₦airaland Forum

budaatum:
This is like fighting against cheap Chinese imports in order to protect local industry.

It's in fact the opposite of:

Companies with factories in China, who wish to export their EVs to the EU will be hit with additional tariffs ranging from 7.8% (Tesla) to 35.3% (SAIC) depending on the level of cooperation and transparency they displayed during the EU's investigation. The new tariffs may be imposed for a duration of up to five years.

And is like EU paying subsidy to encourage Chinese imports.

A good strategy if the plan is to kill off local production and destroy jobs.

I hope Dangote wins his case, though I'm certain the powers that will will seek other ways around him.

budaatum:
This is like fighting against cheap Chinese imports in order to protect local industry.

It's in fact the opposite of:

Companies with factories in China, who wish to export their EVs to the EU will be hit with additional tariffs ranging from 7.8% (Tesla) to 35.3% (SAIC) depending on the level of cooperation and transparency they displayed during the EU's investigation. The new tariffs may be imposed for a duration of up to five years.

And is like EU paying subsidy to encourage Chinese imports.

A good strategy if the plan is to kill off local production and destroy jobs.

I hope Dangote wins his case, though I'm certain the powers that will will seek other ways around him.

Dangote didn't make the law. He's simply operating within it.

FG made Energy security and sufficiency the target in our law and Dangote is simply trying to work within that to his advantage

budaatum:
Dangote is not monopolising crude oil refining in Nigeria.

https://nairametrics.com/2024/06/20/ten-completed-refineries-in-nigeria-and-their-production-capacity/

He's currently the market leader and may remain so for a while though

tundegan:
Dangote is just playing the game, he knows the law.

This is just a way to ensure his refinery operates in a favorable environment. He is not the first person to do this and he wont be the last.

At the end of the day, we the Nigerians will benefit from all this.

Who are the others that have done this?

Thanks

See

Implications of Dangote Refinery's Case Against NNPC and Others on Nigeria's Energy Sector

By Abdulrazaq Hamzat

Dangote Petroleum Refinery and Petrochemicals FZE has filed a lawsuit at the Federal High Court in Abuja, seeking to nullify the import licenses issued to the Nigeria National Petroleum Corporation Limited (NNPC), Matrix Petroleum Services Limited, A.A. Rano Limited, and four other companies. These licenses permit the importation of refined petroleum products that Dangote Refinery already produces.

In suit number FHC/ABJ/CS/1324/2024, Dangote Refinery is also claiming N100 billion in damages from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The lawsuit alleges that NMDPRA continues to issue import licenses to NNPC, Matrix Energy, and others for products like Automotive Gas Oil (AGO) and Jet Fuel, despite Dangote Refinery producing enough to meet Nigeria's daily consumption needs.

Legal and Regulatory implication

This lawsuit revolves around the Petroleum Industry Act (PIA) and other relevant Nigerian regulations that prioritize domestic production over imports. Dangote asserts that the actions of NNPC and NMDPRA violate these laws, designed to protect Nigeria’s national interest.

The PIA, enacted in 2021, governs Nigeria's oil and gas industry, promoting efficient petroleum operations, local content, and self-sufficiency. A key objective is to prioritize domestic refining and reduce reliance on imports. Dangote will argue that NMDPRA’s continued issuance of import licenses contradicts this, especially as Dangote Refinery already meets Nigeria’s demand for AGO and Jet-A1.

Section 317 of the PIA mandates NMDPRA to support and regulate local refining capacity. If Dangote Refinery can meet the country's needs, the issuance of import licenses undermines the PIA’s intent.

By law, NMDPRA issues import licenses based on market needs, while balancing local production and imports. Dangote argues that further issuance of these licenses is unnecessary and potentially in breach of NMDPRA’s obligation to prioritize domestic production under the PIA.

Economic and Market Considerations

The issuance of import licenses promotes competition, benefiting consumers. However, Dangote’s argument centers on market sufficiency. If domestic production can meet demand, imports could distort the market, negatively affecting local producers' profitability, potentially violating Nigerian fair competition laws.

Additionally, Dangote may argue that continuing to issue licenses leads to oversupply, harming local producers and undermining the PIA’s self-sufficiency goals. The claim for damages could be based on revenue losses due to the sale of imported products over domestically produced ones.

If the lawsuit succeeds, it could prompt the Nigerian government to reassess its approach to issuing import licenses, especially when domestic refineries can meet national needs. The Competition and Consumer Protection Act (2019) might be invoked to argue against anti-competitive practices that unfairly impact local producers.

Implications for Nigeria's Energy Sector

1. Boost to Domestic Refining: A win for Dangote could set a precedent for prioritizing locally refined products, encouraging investors to build more refineries, confident that the regulatory environment will favor local production.

