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Economy

Global oil price surge put pressure on government to remove daily petrol subsidy of N8.28b

 

—-NNPC , PPPRA disagree on exact figures of petrol subsidy.

–as PMS landing cost hits N264.65/Litre

The rapid rise in global oil prices to record highs has pushed the subsidy cost being incurred by the Federal Government to N8.28bn daily.

This has therefore put pressure on the Nigeria National Petroleum Corporation(NNPC) to remove subsidy on the product which analysts said is consuming more than 50 per cent of its remittances to the Federation Account.

The data also revealed that without subsidy, petrol would be selling for about N300 per litre as the landing cost of the product rose to N276.94 per litre last Friday from N249.42 per litre in July 30.

The Economic Confidential had reported on September 28 that the NNPC spent a total of N905.27bn on petrol subsidy from January to August, citing data from the corporation.

The subsidy, which the NNPC prefers to call ‘value shortfall’ or ‘under-recovery, resurfaced in January this year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in oil prices.

President Muhammadu Buhari has said the federal government’s expenses on petrol subsidy has eaten into the revenue that should have been available to fund the 2021 budget.

He spoke on Thursday when he presented the 2022 appropriation bill at the National Assembly.

He said the government was forced to suspend a further increase in the pump price of petrol due to opposition from the labour unions and other stakeholders.

“The National Assembly will recall that in March 2020, the Petroleum Products Pricing Regulatory Agency(PPPRA) announced that the price of petrol would henceforth be determined by market forces.

“However, as the combination of rising crude oil prices and exchange rate combined to push the price above the hitherto regulated price of 145 Naira per litre, opposition against the policy of price deregulation hardened on the part of labour unions in particular.

“Government had to suspend further upward price adjustments while engaging labour on the subject. This petrol subsidy significantly eroded revenues that should have been available to fund the budget”, observed President Buhari.

Responding to an enquiry on whether NNPC would continue to shoulder the financial burden of petrol subsidy, the corporation’s Group General Manager, Group Public Affairs, Garba-Deen Muhammad, replied, “NNPC has made no secret about the burden it is shouldering.”

The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the crash in oil prices.

The NNPC, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost since it resurfaced.

The price of crude oil, which accounts for a large chunk of the final cost of petrol, has continued to rise in recent months, with Brent, the international oil benchmark, closing at $82.39 on October 8, up from $77.72 on July 30. It increased further to $83.94 per barrel as of 5:05 pm Nigerian time on Monday.

The Petroleum Products Pricing Regulatory Agency(PPPRA) had in March this year released a pricing template that indicated the guiding prices for the month.

The template, which showed that the petrol pump price was expected to range from N209.61 to N212.61 per litre, was greeted with widespread public outcry and was later deleted by the agency from its website.

It was based on an average oil price of $62.22 per barrel, and the landing cost of petrol was put at N189.61 per litre.

Based on the PPPRA template and Platts data, the expected pump price of petrol rose to N299.94 per litre on October 8 from N272.34 per litre on July 30.

The expected retail price of N299.94 per litre and the current pump price of N162 per litre indicate a subsidy of N137.94 per litre as of October 8, compared to N110.34 per litre on July 30.

With daily petrol consumption put at about 60 million litres by the NNPC and a subsidy of N N137.94 per litre, daily subsidy increased to N8.28bn last Friday from N6.62bn on July 30.

The rising price of crude oil pushed the cost of petrol quoted on Platts to $822.75 per metric tonne (N254.25 per litre, using the I&E rate of N414.40/$1) on October 8 from $748.50 per MT (N228.91 per litre) on July 30.

The freight cost increased to $26.77 per MT (N8.27 per litre) last Friday from an average of $21.63 per MT (N6.62 per litre) used by the PPPRA in its March template.

Other cost elements that make up the landing cost include lightering expenses (N4.81), Nigerian Ports Authority charge (N2.49), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N2.17).

The pump price is the sum of the landing cost, wholesale margin (N4.03), admin charge (N1.23), transporters allowance (N3.89), bridging fund (N7.51), marine transport average (N0.15), and retailer margin (N6.19).

While marketers have continued to stress the need to allow market forces to determine the pump price of petrol and do away with subsidy, it remains uncertain whether the discussions between the Federal Government and labour unions will lead to the deregulation of petrol prices.

Meanwhile, both the NNPC and PPPRA have disagreed on the actual amount which the government is pending as a petroleum subsidy.

According to a source in the Petroleum Products Pricing Regulatory Agency (PPPRA), there exists a difference between the agency’s cost and that of the Nigerian National Petroleum Corporation (NNPC).

A subsidiary of the NNPC, the Pipelines and Products Marketing Company(PPMC) is the sole importer of the product.

The NNPC said the source has a higher landing cost than that of the PPPRA. Although the agency had last year announced the deregulation of the product, the Federal Government had recourse to subsidising it when the landing cost became unbearable for the end-users.

