•Refineries’ production, input costs will raise price to current level – Kyari

•NNPCL says 1.8 billion litres petrol available, queues won’t exceed Saturday

•Reps demand relief, palliatives for Nigerians, want oil swap deal suspended

The local production of Premium Motor Spirit, otherwise known as petrol, by Dangote Refinery, Port Harcourt Refining Company and others in Nigeria is not going to change the pump price of the commodity, the Nigerian National Petroleum Company Limited has said.

The NNPCL’s Group Chief Executive Officer, Mele Kyari, who disclosed this during an interview on Arise television in Abuja on Thursday, stressed that the notion that petrol prices would reduce once the country starts domestic production was false.

Kyari confirmed that the Dangote Refinery, which was inaugurated on May 22, 2023, by former President Muhammadu Buhari, would start pushing out products by the end of July and early August.

He also stated that the Port Harcourt Refinery would be delivered by the end of the year, adding that the facility was expected to further boost local production of petrol.

But Kyari declared that despite the volume of petrol being expected from these facilities, the cost of the commodity would not reduce, regardless of the fact that the product was produced locally.

“There is a notion that if the product is processed locally, prices will reduce. Let me make it clear that it is not going to change anything. If you produce locally, the refineries will also input the cost of production and other things and it will be sold at the current price.

“There will also be no subsidy when local production starts because there is no cash-to-back subsidy, this country no longer has the resources to continue with subsidy,” Kyari stated.

Fuel queues
Speaking on when the fuel queues being witnessed across the country would clear, during another interview on Channels TV, the NNPCL boss said the queues would not exceed Saturday.

“I don’t see it staying beyond another day or two, maximum. It can actually be on Saturday. We have supplies. The key trouble with the PMS system is supply, but I have supplies.

“There are over 810 million litres of PMS in depots, tanks and fuel stations across the country, so you don’t have the problem of transferring those from marine to land, you already have them on the ground,” he stated.

He validated the PMS pricing document for various states that trended on Wednesday on the internet, stating that the document was from the NNPCL.

“You have seen a document in the space out there. Every company does this. It is a marketing document. It was not a price announcing document, every company keeps this record and adjusts it appropriately on the basis of changing conditions in the market.

“So what you saw was just an internal company document that found its way into the internet. It is an NNPC document but it was not intended to be an announcement and is not an announcement, because it can change the next day,” Kyari stated.

On whether there was enough product in-country, he said, “Today I have 1.8 billion litres of PMS and that means that if we don’t do anything, I’ll have sufficient fuel for the next 30 days in my hands.

Kyari explained that the company had over 800 million litres of petrol on land, stored in filling stations, tank farms and depots, while its total stock for both marine and land stood at about 1.8 billion litres.

“But, of course, the way we supply is not this way, so we maintain this level of supply consistently. That means you will see the arrival of products every day so that you continue to maintain that level of safety.”

‘Subsidy not realistic’
Speaking to journalists after a meeting with the National Chairman of the All Progressives Congress, Senator Abdullahi Adamu, at the party secretariat in Abuja on Thursday, Kyari revealed that the administration of President Bola Tinubu had concluded arrangements to have one of the four refineries repaired and operating at an optimal level before the end of the year.

The NNPCL boss argued that it was no longer justifiable to continue subsidising the commodity given the high opportunity cost the Federal Government was suffering from funding it.

Kyari, who was received by the APC chairman and members of the National Working Committee at about 12.30 pm, confessed that the country could no longer sustain the expensive subsidy regime.

According to him, over 38 per cent of the total fuel distributed in the country was consumed by Lagos, Abuja, Kano and Rivers.

Kyari explained that following the hike in pump price and the resultant effect on commercial fare, the president was working out some palliative measures to ease the pains of Nigerians.

He also added that there was an ongoing process of rehabilitation to ensure one of the refineries was ready this year.

Kyari lamented that despite its N2.8tn indebtedness to the NNPCL, the Federal Government had yet to release funds for 2022 and 2023 subsidies.

He said, “There was a subsidy in 2022 but in 2023, not a single naira was provided for the purpose. And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8tn that the federation should have given back to the NNPC.