2. Economic Benefits: Reducing Nigeria’s reliance on imports would enhance energy security and stabilize foreign exchange reserves, improving the naira. Increased local production could also shift Nigeria’s trade balance, reducing imports and potentially increasing exports of refined products.

3. Market Competition: Limiting imports may reduce competition, with companies like NNPC losing market share to local refiners like Dangote. This could raise concerns about reduced competition and pricing if Dangote becomes the dominant domestic supplier.

4. Price Stability: Local refining might reduce transportation costs and import duties, lowering fuel prices. However, operational challenges at local refineries could cause short-term supply disruptions if import licenses are restricted.

5. Job Creation and Economic Growth: Expanding domestic refining would create jobs directly in refinery operations and indirectly in related sectors like logistics. A thriving local refining industry could boost growth in petrochemicals and manufacturing, diversifying Nigeria’s economy beyond crude oil exports.

6. Regional Influence: If domestic refineries meet demand and produce surplus for export, Nigeria could become a refining hub for West Africa, strengthening its regional influence and attracting foreign investment.

Regulatory Adjustments

The government may need to revise its criteria for granting import licenses, potentially limiting them to times of supply shortfalls or emergencies. This would align with the PIA’s goals of promoting domestic refining. NMDPRA could face scrutiny over how it balances imports with domestic production, ensuring that its actions align with national objectives of increasing local refining capacity and energy self-sufficiency.

Alternative Outcome

If Dangote loses the case and the court rules in favor of NMDPRA, importation of refined petroleum products will continue. This could maintain competition in the market, potentially benefiting consumers by keeping prices competitive due to the mix of imports and local production.

However, continued importation could lead to market oversupply, affecting the profitability of local refineries like Dangote’s. Local producers may find it difficult to compete with cheaper or more readily available imported products, potentially discouraging further investment in domestic refining.

Losing the case might force Dangote to reconsider its business strategy, including its pricing structure. Increased competition could pressure the refinery to lower prices, reducing profitability and possibly slowing down expansion plans or investments in production capacity.

If imports continue unrestricted, potential investors in Nigeria’s refining industry may hesitate to invest, uncertain about the regulatory environment's support for local producers. This may contradict the PIA’s principle of promoting self-sufficiency in refining.

A loss for Dangote would also perpetuate Nigeria’s reliance on imported refined products, continuing the country’s foreign currency outflow on fuel imports and worsening foreign exchange pressures if global oil prices fluctuate or the naira weakens.

The Nigerian government, having removed fuel subsidies, could face challenges managing a market with both local and imported products. If international fuel prices rise, consumers might bear the brunt at the pump, especially if local refining isn’t sufficiently supported.

In conclusion, the outcome of Dangote’s lawsuit could significantly impact Nigeria’s energy sector. A win for Dangote would encourage local refining, reduce dependence on imports, and potentially lower fuel prices. However, it also risks creating a near-monopoly, necessitating strong regulatory oversight to ensure fair market practices.

On the other hand, if Dangote loses, the current model of importation alongside domestic production will continue, potentially limiting the growth of Nigeria’s refining capacity and hindering the broader goals of energy self-sufficiency envisioned under the Petroleum Industry Act (PIA).

Zionmdde:
That price determined by regulators is where the issue lies
The regulators don't produce the gas, the gas producers are only mandated to sell to IPPS cheap.
As I said before, the problem is not availability but price

The problem is availability and price.

Both have something to do with the challenge.

While I understand your position on profitability, I believe a middle point can be arrived at, which wouldn't jeopardize domestic supply and profitablity.

We can call for a more liberalized sector, with more incentive to the producers.

But certainly, we cannot disregard domestic market at the detriment of foreign profit

nairalanda1:
So, at the end, you want a law that would compel gas producers to sell at a loss?

The problem with such a law, is that the gas producers would be always at the verge of collapse, which ,means more subsidy payments...which drain government revenues....which means loans have to be taken to cover the drained revenues...which means more debt burden.

It is very harsh, but unless gas companies are allowed to sell at a profit at home and oversease, nothing will change.

No, I want a law to prioritize Nigeria's domestic market over individual profit

Nigeria needs a law to guarantee domestic supply of gas, just as it has for oil, which all indigenous electricity companies and other gas suppliers can benefit from.

People can't be exporting gas at the detriment of electricity security in Nigeria because of their own profit

Zionmdde:
Readiness to pay is not the problem. How much they want to pay is the problem. If you are a producer, how will you feel selling at a loss

IPPs don't fix price.

There's existing gas prices as determined by the regulators

budaatum:
Basically, we can't produce gas.

https://businessday.ng/news/article/gas-shortage-squeezes-nigerias-lng-exports-by-13/

I think it's more about supply than production

Zionmdde:
Gas Shortage is never the problem.