The NNPC that termed it under recovery regime has left the pump price at a band between N162 and N165 per litre.

From the PPPRA landing cost of N264.65 per litre, there exists a subsidy or an under-recovery of N102.65 per litre.

In the last few years, many stakeholders within and outside the federal government have called for the scrapping of the subsidy regime for premium motor spirit (PMS), better known as petrol.

Zainab Ahmed, Minister of Finance, Budget and National Planning, in July 2021, advocated the end of fuel subsidy, saying it “costs as much as N150 billion” monthly.

Her comment came four months after Mele Kyari, Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), had said the company “may no longer be in a position” to bear the “subsidy burden”.

 

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Economy

Ojulari, new NNPCL MD, hits the ground running, assembles new management team as he takes over from Kyari

Funso OLOJO 

The new Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Bayo Ojulari, has assembled new management team that will drive the vision of President Bola Ahmed Tinubu in the petroleum sector shortly after he took over the mantle of leadership from his predecessor, Mr Mele Kyari.

It could be recalled that the appointment of the erswhile NNPCL boss, Kyari was terminated and Ojulari was appointed in his stead with immediate effect.

However, in a brief handover ceremony held at the NNPC Towers, Ojulari commended Kyari for his contributions to the growth of NNPC Ltd and his sterling service to the nation.

He disclosed that the objective of his management was to consolidate on the successes of his predecessor and take the company to the next level.

He said though the targets set for his management were quite enormous, he would be relying on the co-operation of the Management and staff of the company, as well as the counsel of his predecessor to achieve set targets.

“I will be counting on your support. I will need it. I will be coming around to seek your counsel,” Ojulari told Kyari.

Earlier in his remarks, Kyari congratulated Ojulari and thanked the Management and staff of the company for their support while in office.

He pledged to do everything within his power to support the new Management to succeed, stressing that he was only a call away.

Soon after the official handing over ceremony, the new new NNPCL, Mr Ojulari announced the appointment of a new 8-man Senior Management Team .

The team which will be headed by the GCEO, Mr Bashir Bayo Ojulari, has Roland Ewubare as Group Chief Operating Officer; Adedapo Segun as Group Chief Financial Officer; and Olalekan Ogunleye as Executive Vice President Gas, Power & New Energy.

Other members of the team are: Udy Ntia as Executive Vice President Upstream; Mumuni Dagazau as Executive Vice President Downstream; Sophia Mbakwe as Executive Vice President Business Services; and Adesua Dozie, as Company Secretary & Chief Legal Officer.

All appointments are with immediate effect.

