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More Trouble For Nigeria As Fuel Subsidy Wipes Off Oil Revenue

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More Trouble For Nigeria As Fuel Subsidy Wipes Off Oil Revenue
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-The announcement by the NNPC will have telling consequences for the nation’s economy.

More trouble for Nigeria as fuel subsidy wipes off oil revenueThe announcement by the NNPC will have telling consequences for the nation’s economy.

The Nigerian National Petroleum Corporation (NNPC) has said that it will remit nothing into the federation account in the month of May due to costs incurred from subsidy payments on petrol.

The NNPC made this known in a letter written to the Accountant-General of the Federation, where it explained that it recorded a value shortfall of N111bn in February 2021.

The shortfall, the NNPC said, will affect its contributions to federal allocations to states for April and May.

The announcement will have telling consequences for the nation’s economy. Nigeria relies on oil receipts for most of its monthly expenses including workers’ salaries.

The national oil company said the decision becomes necessary in order to bridge the gap between the landing cost and ex-costal price of petrol, ensure the continuous supply of petroleum products to the nation, and guarantee energy security.

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The letter, seen by PREMIUM TIMES, was dated April 26 and signed by NNPC Chief Financial Officer, Umar Isa. Those copied in the letter include the Minister of Finance, Budget, and National Planning; the Director General, Nigeria Governors Forum; the Director Home Finance; and the Chairman, Commissioners of Finance Forum.

“The Accountant General of the Federation is kindly invited to note that the average landing cost of Premium Motor Spirit (PMS) for the month of March 2021 was N184 per litre as against the subsisting ex-coastal price of N128 per litre, which has remained constant notwithstanding the changes in the macroeconomics variables affecting petroleum products pricing,” the NNPC said.

“As the discussions between Government and the Labour are yet to be concluded, NNPC recorded a value short fall of N111,966,456,903.74 in February 2021 as a result of the difference highlighted above. Accordingly, a projection of remittance to the Federation for the next three months is presented in the attached schedule.

“Accordingly, the AGF is invited to note that the sum of N111,966,456,903.74 will be deducted from April 2021 Oil and Gas Proceeds due to the Federation in May 2021, which will translate to zero remittance to the Federation Account from NNPC in the month of May 2021.”

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NNPC remittances form a major part of revenues shared at the Federation Accounts Allocation Committee (FAAC) meetings in Abuja.

Controversial FAAC

In recent years, allocations to states have always dwindled amid slump in oil revenue and disruption in the global oil market, with FAAC meetings always ending in a stalemate.

Since the coronavirus disrupted global economy and reduced oil revenues, the sharing of revenues among state and federal governments at FAAC has always been steeped in controversies.

Earlier in the month,Edo State Governor, Godwin Obaseki, alleged that the government had to print an extra N60bn in March due to shortfall in FAAC allocation to states.The CBN and the Finance Ministry, however, dismissed the claim.

The new development would likely shape proceedings and deliberations at the next FAAC meeting, as state governments scramble to settle overheads and fix infrastructure.

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Subsidy

The payment of subsidy has been a controversial subject in the management of Nigeria’s oil resources in the last decade.While many Nigerians have called for its removal in order to enable the government invest the fund into other developmental projects, others have condemned such calls, citing it as perhaps one of the few “benefits” the masses enjoy from the government.

Some pressure groups, such as the organised labour, have advised the government to fix the refineries before removing fuel subsidy.

In March, a PREMIUM TIMES analysis showed that the nation may be expending a whopping N102.5 billion monthly to reduce the retail cost of petrol monthly. The NNPC in a subsequent press statement confirmed the projection.

A study supported by the British government estimated that Nigeria spent N10 trillion on subsidies from 2006 to 2018, more than the budgets for health, education or defence.

Millions of Nigerians use petrol to power their vehicles, tricycles, and motorcycles. In the midst of poor electricity supply, others power their generators with petrol.

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Bandits: We Receive Weapons From SSS Agents, Also We Share Income

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Bandits: We Receive Weapons From SSS Agents, Also We Share Income
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The bandits also said some police officers have been a part of the conspiracy that has fueled insecurity across Nigeria.

Armed bandits terrorising different parts of Nigeria have disclosed that they have been receiving arms and ammunition from operatives of the State Security Service and often split ransom payments received at gunpoint.

The criminals told Deutsche Welle in a recent report that they “borrow weapons” from the state agents and then go to work to share ill-gotten gains together.

The bandits also said some police officers have been a part of the conspiracy that has fueled insecurity across Nigeria which President Muhammadu Buhari has been accused of being too lazy to address.

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A spokesman for the SSS did not return a request seeking comments from Peoples Gazette about whether or not the secret police was aware of a possible alliance between its officers and armed bandits wreaking havoc across the country.

The report surfaced amidst widespread claims that Nigerian security forces are fueling insecurity for financial benefits. In 2018, Theophilus Danjuma, a former chief of army staff, said the Nigerian military and other state agents were actively supplying weapons to violent criminals waging a war against minority rural settlers in Nigeria’s north-central.