Let the gencos come clean on why they lack gas supply. U can't for E&Ps to sell at a loss. And even at that, u still don't pay.

Many IPPs are ready to pay without supply

ObiORBiafra:
So what will happen when the whole nation start using CNG?

What does CNG go to do with this?

Gas Problem in Nigeria's Electricity Sector
By Abdulrazaq Hamzat

Gas shortage is a major problem in the energy sector of Nigeria, particularly in electricity generation.

A recent report by the National Electricity Regulatory Commission (NERC) says that more than 70% of electricity generation companies in Nigeria relies on gas for their production and gas shortage means that these generating companies cannot function effectively.

While this fact is widely acknowledged, the extent of the gas shortage and its overall impact on the sector's stability and efficiency often go unnoticed.

Recent reports highlight the dire situation facing our electricity sector.

According to NERC, Four power plants owned by the Niger Delta Power Holding Company failed to generate electricity in the second quarter of 2024.

These plants—Omotosho NIPP, Ihovbor NIPP, Alaoji NIPP, and Sapele GT NIPP—are part of the National Integrated Power Project and collectively boast an installed capacity of 2,000 megawatts.

Alarmingly, these facilities recorded a Plant Availability Factor (PAF) of zero during this period, unable to produce any power from April to June due to gas shortages.

It is important to note that, these plants didn't produce anything significant in the first quarter also, signifying a major disaster for generating companies with government involvement.

The Impact of Gas Shortages on Electricity Generation

The implications of this gas crisis are profound and multi-faceted, significantly affecting the ability of Independent Power Producers (IPPs) to function effectively.

In Q2 2024, the average PAF for all grid-connected plants was only 32.30%, indicating that more than 67% of the installed capacity in the Nigerian Electricity Supply Industry was unavailable.

This situation translates into substantial economic losses, power supply instability, and an increased reliance on inefficient and often more expensive sources of electricity generation, such as diesel.

1. Reduced Capacity and Reliability

The failure of key power plants to generate electricity not only disrupts the supply of power but also undermines the reliability of the entire electricity grid. When IPPs cannot access the gas they need, their ability to meet consumer demand diminishes significantly. The loss of 2,000 megawatts of capacity due to the shutdown of these plants exacerbates the existing shortfall in electricity supply, leading to prolonged outages and erratic power delivery to homes and businesses.

2. Economic Consequences

The inability of IPPs to operate due to gas shortages has far-reaching economic implications.

Industries reliant on stable electricity supply experience productivity losses, leading to diminished economic output and potential job losses. In an economy already grappling with various challenges, including inflation and high unemployment rates, the impact of inadequate power supply further hampers economic growth and deters foreign investment.

3. Increased Costs for Consumers

As gas shortages ground the ability of IPPs to function, the reliance on alternative power sources, such as diesel generators, increases.

This shift not only raises operational costs for businesses but also translates to higher electricity prices for consumers. Many households and small businesses, unable to afford the skyrocketing costs of alternative power sources, face significant financial strain.

4. Neglected Infrastructure and Maintenance

The ongoing gas crisis also affects the maintenance and operation of existing power infrastructure. When IPPs face continuous gas shortages, they are often forced to cut back on maintenance activities, which can lead to further inefficiencies and increased downtime. A vicious cycle ensues, where the inability to generate power leads to neglected infrastructure, ultimately exacerbating the energy crisis.

Comparing the Oil and Gas Sectors

To better understand the challenges facing the gas sector, it is useful to compare it with the more established oil sector.

Legal Framework and Compliance

One of the most significant gaps between the oil and gas sectors lies in the legal framework supporting domestic obligations. The oil sector benefits from a statutory structure that enforces domestic crude obligations, ensuring that a certain percentage of crude oil is reserved for local refining and consumption. This legal backing empowers regulatory bodies to enforce compliance among oil producers, creating a more predictable supply for the domestic market.

In contrast, the gas sector operates without similar legislative reinforcement. Although Nigeria's gas policy encourages investment in gas infrastructure and promotes domestic consumption, it lacks the legal teeth necessary to enforce compliance. This disparity leaves the growth and stability of the gas sector largely at the discretion of producers, who often prioritize export markets for higher returns.

Infrastructure Development

The oil sector has historically received more attention and investment in infrastructure development, resulting in a more robust network for transportation and refining. In comparison, the gas sector has lagged, with inadequate processing and transportation infrastructure limiting domestic supply. While some indigenous producers are making strides in infrastructure development, significant gaps remain, particularly in the northern regions, where gas supply is most critical for electricity generation.