‘’For any company, when you have negative N2.8tn, there is no company in the whole of Africa that will lend to you. You cannot have receivables. The provision of subsidy is there but absolutely there is no funding for it. It means it is only on paper. It doesn’t exist.

“We can no longer bear it. If we continue, we will run into defaults and the default of NNPC is the default of Nigeria. Once NNPC goes into default and liquidity, it affects every borrowing done by the country, even the sub-nationals. Your lenders will come back to you and say your country can no longer pay.

‘’The only way you can stop this is to stop this conversation around subsidy. It is why Mr President announced that the subsidy is gone. In 24 hours, the bond market appreciated. It is nothing else other than the statement around subsidy and balancing of the apex market. These two elements are a major concern for every investor all over the world. Every partner that we have is worried about.’’

Inflation expected
Kyari acknowledged that the price increase would trigger inflation, noting that the market forces would determine what happens subsequently.

He noted, “Before today, the average subsidy level was N400bn every month. There is nothing anybody can do about it. There is this common argument that the masses will suffer. I agree that once you increase prices of this proportion, as it has happened, it will have an impact on inflation. There is no doubt about it. The market determines what happens next. Even inflation in many countries goes up when you have economic indices become difficult.

“Mr President’s target is to have seven per cent growth of GDP. You cannot have it if you have this disruption in your demands and consumption pattern. Very many of us here have at least two cars in our houses including myself. When you buy fuel of 100 litres in an SUV, you are literally subsidising three litres with N100 for all of us.

‘’Even the consumption itself is clearly skewed in locations and states where the level of economic activities are higher than the others. It is very understandable and that is why people can afford it in Abuja, Lagos, Port Harcourt, and Kano. So over 38 per cent of the total fuel distributed in this country ends up in these places. All the other parts of the country suffer for it and you can see the relativity.’’

Kyari submitted that the price at which petrol was being sold now is the current market price of the commodity.

‘’The price you are seeing today at our stations is the current market price of the commodity and what this means is that prices in the market can go down at any time and the market will adjust itself. The beauty of this is that there will be a new entrance because oil marketing companies now will want to invest, they have been reluctant to come in because of the subsidy,’’ he stated.

With the latest development, the NNPCL chief said the market would regulate itself, adding that oil marketing companies could now import products or buy locally-produced ones and take them into the market and sell at commercial prices.

He added, ‘’You would see competition even with NNPCL, and by law, the company can’t do more than 30 per cent of the market going forward. So competition will surely come in and definitely, the market will regulate the price itself. It is an instantaneous price and in two weeks, you will see the adjustment that is happening in many jurisdictions.

‘’But ultimately, you would see changes in price downwards and that is very likely. Efficiency will come in and every lacuna in the sector will be taken out because of the new situation.

‘’The current price is not fixed and will surely change and we did it to announce various prices depending on our cost by location and by the realities around us knowing full well that the NNPCL is the single supplier of the market today and we are seeing that exit coming very quickly. There will be no monopoly and we will not continue to be the only supplier.’’

Meanwhile, the House of Representatives has called on the Federal Government to end subsidies on not just petrol but all petroleum products.

The House, however, urged the government to roll out palliatives and other measures to cushion the effects of the removal of the PMS subsidy on Nigerians.

These were part of the recommendations by the House Ad Hoc Committee on the Need to Investigate the Petroleum Products Subsidy Regime in Nigeria, which the lawmakers considered as a Committee of the Whole and adopted in plenary on Thursday.

Chairman of the committee, Ibrahim Aliyu, had laid the report, 11 months after the task was assigned to the panel.

The committee recommended that “the Federal Government should remove subsidies on all petroleum products.”

It also recommended that “the Federal Government should immediately design measures and palliatives to cushion the effects of the subsidy removal for Nigerians, effective from this year 2023, through the provision and procurement of Compressed Natural Gas buses as an alternative transport system with cheaper fuel consumption.”

The panel also said the government should introduce intermodal, regional and national transport systems to ease the mass movement of people across the country.

In addition, the committee recommended that the Nigerian Midstream and Downstream Petroleum Regulatory Commission should issue stricter and most appropriate regulations as provided in the Petroleum Industry Act to ensure that Nigerians were not short-changed through profiteering.

