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Economy

Price of 12.5kg cooking gas soars to N8,500

 

—-as marketers warn it may hit N10,000 by December

 

The price of the 12.5 kilogramme of Liquefied Petroleum Gas,( LPG) or cooking gas, has continued to soar in an unprecedented manner as it has now hit N8,500 in many parts of the country.

This was despite the Federal Government’s plan to make the product appealing to the common man.

The government earlier this year launched the National Gas Expansion Programme,( NGEP,) to drive increased utilisation of gas as a better alternative for petroleum fuel for homes, industries and automobiles.

The 12kg of LPG sold for N7,000 in September and below N4,000 last year.

The high price of the product since about three months ago is caused by a supply gap following a drop in importation as the government imposed an import tax on cargo arriving in the country.

Of the 1.2 million metric tonnes, MT, of the product required for consumption in the country, the Nigeria LNG Limited, NLNG, supplies about 450,000MT while independent marketers supply 750,000MT through imports.

The Federal Government’s GEP was designed to make gas more attractive and accessible to the masses, thereby increasing its usage for cooking, transportation, and in industries.

However, despite this plan, prices of cooking gas have kept soaring in recent months, from about N3,500 last December to between N8,000 and N8,500 as at October, this month.

Investigations showed that the landing cost of the product has since skyrocketed as a result of a recent crisis in the foreign exchange market and the imposition of a new tax.

The Petroleum Products Pricing Regulatory Agency, (PPPRA), said out of the 85,264.80MT of LPG consumed in the country in August, 38,040.46MT were imported.

This puts the level of importation at 55.39 per cent versus 44.61 per cent supplied locally.

Further data showed that 21,606.30MT was imported from the United States, while 13,044.266 was imported from Algeria and 12,573.779MT was brought in from Equatorial Guinea.

Recent reports had marketers warning that the price of 12.5kg of the product could hit N10,000 by December if pending concerns were not addressed.

Marketers have debunked inflating prices, passing the buck of rising prices to the NLNG.

On the other hand, the NLNG claimed that marketers lacked enough infrastructure to take up its cooking gas supply, a claim also refuted by the marketers.

The Marketing Manager, NLNG, Austin Ogbogbo, had said: “NLNG has grown its capacity from 50,000 metric tonnes per annum to 450,000 metric tonnes per annum of LPG in the past 14 years.

“Nigeria needs 1.2 million metric tonnes per annum, but even the 450,000 we produce cannot be absorbed by the market’s current infrastructure.”

When asked if the NLNG’s position was true, the National Chairman, Liquefied Petroleum Gas Retailers Association of Nigeria, Michael Umudu, replied in the negative.

He said: “Marketers have the capacity to absorb the 1.2 million metric tonnes annually and this figure will continue to increase.

“Marketers have the capacity; rather, the challenges of the NLNG have to do with logistics. Many depots use to be empty for months; so, why should they say marketers don’t have capacity?”

According to Ubuntu, storage of cooking gas does not end in the midstream facilities, with inland facilities such as gas plants and retail outlets having more storage capacities.

“This is how it works: LPG is discharged in a depot, and LPG trucks are ready to load products to plants. From the plants, retailers refill their cylinders and store in their shops while end-users buy.

“This means that a depot of 5,000MT storage capacity can do a turnover of 15,000MT a month or even more. So, looking at the estimated 1.2 million MT yearly demand, it shows that if NLNG supplies only 100,000MT a month, then the 1.2 million MT target is met,” he said.

He added: “If the depot of 5,000MT storage capacity can do 15,000MT a month, then calculating other depots with even much more capacities and multiplying by three for a month turnover, you will realise that these depots would do up to 150,000MT monthly.

“And going by the 1.2 million MT annual consumption demand, we only consume about 100,000MT a month. So why should NLNG say there is not enough storage?”

The gas retailers’ chairman noted that the NLNG or any other supplier did not need to supply the annual need at once, adding that this was why he called for the improvement of logistics by the LPG producer.

“With respect to logistics, if they (NLNG) can adapt to compatible vessels and engage enough of the vessels, then more than 1.2 million MT annual estimate would be conveniently met,” Umudu added.

Reacting to the position of the marketers, the spokesperson of the NLNG, Eyono Fatayi-Williams, said the gas firm could only give 450,000MT at the moment to the domestic market.