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Economy

Tinubu sacks Kyari, NNPCL GMD, appoints Ojulari as new CEO,  reconstitutes board

Funso OLOJO

President Bola Ahmed Tinubu has approved sweeping changes on the board of the Nigerian National Petroleum Corporation Limited (NNPCL) as he removed the Board Chairman, Chief Pius Akinyelire and the Chief Executive Officer, Mallam Meke Kolo Kyari.
Their removal took immediate effect.
The President also removed all other board members appointed with Akinyelure and Kyari in November 2023.
Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, revealed the development in a statement he signed in the early hours of Wednesday titled, ‘President Tinubu reconstitutes NNPC limited board, appoints new Chairman, Group CEO.’
“President Tinubu removed all other board members appointed with Akinyelure and Kyari in November 2023.
The new 11-man board has Engineer Bashir Bayo Ojulari as the Group CEO and Ahmadu Musa Kida as non-executive chairman,” the statement reads.
Adedapo Segun, who replaced Umaru Isa Ajiya as the chief financial officer last November, has been appointed to the new board by President Tinubu.
Six board members, non-executive directors, represent the country’s geopolitical zones.
They are Bello Rabiu, North West, Yusuf Usman, North East, and Babs Omotowa, a former Managing Director of the Nigerian Liquified Natural Gas( NLNG), who represents North Central.
President Tinubu appointed Austin Avuru as a non-executive director from the South-South, David Ige as a Non-Executive Director from the South West, and Henry Obih as a non-executive director from the South East.
Ahmad Musa Kida, NNPC new chairman,
Bayo Bashir Ojulari new NNPC GCEO,
Mrs Lydia Shehu Jafiya, Permanent Secretary of the Federal Ministry of Finance, will represent the ministry on the new board, while Aminu Said Ahmed will represent the Ministry of Petroleum Resources.
All the appointments are effective immediately ,April 2nd, 2025.
President Tinubu, invoking the powers granted under Section 59, subsection 2 of the Petroleum Industry Act, 2021, emphasised that the board’s restructuring is crucial for enhancing operational efficiency, restoring investor confidence, boosting local content, driving economic growth, and advancing gas commercialisation and diversification.
President Tinubu also handed out an immediate action plan to the new board which include to conduct a strategic portfolio review of NNPC-operated and Joint Venture Assets to ensure alignment with value maximisation objectives.
Since 2023, the Tinubu administration has implemented oil sector reforms to attract investment.
Last year, NNPC reported $17 billion in new investments within the sector. The administration now envisions increasing the investment to $30 billion by 2027 and $60 billion by 2030.
The Tinubu administration targets raising oil production to two million barrels daily by 2027 and three million daily by 2030.
 Concurrently, the government wants gas production jacked to 8 billion cubic feet daily by 2027 and 10 billion cubic feet by 2030.
Furthermore, President Tinubu expects the new board to elevate NNPC’s share of crude oil refining output to 200,000 barrels by 2027 and reach 500,000 by 2030.
The new board chairman, Ahmadu Musa Kida, is from Borno State.
 He is an alumnus of Ahmadu Bello University, Zaria, where he received a degree in civil engineering in 1984.
 He also obtained a Postgraduate Diploma in petroleum engineering from the Institut Francaise du Petrol (IFP) in Paris.
He started his career in the oil industry at Elf Petroleum Nigeria and later joined Total Exploration and Production as a trainee engineer in 1985.
Musa became Total Nigeria’s Deputy Managing Director of Deep Water Services in 2015.
Last year, he became an Independent Non-Executive Director at Pan Ocean-Newcross Group.
Apart from his oil industry career, Ahmadu Musa Kida is a former basketballer and the President of the Nigerian Basketball Federation(NBBF) board.
Ojulari, the new NNPC Limited Group CEO, hails from Kwara State.
Until his new appointment, he was Executive Vice President and Chief Operating Officer of Renaissance Africa Energy Company.
His Renaissance recently led a consortium of indigenous energy firms in the landmark acquisition of the entire equity holding in the Shell Petroleum Development Company of Nigeria (SPDC), worth $2.4 billion.
Like Kida, Ojulari is also an alumnus of Ahmadu Bello University, Zaria.
He graduated with a degree in Mechanical Engineering.
 He worked for Elf Aquitaine as the first Nigerian process engineer to begin a stellar career in the oil sector.
From Elf, he joined Shell Petroleum Development Company of Nigeria Ltd in 1991 as an associate production technologist.
Apart from working in Nigeria, he worked in Europe and the Middle East in different capacities as a petroleum process and production engineer, strategic planner, field developer, and asset manager.
In 2015, he became the managing director of Shell Nigeria Exploration and Production Company (SNEPCO).
During his career, he was chairman and member of the board of trustees of the Society of Petroleum Engineers (SPE Nigerian Council) and a fellow of the Nigerian Society of Engineers.
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Economy

Dangote group remits N402.3 billion tax to government coffers in 2024

Gloria Odion 
The Pan African Conglomerate, Dangote Industries Limited and its subsidiaries, have disclosed that it paid over N402 billion in taxes in 2024, making it the highest taxpayer in the country.
Dangote’s Chief Branding and Communication Officer, Anthony Chiejina, declared during a meeting with some senior media executives who visited him in his Lagos Office.
He said Dangote Industries Limited (DIL) and its subsidiaries, namely, Dangote Cement, NASCON, Dangote Packaging Limited among others, remitted a total of N402.319billion for the out-gone year as taxes as responsible business enterprises.
Recall that Federal Inland Revenue Service (FIRS) had in late 2024 recognised  Dangote group and its subsidiary, Bluestar Shipping as the most tax compliant organizations in the country during its Special Day at the 2024 Lagos International Trade Fair organised by the Lagos Chamber of Commerce and Industry (LCCI).
The Federal Inland Revenue Service is Nigeria’s agency responsible for assessing, collecting and accounting for tax and other revenues accruing to the Federal Government of Nigeria.
Chiejina told his visitors that as a responsible business organisation, DIL and its subsidiaries have never shieded away from its obligations either to the government in the form of tax payment at all levels or to host communities in the form of Corporate Social Responsibility (CSR).
According to him, the Group’s corporate strategy has evolved just as its businesses have grown, matured and diversified into new sectors and regions over the last four decades.
He noted that Dangote Group has almost single-handedly taken Nigeria to self-sufficiency in cement and refined petroleum products and is expanding rapidly across Africa.
Dangote Group and its subsidiaries were recognised as number one most compliant in tax payment in the country, just as its subsidiary Dangote Cement, the country’s leading cement manufacturer, at another occasion won three awards at the FMDQ Gold Awards in Lagos as the most active business in the Foreign Exchange market.
Dangote Cement Plc was adjudged as the Largest Commercial Paper Quotation on FMDQ and Single Largest Corporate Debt Issue on FMDQ.
 Also, Dangote Industries Ltd also emerged as the “Most active corporate in the foreign exchange market”.
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