The lawmakers equally said the Revenue Mobilisation Allocation Committee should lead a reconciliation meeting between the NNPCL, Federal Inland Revenue Service, Joint Venture Contracts and the NMDPRC on the utilisation of their crude entitlements.

The report partly read, “With the total deregulation of the sector, all the agencies involved in crude lifting/security should have a representative with the Nigeria Navy as a lead agency to physically assess and document daily crude production and lifting;

Oil swap
“The committee also recommends that the Federal Government should, as a matter of urgency, liaise with the National Assembly to fashion out critical areas of economic development, in which the additional revenue from the proposed subsidy removal will be appropriately utilised.

“A further investigation, through a forensic audit by the Office of the Auditor General for the Federation, be made to ascertain whether the N413bn borrowed from the Central Bank of Nigeria for subsidy payments was refunded after the passage and assent of the 2015 budget as earlier approved by the President and the report of the Auditor General to be submitted to the House for further legislative action.

“With the subsidy removal, the Federal Government should forthwith suspend all Direct Sales Direct Purchase (oil swap) contracts. NNPCL should act by the provision of the PIA to ensure that the country is not sub-changed in both production, lifting and sales of crude.

The committee further recommended that the Nigeria Customs Service and the Weight and Measures Department of the Federal Ministry of Industry, Trade and Investment be equipped to ascertain the actual daily crude oil lifting from the country for proper checks and balances.

Another recommendation was that the Nigeria Extractive Industries Transparency Initiative Act, 2007, be amended by the National Assembly to be in tune with global best practices.

The panel further recommended that the National Assembly, especially the House standing or ad hoc committees in the 10th Assembly be saddled with such responsibility to conduct “a full-scale investigation on the defaulting oil companies and MDAs that have not met the expectations of the committee to ascertain their level of involvement or otherwise and further protect the commonwealth of the country.”

The House on June 29, 2022, resolved to investigate payments for subsidy on petroleum products, especially petrol, under the Muhammadu Buhari administration.

The Speaker of the House, Femi Gbajabiamila, had set up the panel whose probe covered 2017 to 2021, with the mandate to report back to the House within eight weeks for further legislative action.

The probe was based on a motion titled, ‘Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021,’ which was unanimously adopted after it was moved at plenary by a member of the House, Sergius Ogun.

In a related development, the Nigeria Labour Congress has dismissed reports that it would embark on a nationwide protest against the increase in the pump price of petrol.

In a statement on Thursday, signed by its head of information, Benson Upiah, the congress noted that it would keep the public abreast of its moves.

The union had demanded the reversal of the fuel pump price while a meeting between the labour leaders and the FG deadlocked on Wednesday.

But clarifying its position following speculations about its next move, the congress said, “In as much as we are outraged by this mindless price increase which is intended to bring untold hardship to ordinary Nigerians, we have no plan to start any action tomorrow (today).

“What we do have for now are organ meetings slated for tomorrow, Friday, June 2nd, 2023 to deliberate on the price issue. We promise to keep Nigerians informed on our next line of action after our meetings.’’

In reaction to the fuel price hike, the Edo Civil Society Organisations on Thursday blocked a section of the Benin/Lagos highway in protest against the subsidy removal.

The protest, which was held at different locations in the state, obstructed vehicular movements forcing commuters to trek long distances.

Source: https://punchng.com/Dangote-PH-refineries-others-wont-change-fuel-price-NNPCL

Subsidy is gone.



So pè otilo [ e don go]

He will deny this for being misinterpreted in the next 24 hours

So what's the difference between local production and importation?

He did not say why the price will remain same. He only said that the refineries will add cost of refining the product, why will the pump price remain same if the cost of importation is removed?

It costs money to maintain and keep a refinery running, and it also costs money to transport refined products.

Dangote also did take loans to build and upgrade refineries as well....in dollars.

At the end of the day, prices will remain high.

The thing is, if we had taken the medicine in 1993...30 years ago, by now we would have been all right. Lying to ourselves instead is what brought us here.

I thought when we start local production logistics cost like freight would be eliminated so what's the difference nah nawaoh . Anyway this would mean the only advantage of the local production is availability of the products and Strengthening of the naira

Larry1960:
I thought when we start local production logistics cost like freight would be eliminated so what's the difference nah nawaoh . Anyway this would mean the only advantage of the local production is availability of the products and Strengthening of the naira

There is still the cost of transporting the product from refinery to end user by haulage/trucks.