She also observed that there were challenges with logistics, such as the delay of vessels at the Lagos port, but stressed that the NLNG was doing its best to deliver its part in the supply of cooking gas.

She explained that in 2007, Nigeria could only produce 50,000MT of LPG and that the NLNG was asked to intervene, stressing that the gas firm was primarily set up for export.

“Between 2007 and now, because we have guaranteed supply, the market has grown. Today, Nigeria can take over one million tonnes of cooking gas,” Fatayi-William said.

She added: “The maximum production we have of cooking gas is 450,000 metric tonnes annually and the market did over a million metric tonnes last year.

“Also, when we talk about logistics, the maximum amount we can now give, which is the maximum production volume, is less than what the entire country needs. We are not the only producer of LPG but we can only give 450,000MT.”

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Economy

News Alert! CBN revokes operational licenses of 4,173 Bureau De Change operators for breach of regulatory guidelines

CBN Governor, Olayemi Cardoso

The Eyewitness Reporter

In its continuous efforts to sanitize the foreign exchange market and halt the frightening slide of the naira in exchange for the dollars, the Central Bank of Nigeria has revoked the operational licenses of 1,173 Bureau De Change operators.

In a press release issued Friday, March 1st, 2024 and signed by Mrs. Sidi Ali Hakama, the Acting Director, Corporate Communications, the apex bank said the axed BDCs failed to observe at least one of the following regulatory provisions which include payment of all necessary fees, including license renewal within the stipulated period in line with the Guidelines, rendition of returns in line with the Guidelines, compliance with guideline, directives and circulars of the CBN, particularly Anti-Money Laundering(AML), countering the Financing of Terrorism(CFT)and Counter-Proliferation Financing(CPF) regulations.

The apex bank said it relied on the powers conferred on it under the Bank and Other Financial Institutions Act(BOFIA)2020, Act n0.5 and Revised Operational Guidelines for Bureaux De Change 2015(the Guidelines).

“The CBN is revising the regulatory and supervisory guidelines for Bureau de Change operations in Nigeria. Compliance with the new requirements will be mandatory for all stakeholders in the sector when the revised guidelines become effective.

‘Members of the Public are hereby advised to take note and be guided accordingly”, the statement concluded.

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Economy

Anxiety in public service over massive job loss as Tinubu set to implement Steve Oronsaye panel on civil service reform

The Eyewitness reporter
There is palpable tension among the public service workers as President Bola Ahmed Tinubu has approved the full implementation of Steve Oronsaye’s public service reform.
Their anxiety stems from massive job loss that will result from the implementation of the recommendations of the report which seeks the scrapping, subsuming and merging of some Ministries, Departments, and the Agencies of government whose functions are overlapping.
The report also seeks to enhance efficiency in the Federal civil service and reduce the cost of governance.
The Oronsaye report was submitted in 2012 to the Jonathan administration.

In 2014, the Jonathan government released a white paper on the report. The Buhari administration after re-examining the white paper also released a second white paper in August 2022, but did not implement the report.

According to Bayo Onanuga,Special Adviser Information and Strategy to President Bola Ahmed Tinubu, the  Tinubu administration has decided to confront the monster of high governance cost by implementing elements of the report.

According to him, an eight-man committee has a 12-week deadline to ensure that the necessary legislative amendments and administrative restructuring needed to implement the reforms are effected efficiently.The committee comprises the Secretary to the Government of the Federation, Head of the Civil Service, Attorney General and Justice Minister, Budget and Planning Minister, DG Bureau of Public Service Reform, Special Adviser to the President on Policy Coordination, Special assistant to the president on National Assembly. The Cabinet Affairs Office will serve as the secretariat.

Some of the key recommendations of the report for implementation include the National Salaries, Income and Wages Commission to be subsumed under the Revenue Mobilisation and Fiscal Commission.

The National Assembly will need to amend the constitution as RMAFC was established by the constitution.
Infrastructure Concession and Regulatory Commission to be merged with Bureau of Public Enterprise and be rechristened as `Public Enterprises and Infrastructural Concession CommissionNational Human Rights Commission to swallow Public Complaints Commission

The Pension Transitional Arrangement Directorate(PTAD) is to be scrapped and functions to be taken over by the Federal Ministry of Finance

NEMA and National Commission for Refugees to be fused to become the National Emergency and Refugee Management Commission

Border Communities Development Agency to become a department under National Boundary Commission

NACA and NCDC to be merged

SERVICOM to become a department under the Bureau for Public Service Reform(BPSR)

NALDA to return to the Ministry of Agriculture and Food Security.

