Nigeria Spent N1.24tn Importing Fuel In 2015

Nigeria spent N1.239 trillion on importation of Premium Motor Spirit, PMS, also known as petrol in 2015, National Bureau of Statistics, NBS, has revealed.

fuel-pumpThe NBS, in its Foreign Trade Statistics for the Fourth Quarter of 2015, stated that the amount spent on fuel import in 2015 represented an increase of 3.08 per cent or N37 billion when compared to the N1.202 trillion spent in the importation of fuel in 2014.

The 2015 figure also represented a 367.55 per cent increase or N974 billion higher than the 2013 fuel imports figure of N264.85 billion.

Giving a breakdown of the 2015 figures on a quarterly basis, the NBS disclosed that in the first quarter of 2015, the country spent N288.871 billion on the importation of petrol, while in the second quarter, the country spent N389.257 billion.

In the third quarter, the NBS said the country spent N250.329 billion; while in the fourth quarter, N310.866 billion was expended in the importation of petrol, which the NBS termed mineral fuel.

On a month-by-month basis, in the months of January to June, the country spent N49.2 billion; N105.973 billion; N133.697 billion; N139.237 billion; N133.793 billion and N116.227 billion respectively on the importation of petrol.

For the months of July to December 2015, N134.14 billion, N85.451 billion, N30.737 billion, N68.083 billion, N120.519 billion and N122.263 billion respectively were spent on the importation of petrol.

Furthermore, the report explained that the bulk of Nigeria’s PMS and other products imports were from Asia, as it spent N2.833 trillion on imports from the continent. Europe followed on the chart, as Nigeria imported goods valued at N2.502 trillion; while it spent N871.275 billion on imports from the Americas, and total imports from Africa stood at N420.379 billion, with ECOWAS countries accounting for N213.768 billion of trade in the continent.

Further breakdown of imports from Asia showed that Nigeria’s imports from Japan, India and China stood at N89.74 billion, N408.572 and N1.567 trillion respectively.

In the case of Europe, the NBS revealed that imports from Germany stood at N210.36 billion; United Kingdom (UK) accounted for N283.759 billion; Netherlands – N415.404 billion, while imports from Italy, France and Spain stood at N157.457 billion, N157.187 billion and N140.074 billion respectively.

In the Americas, Nigeria spent N581.996 billion, N49.725 billion and N171.462 billion on imports from United States of America (USA), Canada and Brazil respectively.

In addition, data from the report also pointed out that the country’s import from countries in Oceania stood at N71.133 billion in 2015.

However, the NBS stated: “The total value of Nigeria’s merchandise trade during the fourth quarter of 2015 stood at N3.653 trillion, 9.2 per cent lower than the value of N4.021 trillion recorded in the preceding quarter. For the 2015 calendar year, the country’s total trade was recorded at N16.427 trillion, amounting to N7.252 trillion or 30.6 per cent less than the total trade value recorded for 2014.

“This development arose largely due to sharp decline in the value of exports; from N16.304 trillion in 2014 to N9.729 trillion in 2015, a decline of 40.3 per cent. A decrease of N676.4 billion or 9.2 per cent in the total imports in 2015 helped to mitigate the declining trade balance, which stood at N3.031 trillion, N5.899 trillion less than the value in 2014.

“The crude oil component of total trade decreased by N4.946 trillion or 41.6 per cent as against the level recorded in 2014. The value of Nigeria’s imports stood at N1.576 trillion at the end of fourth quarter 2015. This was 6.6 per cent less than the value (N1.688 trillion) recorded in the preceding quarter. Comparison with the corresponding quarter of 2014, showed a decrease of N454.6 billion or 22.4 per cent.”

Kerosene Subsidy Returns

The Federal Government on Thursday commenced the payment of subsidy on kerosene to the tune of N1.17 for every litre of the product consumed across the country, latest data from the pricing templates of the Petroleum Products Pricing Regulatory Agency has shown.

This is coming as inspection officers from the Department of Petroleum Resources clamped down on defaulting oil marketers by forcing them to dispense kerosene at the regulated price of N83 per litre.

On January 23 this year, PPPRA’s template for House Hold Kerosene had shown that there was no more subsidy on the product, a development that stakeholders described as a subtle way of ending the subsidy regime.

But the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had argued that the subsidy regime on petrol and kerosene was never terminated by the Federal Government.