That costs money. Before, part of the subsidy costs went to paying for such things, now that's ended.

1Alex:
So what's the difference between local production and importation?

He did not say why the price will remain same. He only said that the refineries will add cost of refining the product, why will the pump price remain same if the cost of importation is removed?

That is the insincerity on there part, Nigerian don't trust.
What is the essence of having a local refinery to produce locally when the price will be same as imported, maybe he smoked weed before going on the show.

Nigerians must watch these people closely and don't give them breathing space .... they just take Nigerians for fools.

nairalanda1:


There is still the cost of transporting the product from refinery to end user by haulage/trucks.

That costs money. Before, part of the subsidy costs went to paying for such things, now that's ended.

I know, but you can't compare the total cost on importation of these products to their different destinations with d cost of transportation when producing locally and transporting it to the different locations. There is supposed to be a slight difference there by reducing the price a little bit. Even So many anlysts have analysed this

Abeg if na so then they should continue importing na only be say we are killing our naira

Omo e surprise me when the guy talk say even when we start local production like when pH refinery starts price would remain the Same

There is no landing cost again nah
Okay he's talking of cost of maintaining the refinery shey those ones abroad no dey factor in that too for the price to be at that level too

nairalanda1:
It costs money to maintain and keep a refinery running, and it also costs money to transport refined products.

Dangote also did take loans to build and upgrade refineries as well....in dollars.

At the end of the day, prices will remain high.

The thing is, if we had taken the medicine in 1993...30 years ago, by now we would have been all right. Lying to ourselves instead is what brought us here.

My brother, read what you wrote again. Why build a refinery with loans when the price of petrol product will not go down. So dangote is only interested in passing the pains to Nigerians making profits to repay back the loans

If that is the case, the loans Dangote took should have been used for something else that will be of benefit to Nigerians at least. Who will payback those loans. Nigerians through taxes

nairalanda1:


There is still the cost of transporting the product from refinery to end user by haulage/trucks.

That costs money. Before, part of the subsidy costs went to paying for such things, now that's ended.

Transportation cost applies locally but what Nigerians are saying is freight cost associated with exporting and importing back our refined product becomes alienated under local production.

therefore you can't minus freight cost from Total cost and still tell us PMS price will still be the same as imported. they aint being sincere

Do you know other cost associated with Freight that will be cut off, and you are telling us all that won't count

Freight cost to and from nigeria , landing cost . Foreign refining expenses as well as taxes in the countries with the refineries . How will it not reduce?

However , I always said Dangote is no fool . He borrowed money to build the refinery . He would rather sell at the current price or higher to quickly meet his financial obligation . In fact if it is 1000 per litre the better for him . Why do you think that subsidy removal coincides with the start of his refinery ? Make we dey play dey go .

chidiokay:



Transportation cost applies locally but what Nigerians are saying is freight cost associated with exporting and importing back our refined product becomes alienated under local production.

therefore you can't minus freight cost from Total cost and still tell us PMS price will still be the same as imported. they aint being sincere

Do you know other cost associated with Freight that will be cut off, and you are telling us all that won't count

At the end of the day, the problem is, people want to be paid.

Transport costs are expensive, mind you. Remember our roads are bad, and distances are long.


That's why we have to get the railways fixed and a pipeline network running so that we have reduction in transport costs too.

Nigerians are watching. Stop playing

nairalanda1:


At the end of the day, the problem is, people want to be paid.

Transport costs are expensive, mind you. Remember our roads are bad, and distances are long.


That's why we have to get the railways fixed and a pipeline network running so that we have reduction in transport costs too.

Bro is it not the same transport cost we incured when trucks move product from depot in Lagos to various destinations,

We know Transportation cost remains but the focus is the Freight cost, excise duties & other cost associated with Importing PMS that will cease, Let them run the calculation for us, these people are unrepentant thieves
When you import a car, imagine the shipment is free, will it still cost you the same amount as the one in the dealer shop

adenigga:



•Refineries’ production, input costs will raise price to current level – Kyari

•NNPCL says 1.8 billion litres petrol available, queues won’t exceed Saturday

•Reps demand relief, palliatives for Nigerians, want oil swap deal suspended

The local production of Premium Motor Spirit, otherwise known as petrol, by Dangote Refinery, Port Harcourt Refining Company and others in Nigeria is not going to change the pump price of the commodity, the Nigerian National Petroleum Company Limited has said.