The Buhari administration denied the allegation, but several indications have emerged repeatedly since then that appeared to show that the government was not as concerned about the raging crisis.

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Last week, Mr Buhari warned Governor Samuel Ortom of Benue, where armed militia elements have killed thousands and razed hundreds of villages since Mr Buhari assumed power in 2015, to either accept the controversial ruga policy or continue to endure violence with his people.

Last month, Mr Buhari also stood Isa Pantami, one of his cabinet ministers who was recently exposed as a hardline jihadist and lover of Osama Bin Laden, Al-Qaeda and other groups and persons long associated with terrorism.

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Nigeria’s daily petrol consumption hits record high of 93m litres

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Nigeria’s daily petrol consumption hits record high of 93m litres
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Nigeria’s daily petrol consumption hits record high of 93m litres

Nigeria’s daily consumption of Premium Motor Spirit (PMS) popularly called petrol was at an unsustainable level at 93 million litres a day in April 2021 from an average of 61 million litres consumed in the previous months. This translates to a daily spend of N7.10 billion on subsidy.

Petrol consumption in West Africa is estimated at 120.80 million litres daily and at 93 million litres daily consumption, this means that Nigeria alone accounts for 77 percent of petrol consumption, even though it has 52 percent of West Africa’s population and accounts for 65 percent of the sub-region’s gross domestic product (GDP).

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Major depots including Nigerian Pipelines and Storage Company Ltd (NPSC) in Ejigbo, Mosimi, Emadeb Energy’s depot, Matrix Energy’s depot, AYM Shafa’s depot, Aiteo’s depot among others lifted a total of 43.90 million litres, accounting for 47 percent of Nigeria’s daily evacuation. Smaller depots around the country make up for the difference.

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How Suspended NPA MD, Hadiza Bala Ceded Intels Terminals To Dangote

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How Suspended NPA MD, Hadiza Bala Ceded Intels Terminals To Dangote
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Suspended Nigeria Ports Authority Manager, Hadiza Bala, was involved in a clandestine ploy to shortchange a company in favour of Africa’s richest, Aliko Dangote, documents obtained have revealed.

Last year, some coastline terminals formerly operated by Integrated Logistics Services’ (INTELs) in Onne ports complex, Rivers state, were confiscated and subsequently awarded to Dangote through a proxy company, International Container Terminal Services (ICTS) Nigeria limited.

Onne Port Complex is the one of the largest Oil and Gas Free Zone in Africa, where major industry players from the exploration up to the completion phases operate.

The complex has two major terminals namely the Federal Ocean Terminal (FOT) and Federal Lighter Terminal (FLT).

For over a decade, INTELs Nigeria, partly owned by former Vice president, Atiku Abubakar, operated some berths at the Federal Ocean Terminal (FOT) of the complex, providing logistics services until 2020.

The three berths of FOT numbered 9, 10 and were taken over by the NPA in a controversial manner, which many thought was a move by President Muhammadu Buhari-led administration move to witch-hunt Abubakar, his opponent in the 2019 election and break the company’s monopoly

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The NPA, in September 2020, issued a notice, announcing that the service operation handled by the Integrated Logistics Services (Intels) Nigeria had been terminated.

It went on to further state that all Service Boats Owners and Operators are to do transactions directly in each of the Port Complex of the Nigerian Ports Authority.

Meanwhile, a memo released to the press, seen by Business Kobo showed that Usman had transferred the berths confiscated from INTELs to ICTSI, a proxy company traced to Dangote, five months earlier.

The leaked memo, dated May 13, was signed by Yusuf Ahmed, NPA’s Director of Lands & Asset Admin on behalf Usman

“Please refer to the lease of land and berths 9, 10 and 11 granted to you at FOT Onne and find attached herewith the draft Lease Agreement for a review of its possible contents before the final copy is produced for execution,” the letter addressed to the managing director of ICTSI read.

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Ahmed urged the company to send their comments for consideration

“A registered surveyor will be appointed to produce the survey plan of the property to incorporation in the Lease Agreement and you will be required to see the surveyors fees,” it further read.

This was not Usman’s first time dealing with Dangote as money transfers between the duo dates back to 2015.

A Nigerian newspaper, Peoples Gazette, had previously reported how Dangote transferred N200 million to a bank account run by Usman during the build up of the 2015 general election.

The transactions were sent in two tranches from two different bank accounts of the Africa’s richest man to Ms. Bala Usman’s account with Access Bank, the newspaper reported.

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“Ms. Bala Usman received the first N100 million transfer on February 6, 2015; while the second N100 million came through three days later on February 9. The transfers carried ambiguous descriptions that made it difficult to conclude their purpose.”

Ms Bala was recently instructed to step aside for an independent investigation into a series of allegations of impropriety.

Nigeria’s transport minister, Rotimi Amaechi, also alleged that the yearly remittance of operating surpluses by the regulatory body from 2016 to 2020 was short of the amount due for actual remittance — a claim, which according to him, should be investigated.

While details of some of other allegations against Usman remain unclear, sources said acts of favouritism were part.

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