According to him, what the government did was to modulate the prices of the commodities based on the fall in crude oil price in the international market.

His argument has now been upheld as the latest figures from the PPPRA show that the government has recommenced the payment of subsidy, and this is based on the marginal rise in the price of crude oil to about $40 per barrel.

The PPPRA is the agency of the Federal Government that fixes and regulates the prices of white products like petrol and HHK, as well as other refined petroleum products across the country.

An analysis of the template posted on its website on March 17, 2016, which was based on Platts’ average prices, revealed that the expected open market price (true cost) of kerosene at filling stations run by independent/major oil marketers was N84.17 per litre.

This is against the official approved retail pump price of N83 per litre at which the outlets are mandated to sell the product.

The PPPRA also stated in its template that the government was making an under recovery of N1.17 on every litre of kerosene consumed in the country; meaning that the commodity is being subsidised to the tune of N1.17 by the government.

For stations run by the Nigerian National Petroleum Corporation, kerosene is being subsidised by N0.81 per litre, according to the regulatory agency.

On why the DPR decided to clamp down on marketers selling above the regulated price, the agency’s Assistant Director, Operations, Abuja Zone, Mr. Ahmed Alaku, told journalists that it was wrong for any dealer to sell above the approved price no matter his or her claims.

Alaku refuted claims by some marketers that they were getting the white products at high rates from depot managers.

“If you claim that you buy the product from the depot at more than the regulated government price, there should be evidence. You cannot come and say you bought the product at N90 per litre and you are selling at N100 without any evidence,” he said.

Oil Prices Rise To Over $40 As OPEC Reorganise

Oil price rises to $40.71 as OPEC mends fences

Oil price rose, yesterday, after the world’s biggest suppliers firmed up plans to meet to discuss an output freeze.

Oil producers, including Gulf OPEC members, support holding talks next month on a deal to keep production at current levels, even if Iran declines to participate, OPEC sources said on Wednesday.

A meeting would increase the likelihood of the first global supply deal in 15 years.

US crude was up 65 cents at 39.11 dollars a barrel at 0452 GMT, having earlier risen as high as $39.38. Brent crude rose 38 cents to $40.71.

“A smaller than expected gain in inventories in the US also supported prices,” ANZ said in a morning note.

Crude inventories increased 1.3 million barrels in the week to March 11 to 523.2 million, a much smaller build than the 3.4 million-barrel increase expected by analysts.

The market is also rallying after a less hawkish US monetary outlook, as the US Federal Reserve held interest rates steady and indicated two rate hikes this year instead of the four expected.

Qatari oil minister, Mohammed Bin Saleh Al-Sada, said producers from within and outside the Organization of the Petroleum Exporting Countries (OPEC) will meet in Doha on April 17 to discuss plans for a freeze in output.

The initiative was supported by around 15 OPEC and non-OPEC producers, accounting for about 73 per cent of global oil production, the minister said.

Since the freeze was first proposed last month, prices have recovered about 50 per cent from decade-low levels.

NNPC Denies Not Remitting Over N3tn In 2014, Admits To Owing FG N326bn

The Nigerian National Petroleum Corporation has denied failing to remit N3.325tn to the Federation Account.

It, however, admitted that it owed the government N326.14bn, which was still being reconciled.

The corporation was reacting to the revelation of the Auditor-General of the Federation to the National Assembly on Monday that the NNPC failed to remit the sum of N3.235tn to the Federation Account for the period ended December 31, 2014.

The corporation stated that the AGF was incorrect.

NNPC in a document signed by its Group Executive Director/Chief Financial Officer, Finance and Accounts, Mr. Isiaka Abdulrazaq, said, “The NNPC wishes to state in strong terms that the AGF’s declaration is inaccurate.

“The Auditor-General of the Federation’s declaration is erroneous. It should also be noted that although this period is before the new NNPC management was appointed in August 2015, the management still deems it fit and important to correct any misinformation about the activities of the corporation as this will adversely affect its current and future financial and operational plans if not corrected.

“The declaration by the AGF may have been born out of misunderstanding of how revenues from crude oil and gas sales are remitted into the Federation Account.”

On how the fund was utilised, the corporation noted that as part of its responsibilities, the NNPC got an allocation of 445,000 barrels of crude oil per day for processing into petroleum products for distribution across the country.