The NNPCL’s Group Chief Executive Officer, Mele Kyari, who disclosed this during an interview on Arise television in Abuja on Thursday, stressed that the notion that petrol prices would reduce once the country starts domestic production was false.

Kyari confirmed that the Dangote Refinery, which was inaugurated on May 22, 2023, by former President Muhammadu Buhari, would start pushing out products by the end of July and early August.

He also stated that the Port Harcourt Refinery would be delivered by the end of the year, adding that the facility was expected to further boost local production of petrol.

But Kyari declared that despite the volume of petrol being expected from these facilities, the cost of the commodity would not reduce, regardless of the fact that the product was produced locally.

“There is a notion that if the product is processed locally, prices will reduce. Let me make it clear that it is not going to change anything. If you produce locally, the refineries will also input the cost of production and other things and it will be sold at the current price.

“There will also be no subsidy when local production starts because there is no cash-to-back subsidy, this country no longer has the resources to continue with subsidy,” Kyari stated.

Fuel queues
Speaking on when the fuel queues being witnessed across the country would clear, during another interview on Channels TV, the NNPCL boss said the queues would not exceed Saturday.

“I don’t see it staying beyond another day or two, maximum. It can actually be on Saturday. We have supplies. The key trouble with the PMS system is supply, but I have supplies.

“There are over 810 million litres of PMS in depots, tanks and fuel stations across the country, so you don’t have the problem of transferring those from marine to land, you already have them on the ground,” he stated.

He validated the PMS pricing document for various states that trended on Wednesday on the internet, stating that the document was from the NNPCL.

“You have seen a document in the space out there. Every company does this. It is a marketing document. It was not a price announcing document, every company keeps this record and adjusts it appropriately on the basis of changing conditions in the market.

“So what you saw was just an internal company document that found its way into the internet. It is an NNPC document but it was not intended to be an announcement and is not an announcement, because it can change the next day,” Kyari stated.

On whether there was enough product in-country, he said, “Today I have 1.8 billion litres of PMS and that means that if we don’t do anything, I’ll have sufficient fuel for the next 30 days in my hands.

Kyari explained that the company had over 800 million litres of petrol on land, stored in filling stations, tank farms and depots, while its total stock for both marine and land stood at about 1.8 billion litres.

“But, of course, the way we supply is not this way, so we maintain this level of supply consistently. That means you will see the arrival of products every day so that you continue to maintain that level of safety.”

‘Subsidy not realistic’
Speaking to journalists after a meeting with the National Chairman of the All Progressives Congress, Senator Abdullahi Adamu, at the party secretariat in Abuja on Thursday, Kyari revealed that the administration of President Bola Tinubu had concluded arrangements to have one of the four refineries repaired and operating at an optimal level before the end of the year.

The NNPCL boss argued that it was no longer justifiable to continue subsidising the commodity given the high opportunity cost the Federal Government was suffering from funding it.

Kyari, who was received by the APC chairman and members of the National Working Committee at about 12.30 pm, confessed that the country could no longer sustain the expensive subsidy regime.

According to him, over 38 per cent of the total fuel distributed in the country was consumed by Lagos, Abuja, Kano and Rivers.

Kyari explained that following the hike in pump price and the resultant effect on commercial fare, the president was working out some palliative measures to ease the pains of Nigerians.

He also added that there was an ongoing process of rehabilitation to ensure one of the refineries was ready this year.

Kyari lamented that despite its N2.8tn indebtedness to the NNPCL, the Federal Government had yet to release funds for 2022 and 2023 subsidies.

He said, “There was a subsidy in 2022 but in 2023, not a single naira was provided for the purpose. And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8tn that the federation should have given back to the NNPC.

‘’For any company, when you have negative N2.8tn, there is no company in the whole of Africa that will lend to you. You cannot have receivables. The provision of subsidy is there but absolutely there is no funding for it. It means it is only on paper. It doesn’t exist.

