Committee (SWC) or the purported non-working committee and our members across the state were considering leaving the party. “We want to make it clear that contrary to the propaganda, all the organs of the party at all levels are intact and are fully behind the re-election of Governor Dickson. Inokoba and his phantom Bayelsa Great House are political charlatans who will be disgraced in due time.”