According to the document, the proceeds from the sale of the products are remitted to the Federation Account after deducting the cost associated with the supply and distribution.

The costs, it said, included subsidy on petroleum products.

It recalled that the total amount of subsidy that had been approved and certified for the corporation by the Petroleum Products Pricing Regulatory Agency for the period of January 2012 to December 2014 was N2.34tn, adding that an additional N7.96bn subsidy claim was still under reconciliation.

Refineries Are Finally Running, NNPC To Start Posting Profits In Two Months – Kachikwu

“For the first time”, Nigeria’s refineries “are now ready to work”, Ibe Kachikwu, group managing director of the Nigerian National Petroleum Corporation (NNPC), said on Tuesday.

Kachikwu also said that the corporation, under his leadership, is saving Nigeria N1 trillion in subsidy “removal” and $1 billion in importation programme.

He said the change at NNPC is only just starting, adding that NNPC will be delivering profit in two to three months.

“All the changes that have happened so far, in case you do not know… but I’m sure you follow the numbers and the reports that we publish, but you’ve gone from an average deficit of over N30bn to 3 billion in a period of six months,” he said.

“If you continue on this tangent, this company should continue to show monthly profitability in two to three months. That would be dramatic, and that is even before we have even started – because we haven’t started.

“This is simply through your 20 fixes; you deciding to cut costs, and to watch your expenses and there’s still a huge amount of expenses you still need to cut.

“But imagine what it looks like if you succeeded in identifying and doing all those. Imagine what it would look like if every business unit followed the same principles and monitored cost at those various levels.”

Kachikwu said that for the first time, NNPC has met up with 75 percent of its responsibility to the federation account, highlighting the new ways of the corporation.

“With the new DSDP programme, not solely designed by me, but by all of you, you’re saving the nation $1bn in importation programme, $1bn.

“Look at the fact that with the removal or connivance on the removal of subsidy cost, you are saving the nation N1 trillion. For the first time this organisation is not worrying about where to get the next subsidy money or who is going to pay it.

“For the first time, our refineries are ready now to work. Crude has been pumped from Brass to Port Harcourt. Pipeline is being used for the first time in six years. For the first time we are able to pump to Ilorin, we have not done that in 10 years.”

He assured that in two weeks, the refineries would begin to receive crude via pipelines.

Oil Price Falls Below $40

Despite the pledge by Saudi Arabia to cooperate with other members of the Organisation of Petroleum Exporting Countries (OPEC) to stabilise the oil market, the price of crude oil fell by almost three per cent yesterday after Iran dashed hopes of a coordinated production freeze in the nearest future.

Saudi Arabia and several fellow OPEC members had agreed with non-OPEC Russia to freeze output at January levels in an attempt to prop up prices.

President Muhammadu Buhari, who was in Doha, Qatar early this month, also told OPEC and non-OPEC producers that low oil prices were no longer acceptable.

During a bilateral meeting with the Emir of Qatar, Sheikh Tamim Bin Hammad Al-Thani, Buhari spoke on the need for the members of OPEC and Gas Exporting Countries Forum (GECF) to cooperate to stabilise the oil market for the benefit of their people.

A recent Saudi cabinet statement also disclosed that the kingdom was working towards stability in the oil market and would remain in contact with all main producers in an attempt to limit volatility.

The renewed cooperation between OPEC and non-OPEC members had led to a rise in the price of oil above $40 per barrel but that was still a fraction of the $115 per barrel of 20 months ago.

But following Iran’s revelation on Sunday that it would only join the discussions for cooperation after its output has hit 4 million barrels per day (mbpd), the price of oil fell by about three per cent yesterday.
Iran’s oil exports are due to reach 2mbpd in the Iranian month that ends on March 19, up from 1.75 million in December 2015, according to Reuters.

Iran’s position has returned bearish sentiment over a supply glut that has sent prices crashing in the past 20 months.
Global benchmark Brent crude, which hit a 12-year low of $27.10 per barrel in January and had risen above $40 this month, fell back monday to below $40 a barrel, trading at $39.27, while US crude was down $1.09 trading at $37.41 a barrel.

Iran’s Oil Minister, Bijan Zanganeh was quoted as saying on Sunday that it would join discussions after its output reached 4mbpd.

Reuters reported that Zanganeh met Russian counterpart Alexander Novak in Tehran yesterday but talks focused on long-running discussions about an oil and gas swap mechanism.