“We can no longer bear it. If we continue, we will run into defaults and the default of NNPC is the default of Nigeria. Once NNPC goes into default and liquidity, it affects every borrowing done by the country, even the sub-nationals. Your lenders will come back to you and say your country can no longer pay.

‘’The only way you can stop this is to stop this conversation around subsidy. It is why Mr President announced that the subsidy is gone. In 24 hours, the bond market appreciated. It is nothing else other than the statement around subsidy and balancing of the apex market. These two elements are a major concern for every investor all over the world. Every partner that we have is worried about.’’

Inflation expected
Kyari acknowledged that the price increase would trigger inflation, noting that the market forces would determine what happens subsequently.

He noted, “Before today, the average subsidy level was N400bn every month. There is nothing anybody can do about it. There is this common argument that the masses will suffer. I agree that once you increase prices of this proportion, as it has happened, it will have an impact on inflation. There is no doubt about it. The market determines what happens next. Even inflation in many countries goes up when you have economic indices become difficult.

“Mr President’s target is to have seven per cent growth of GDP. You cannot have it if you have this disruption in your demands and consumption pattern. Very many of us here have at least two cars in our houses including myself. When you buy fuel of 100 litres in an SUV, you are literally subsidising three litres with N100 for all of us.

‘’Even the consumption itself is clearly skewed in locations and states where the level of economic activities are higher than the others. It is very understandable and that is why people can afford it in Abuja, Lagos, Port Harcourt, and Kano. So over 38 per cent of the total fuel distributed in this country ends up in these places. All the other parts of the country suffer for it and you can see the relativity.’’

Kyari submitted that the price at which petrol was being sold now is the current market price of the commodity.

‘’The price you are seeing today at our stations is the current market price of the commodity and what this means is that prices in the market can go down at any time and the market will adjust itself. The beauty of this is that there will be a new entrance because oil marketing companies now will want to invest, they have been reluctant to come in because of the subsidy,’’ he stated.

With the latest development, the NNPCL chief said the market would regulate itself, adding that oil marketing companies could now import products or buy locally-produced ones and take them into the market and sell at commercial prices.

He added, ‘’You would see competition even with NNPCL, and by law, the company can’t do more than 30 per cent of the market going forward. So competition will surely come in and definitely, the market will regulate the price itself. It is an instantaneous price and in two weeks, you will see the adjustment that is happening in many jurisdictions.

‘’But ultimately, you would see changes in price downwards and that is very likely. Efficiency will come in and every lacuna in the sector will be taken out because of the new situation.

‘’The current price is not fixed and will surely change and we did it to announce various prices depending on our cost by location and by the realities around us knowing full well that the NNPCL is the single supplier of the market today and we are seeing that exit coming very quickly. There will be no monopoly and we will not continue to be the only supplier.’’

Meanwhile, the House of Representatives has called on the Federal Government to end subsidies on not just petrol but all petroleum products.

The House, however, urged the government to roll out palliatives and other measures to cushion the effects of the removal of the PMS subsidy on Nigerians.

These were part of the recommendations by the House Ad Hoc Committee on the Need to Investigate the Petroleum Products Subsidy Regime in Nigeria, which the lawmakers considered as a Committee of the Whole and adopted in plenary on Thursday.

Chairman of the committee, Ibrahim Aliyu, had laid the report, 11 months after the task was assigned to the panel.

The committee recommended that “the Federal Government should remove subsidies on all petroleum products.”

It also recommended that “the Federal Government should immediately design measures and palliatives to cushion the effects of the subsidy removal for Nigerians, effective from this year 2023, through the provision and procurement of Compressed Natural Gas buses as an alternative transport system with cheaper fuel consumption.”

The panel also said the government should introduce intermodal, regional and national transport systems to ease the mass movement of people across the country.

In addition, the committee recommended that the Nigerian Midstream and Downstream Petroleum Regulatory Commission should issue stricter and most appropriate regulations as provided in the Petroleum Industry Act to ensure that Nigerians were not short-changed through profiteering.

The lawmakers equally said the Revenue Mobilisation Allocation Committee should lead a reconciliation meeting between the NNPCL, Federal Inland Revenue Service, Joint Venture Contracts and the NMDPRC on the utilisation of their crude entitlements.