Federal Ministry of Science to supervise a new agency that combines NCAM, NASENI and PRODA

National Commission for Museums and Monuments and National Gallery of Arts to become one entity that will be known as the National Commission for Museums, Monuments and Gallery of Arts.

National Theatre to be merged with National Troupe.

Directorate of Technical Cooperation in Africa and Directorate of Technical Aid Corp to be merged under the Ministry of Foreign Affairs

 Nigerians in Diaspora Commission to become an agency under the Ministry of Foreign Affairs.

Federal Radio Corporation and Voice of Nigeria to be one entity to be known as Federal Broadcasting Corporation of Nigeria

National Biotechnology Development Agency(NABDA) and National Centre for Genetic Resources and Biotechnology to be emerged into an agency to be known as National Biotechnology Research and Development Agency(NBRDA).

National Institute for Leather Science Technology and National Institute for Chemical Technology to become one agency.

 Nigeria Natural Medicine Development Agency and National Institute of Pharmaceutical Research and Development to become one agency.

The National Metallurgical Development Centre and National Metallurgical Training Institute will be merged.

National Institute for Trypanosomiasis to be subsumed under the Institute of Veterinary Research in Vom, Jos.

The list is inexhaustive.
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Business

“You lied” – FG lambasts cement manufacturers over hike in product price

Ahmed Dangiwa
The Eyewitness reporter 
The Federal Government has picked holes in the reasons proffered by the cement manufacturers for the sudden jump in the price of the product.
It could be recalled that a few days ago, cement recorded an astronomical increase in price as the 50kg of the essential building materials climbed from  N5000 to between N10,000 to N15,000, depending on the location in the country.
Concerned by the sudden hike, which has elicited uproar among already depressed Nigerians, the Federal government summoned the major cement manufacturers and other merchants of building materials in the country such as Dangote Cement, BUA and Lafarge, to an emergency meeting.
Addressing the manufacturers at the meeting, the Minister of Housing and Urban Development, Ahmed Dangiwa, dismissed the reasons given by the cement manufacturers, describing them as untenable.
Whereas the manufacturers blamed the cost of gas and mining equipment for the hike, Dangiwa said key input materials for cement production such as limestone, clay, silica sand, and gypsum, sourced within the nation’s borders, should not be dollar-rated.
He said the price of gas that manufacturers are using as an excuse was not tenable because gas is a raw material found within the country.

The minister further declared that the excuse of an increase in mining equipment should not come up because equipment bought by the manufacturers has been used for decades and not purchased every day.

He however threatened that the federal government may be forced to throw open the borders and allow importation of cement to flood the Nigerian market in a bid to crash the prices of the community should the manufacturers refuse to reduce their prices.
He warned that the cement manufacturers should not push the government into taking this decision which he believed would push them out of business.
The minister said the border was closed to the importation of cement to help local manufacturers.

However, he noted that if the government decides to open the border for mass importation, prices of cement would crash and local manufacturers would be gravely affected.

The minister, who called on the manufacturers to be more patriotic, said BUA Cement, for instance, has been willing and is still willing as at the last time he spoke with them, to crash the price of their cement, lower than the N7000, N8000 agreed by the manufacturers and he sees no reason why the others should not do same.

“The challenges you speak of, many countries are facing the same challenges and some even worse than that but as patriotic citizens, we have to rally around whenever there is a crisis to change the situation.

“The gas price you spoke of, we know that we produce gas in the country. The only thing you can say is that maybe it is not enough.

“Even if you say about 50 percent of your production cost is spent on gas prices, we still produce gas in Nigeria. It’s just that some of the manufacturers take advantage of the situation.

“As for the mining equipment that you mentioned, you buy equipment and it takes years and you are still using it,” he said.

Earlier, Group Chief Commercial Officer of Dangote Cement, Rabiu Umar blamed the high cost of gas and mining equipment for the hike in cement price.

He said: “It is safe to say we are all Nigerians and we are all facing the current head weight that is happening.  I would like to speak on the popular belief that most of the raw materials to produce cement are available locally.

“While we have limestone and in some cases, we have gypsum and some cases coal, the reality is that it takes a lot of forex-related items to produce cement.

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