According to the Shana news agency, Zanganeh said Iran and Russia could cooperate on the swap, which would see Russia send oil and gas to northern Iran in return for Iranian supply to Russian customers in the Gulf.

Saudi Arabia appeared to have stuck to a preliminary deal reached with some other producers to freeze output, as its crude production held steady in February at 10.22 million barrels per day (bpd), an industry source told Reuters.
OPEC members and non-OPEC producers are likely to meet again in mid-April in Doha to discuss freezing output, OPEC sources told Reuters.

With Iran’s position, the scheduled March 20 meeting in Russia, which was part of an earlier plan, now looks unlikely.

NNPC Did Not Remit N3.2tn Of Sales In 2014 Alone – Auditor General

Nigeria’s Auditor-General, Samuel Ukura, has revealed how the Nigerian National Petroleum Corporation (NNPC) shortchanged federal government revenues by N3.2 trillion in 2014 alone.

Addressing reporters on Monday after submitting his office’s 2014 audit report of the Integrated Payroll and Personnel Information System (IPPIS) to the national assembly, Ukura said the oil corporation under-remitted domestic crude oil sales to the federation account.

Kura implored the federation account allocation committee (FAAC) to investigate the funds and ensure their recovery to the federation’s coffer.

“From the examination of NNPC mandates to CBN on domestic crude oil sales and reconciliation statement of technical sub-committee, FAAC amount not remitted was N3.2 trillion.

“Also, the $235-million sale of gas to NLNG was not paid to the federation account but transferred to some undisclosed Escrow Accounts.

“Another $346.2 million was stated to have been paid and received by the federation account, through NGL funding account as gas export sales, yet no document was available to confirm this”, he said.

He also disclosed that discrepancies up to N73.5 billion were found from various special funds accounts of the federal government.

He added that “total payments amounting to N73.5 billion were made contrary to the established purpose of the funds.

“The sum of N36.4 billion was released to the office of the national security adviser for the rehabilitation and construction of dams instead of the federal ministry of water resources.

“Another N2.8 billion was spent for the procurement of hand sanitisers for schools and critical public places.”

Ukura said N509 million recorded as payment for schools agricultural programmes could not be accounted for.

He added that the report also showed that N7.3 billion was deducted from various MDA accounts as tax but was not remitted into any account of the Federal Inland Revenue Service.

Ukura urged the senate and house of representatives to do justice to the reports so that all the money could be recovered and put to better use.

FG Plans To Start Exportation Of Refined Oil Products

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said that Nigeria will begin to export refined petrol and other petrochemical products within the next four years if plans to ramp up the country’s domestic refining capacity work out well.

Kachikwu stated this recently in Abuja when he briefed journalists on his plans for the country’s petroleum sector.
He noted that if the plans to co-locate new refinery investments within the country’s existing refinery complexes in Kaduna, Warri and Port Harcourt become successful, and the private refinery owned by the Dangote Group comes on stream, Nigeria will produce more petrol than she needs and then export the excess.

He explained that it would take at least three years to get the co-located refineries to begin production, adding that Dangote’s is expected to come on stream between 2019 and 2020.

“The policy on the whole is that we must target a time frame of 12 and 18 months to get out of importation.
“It is not good for the country, it is not a good image, it does not create jobs and we lose tax when it comes to the government and creates a huge amount of quite frankly, emotional backlash when people have to queue looking for fuel,” said Kachikwu.

He said that Nigeria, which imports most of her the petrol she needs for her domestic use was working feverishly to get joint venture partners who can come in and set up new refineries in the country.

“We have advertised recently for co-located refineries and asking people to come and co-locate new refineries into our refineries’ premises so that they can share pipelines, tankages and we are working hard to see that we can complete whatever refinery upgrade we are trying to do within the next 12 to 18 months and obviously for the co-located refineries which are the new ones, targeting to see that we are able to finish within two to three years,” he said.

According to him: “If we do that, obviously we will have excess production capacity for refined products and bear in mind that obviously Dangote is also bringing in its refinery which probably is hitting up about 2019/2020.
“At that point, we begin to look at export market and that really is what we should be doing given the sort of behaviour of oil prices today.”

The minister also talked about improving the incentives for private investments to come in and help upgrade the country’s gas production and supply infrastructure.

He noted in this regards that works on new terms for gas businesses was already going on in the ministry. That, he stated would be discussed further with the oil majors to get their inputs.