The report partly read, “With the total deregulation of the sector, all the agencies involved in crude lifting/security should have a representative with the Nigeria Navy as a lead agency to physically assess and document daily crude production and lifting;

Oil swap
“The committee also recommends that the Federal Government should, as a matter of urgency, liaise with the National Assembly to fashion out critical areas of economic development, in which the additional revenue from the proposed subsidy removal will be appropriately utilised.

“A further investigation, through a forensic audit by the Office of the Auditor General for the Federation, be made to ascertain whether the N413bn borrowed from the Central Bank of Nigeria for subsidy payments was refunded after the passage and assent of the 2015 budget as earlier approved by the President and the report of the Auditor General to be submitted to the House for further legislative action.

“With the subsidy removal, the Federal Government should forthwith suspend all Direct Sales Direct Purchase (oil swap) contracts. NNPCL should act by the provision of the PIA to ensure that the country is not sub-changed in both production, lifting and sales of crude.

The committee further recommended that the Nigeria Customs Service and the Weight and Measures Department of the Federal Ministry of Industry, Trade and Investment be equipped to ascertain the actual daily crude oil lifting from the country for proper checks and balances.

Another recommendation was that the Nigeria Extractive Industries Transparency Initiative Act, 2007, be amended by the National Assembly to be in tune with global best practices.

The panel further recommended that the National Assembly, especially the House standing or ad hoc committees in the 10th Assembly be saddled with such responsibility to conduct “a full-scale investigation on the defaulting oil companies and MDAs that have not met the expectations of the committee to ascertain their level of involvement or otherwise and further protect the commonwealth of the country.”

The House on June 29, 2022, resolved to investigate payments for subsidy on petroleum products, especially petrol, under the Muhammadu Buhari administration.

The Speaker of the House, Femi Gbajabiamila, had set up the panel whose probe covered 2017 to 2021, with the mandate to report back to the House within eight weeks for further legislative action.

The probe was based on a motion titled, ‘Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021,’ which was unanimously adopted after it was moved at plenary by a member of the House, Sergius Ogun.

In a related development, the Nigeria Labour Congress has dismissed reports that it would embark on a nationwide protest against the increase in the pump price of petrol.

In a statement on Thursday, signed by its head of information, Benson Upiah, the congress noted that it would keep the public abreast of its moves.

The union had demanded the reversal of the fuel pump price while a meeting between the labour leaders and the FG deadlocked on Wednesday.

But clarifying its position following speculations about its next move, the congress said, “In as much as we are outraged by this mindless price increase which is intended to bring untold hardship to ordinary Nigerians, we have no plan to start any action tomorrow (today).

“What we do have for now are organ meetings slated for tomorrow, Friday, June 2nd, 2023 to deliberate on the price issue. We promise to keep Nigerians informed on our next line of action after our meetings.’’

In reaction to the fuel price hike, the Edo Civil Society Organisations on Thursday blocked a section of the Benin/Lagos highway in protest against the subsidy removal.

The protest, which was held at different locations in the state, obstructed vehicular movements forcing commuters to trek long distances.

Source: https://punchng.com/Dangote-PH-refineries-others-wont-change-fuel-price-NNPCL

I don’t agree with this man. He is trying to make refineries earn excessive profits. What about the cost of shipping which is no more there? What about the exchange rate which makes it more expensive?

nairalanda1:


There is still the cost of transporting the product from refinery to end user by haulage/trucks.

That costs money. Before, part of the subsidy costs went to paying for such things, now that's ended.

That cost of transportation is still there now, so it affects nothing. The cost of maintaining refineries blah blah is already incorporated in the cost of buying from the source. Now, the cost of shipping from the source has been totally eliminated. So, why will local production not reduce price? It's either that Kyari fella is a dunce, or he's not being sincere. Or both. The joy in this subsidy removal is that it has cut off so many economic saboteurs who were profiting from that loophole. Read somewhere some Nigerian (ex govt officials) went to the extent of building refineries outside Nigeria, importing the product into Nigeria and still gaining from the subsidy. Not to talk of those that smuggle products to go and sell in neighbouring countries.