“We need to finalise gas terms. A team within the ministry is working very hard now to come up with gas terms and negotiate those gas terms with majors because if the gas terms are there, the investments will go in and once there is certainty we can grow those,” Kachikwu stated.

He added: “Once we have parallel revenues that can come in from gas and some extent the petrochemicals, the reliance on crude oil revenue will ease, so gas is very critical not just in terms of our earning cycle but also in terms of our power mix, being able to supply power to the Nigerian public.”

“I know that the ministry of power is targeting about 7000 megawatts for 2016 and some portion of 2017, and stranded gas is key.

“We need to get infrastructure to get that gas through NPDC or third parties so we have sufficient gas to power the turbine and so we are working on that and the sort of numbers or duration that I see is a period of one to two years to get us this level,” he further explained.

Oil Prices To Rise Again, Kachikwu Says In Recitation

Minister of State for Petroleum, Ibe Kachikwu on Monday said the price of oil would rise again.

Kachikwu while rendering a poem on oil during the sixth African Petroleum Congress in Abuja said the prices may not rise too high, but they would also not stay too low.

He said, “I was asked by an ephemeral subject being whose name is oil to say a few words on its behalf.

“My name is oil, the very kind people who are kind to me call me black gold. The ones who hate me call me crude.

“I worry for my future; everyone now talks down on me. Even farmers who trembled at the sight of my name are now strategizing against me.

“And all my beneficiaries, me have they abandoned. All because the producers have lost their tracks. But I would rise again, and when I do, I will take no prisoners.

“I would new technologies control, I will new technologies control. I will my supremacy confirm. I will my respect regain.

“And my pricing, not too low, not too high, but I would not allow prices to humiliate me. All of you in OPEC, APPA, GCEF and all such bodies who have shown me no respect recently, soon, you’ll eat your words.”

Kachikwu was a onetime publisher of the defunct Hints magazine and was also a fiction writer, in the poem extolled the oil and its prospects for the days to come.

Kachikwu: Nigeria Aiming To Produce 2.6mbpd Of Crude Oil In 2016

Nigeria hopes to mine at least 2.4 million barrels of crude oil from her fields every day in 2016, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has disclosed.

He spoke recently in Abuja on the work plan he intends to pursue in the country’s oil and gas sector for the year.

He said that even though the planned output target of 2.4 million barrels per day (mbpd) of oil was not listed in the country’s annual budget, that it was that production volume that she will mostly pursue.

The minister however noted that about 200,000bpd of the planned total output would be cut off and dedicated for domestic refining. He added that the remaining 2.2mbpd would be kept whole for export.

According to him, the country would have been doing 2.3mbpd of production but for the pipeline incident that was recorded on one of Shell’s facilities last week.
“In terms of volumes, I think we are working at a 100 per cent volume. Before the Shell pipeline incident which happened about a week ago, we were already hitting about 2.3mbpd up from about 2.18mbpd.

“Target this year really is without putting that in the budget, we try to target to see if we can get up to about 2.4mbpd and dedicate some of that to total refining capacity and keep our 2.2mb as whole as we can,” said Kachikwu.

“That is still the target we are shooting for and I think that if we have a 100 per cent performance in terms of funding and oil companies are going full blast in their works, we will see things happen,” he added.

NNPC Station Also Caught Hoarding Fuel, Shut By DPR

The Department of Petroleum Resources, DPR, in Akwa Ibom, said it sealed the NNPC mega filling station in Uyo, for allegedly hoarding petrol.

The Controller (Operations) in charge of Akwa Ibom and Cross River, Bassey Nkanga, told the News Agency of Nigeria in Eket on Sunday that the mega station had amassed the product in its storage tanks, but refused to sell it to members of the public.

Mr. Nkanga, however, said that although the state was experiencing shortage of the product, the situation was not peculiar to the area.

He appealed to residents of the state to be patient as government was working hard to redress the problem.

“The fuel scarcity is not experienced only in Akwa Ibom; it is a national problem.

“Yesterday, we got two trucks of the product for Uyo. We are monitoring the sale of the product to see if there will be any illegality,’’ Nkanga said.

Meanwhile, motorists in the state have continued to express displeasure at situation created by the scarcity of the product.

This is because a litre of the product now sells for between N170 and N200 in Eket and environs and transport fares in the area have increased as a result.