Wey that guy that was foaming mouth about dangote refinery
Come and see the English kyari is throwing around

SamboAnguissa:


That cost of transportation is still there now, so it affects nothing. The cost of maintaining refineries blah blah is already incorporated in the cost of buying from the source. Now, the cost of shipping from the source has been totally eliminated. So, why will local production not reduce price? It's either that Kyari fella is a dunce, or he's not being sincere. Or both. The joy in this subsidy removal is that it has cut off so many economic saboteurs who were profiting from that loophole. Read somewhere some Nigerian (ex govt officials) went to the extent of building refineries outside Nigeria, importing the product into Nigeria and still gaining from the subsidy. Not to talk of those that smuggle products to go and sell in neighbouring countries.

Refineries have to be maintained yearly. It's not like they would be used without maintenance. Then there are upgrades and stuff.

Then there is the matter of taxes....And ....staff welfare and payment. Staff have to be paid very GOOD salaries. And government is not giving Dangote a dime to pay those things.

Welcome to the thing called business. You won't sell stuff at a loss to help the poor, would you?

This guy seem extremely happy sharing bad news lately. Like Kyari like Emefiele- prophets of doom!
Petrol queues have already disappeared, what is important is reduction in price through market competition or whatever means

nairalanda1:


At the end of the day, the problem is, people want to be paid.

Transport costs are expensive, mind you. Remember our roads are bad, and distances are long.


That's why we have to get the railways fixed and a pipeline network running so that we have reduction in transport costs too.

Are the products getting to the various points of sales under this current system by teleportation? You guys are saying transportation costs as if it only applies to local production. Cost of shipping is the only variable in this importation/local production dilemma. Under local production it is totally eliminated. So, why won't that bring about reduction in price?

Shey una don hear?

nairalanda1:


Refineries have to be maintained yearly. It's not like they would be used without maintenance. Then there are upgrades and stuff.

Then there is the matter of taxes....And ....staff welfare and payment. Staff have to be paid very GOOD salaries. And government is not giving Dangote a dime to pay those things.

Welcome to the thing called business. You won't sell stuff at a loss to help the poor, would you?

Stop validating corruption!
How do you have the raw material and a factory production facility and the cost unit of sale of your product is the same as those imported.

baralatie:

Stop validating corruption!
How do you have the raw material and a factory production facility and the cost unit of sale of your product is the same as those imported.

Where did I say corruption was ok?

We can't keep subsidy. I don't like it, but it is what it is...and it was one of the things that was fuelling corruption well well.

Good am.

SamboAnguissa:


Are the products getting to the various points of sales under this current system by teleportation? You guys are saying transportation costs as if it only applies to local production. Cost of shipping is the only variable in this importation/local production dilemma. Under local production it is totally eliminated. So, why won't that bring about reduction in price?

Get the pipelines fixed, the rail fixed, prices may reduce.

But at the end, profits have to be made. So that things run well.

Anyway, we shall see how things go.

nairalanda1:


Refineries have to be maintained yearly. It's not like they would be used without maintenance. Then there are upgrades and stuff.

Then there is the matter of taxes....And ....staff welfare and payment. Staff have to be paid very GOOD salaries. And government is not giving Dangote a dime to pay those things.

Welcome to the thing called business. You won't sell stuff at a loss to help the poor, would you?

The refineries overseas that the products are imported from don't undergo maintenance? They don't pay taxes? Are there staff volunteers who work for free? You think those refineries have not factored all of that into their cost of production, which will be added to the price they sell? I don't get your point.

This nnpx boss is mad, even a child knows he is saying rubbish... This people take us the citizens as fools with no thinking faculty

I read somewhere that Libya sale 14 naira per light. That's because it's locally produced

nairalanda1:


Where did I say corruption was ok?

We can't keep subsidy. I don't like it, but it is what it is...and it was one of the things that was fuelling corruption well well.

Good am.

If you say you don't want subsidy because of the implication of cost.
Should you now by local production engage in sustaining the same cost unit of the product as if you are importing the product

SamboAnguissa:



The refineries overseas that the products are imported from don't undergo maintenance? They don't pay taxes? Are there staff volunteers who work for free? You think those refineries have not factored all of that into their cost of production, which will be added to the price they sell? I don't get your point.

We were refining petrol in 'substandard' refineries to keep costs down. (The info is on google.).

And the refining cost is a part of why subsidies cost too too much.

I want to ask this question. Can the President sack the CEO of NNPCL?

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