Market Dynamics

The dynamics of the oil market also differ significantly from those of the gas market. Oil prices are more stable, and the demand for crude oil remains consistently high. Conversely, the gas market is often subject to fluctuations in global prices and demand, affecting the willingness of producers to allocate gas for domestic consumption. Many gas producers in Nigeria prioritize export markets due to the higher prices available, leading to chronic shortages in the domestic market.

Monitoring and Accountability

In the oil sector, there are established mechanisms for monitoring production and ensuring accountability among producers. The Nigerian National Petroleum Corporation (NNPC) and other regulatory bodies play crucial roles in overseeing oil production and distribution. The gas sector, however, lacks a dedicated entity to monitor compliance with gas supply agreements and domestic obligations, resulting in a lack of transparency and accountability.

Proposal for a Dedicated Agency

To tackle the gas shortage and ensure reliable electricity generation, I propose the establishment of a dedicated agency for gas development in Nigeria.

This agency would serve several critical functions:

1. Coordinating Domestic Gas Allocation

The agency would oversee the allocation of gas for domestic use, ensuring that gas producers prioritize supply to the electricity sector and other critical industries. By implementing and enforcing domestic gas obligations, the agency could create a more predictable and stable gas supply for power generation.

2. Enhancing Infrastructure Development

A dedicated agency could facilitate investment in gas infrastructure by working with stakeholders to identify and prioritize projects that will enhance gas processing, transportation, and distribution. By streamlining regulatory processes and promoting public-private partnerships, the agency could expedite infrastructure development to address current shortfalls.

3. Promoting Compliance and Monitoring

The establishment of this agency would enable better monitoring of gas production and distribution to ensure compliance with domestic gas supply agreements. Regular audits and reporting could provide insights into supply levels and highlight areas requiring intervention, ultimately promoting accountability among gas producers.

4. Driving Policy Implementation

The agency would have the authority to drive the implementation of the National Gas Policy, ensuring that the goals of increased domestic consumption and infrastructure development are met. It could also advocate for the necessary legal frameworks and policies to support gas production and distribution.

5. Facilitating Research and Development

A dedicated agency could encourage research and development in gas technologies, alternative energy sources, and efficiency improvements in gas utilization. By fostering innovation, Nigeria could enhance its energy sector's resilience and sustainability.

The gas problem in Nigeria's electricity sector is a multifaceted challenge that requires a comprehensive and coordinated response.

The ongoing gas shortages severely hinder the ability of Independent Power Producers (IPPs) to function, undermining the reliability and stability of electricity supply across the nation. Establishing a dedicated agency for gas development would provide the strategic oversight necessary to address these ongoing challenges and promote a reliable electricity supply for all Nigerians.

With the right policies, legal backing, and infrastructure in place, Nigeria can harness its abundant gas resources to power its future and ensure a more stable and efficient energy sector.

Abdulrazaq Hamzat can be reached at discus4now@gmail.com

*Thebridge Podcast breaks the table*

Mekunu this, Mekunu that, everybody hides under Mekunu to get away with bad conduct.

But wait oo, who Is Mekunu?

The Bridge Podcast breaks the table.

Enjoy


https://www.youtube.com/watch?v=SQ2MyWuzNSA?si=UDjrIdITNlp24hcP

More

More pictures

Kwara govt concludes 6-week summer coding boot camp, celebrates participants

The Kwara State Free Summer Coding and Digital Literacy Boot Camp (2024 edition) came to an end on Wednesday, with Governor AbdulRahman AbdulRazaq restating his administration's commitment to talent discovery and investment in youth development.

The programme was organized by the office of the Special Assistant on Digital Innovations, Hon Kayode Ishola, and had taken place during the school holiday in 6 different centres across the state.

These centers include Ansarul Islam School, Gure, and Etsu Maman Junior School, Gure both in Baruten LGA; Queen Elizabeth School, Ilorin (Ilorin West); Government Secondary School Afon (Asa); Offa Grammar School, Offa (Offa) and Government Secondary School Omu-Aran in Irepodun LGA respectively.

At the closing ceremony in Ilorin, Governor AbdulRazaq expressed his joy and satisfaction with what he called a brilliant performance by the participants, especially during the exhibition stage.

He said the session further signals there is hope for a better future of Nigeria especially in the digital space.

"This is the first free digital coding programme for the students to display their talent like this, it is really amazing and I must commend the office of the Special Assistant on Digital Innovation for this laudable initiative", The Governor said.
through the Commissioner for Education and Human Capital Development Hajia Sa'adatu Modibbo Kawu, who represented him.

He said his administration will continue to create an enabling environment for youth development and talent discovery with a view to producing youth with global citizenship.

The ceremony featured prize presentations for the outstanding students and colourful exhibitions by the participants on google template, software development, budget planner, and traffic light system built from scratch, among other programmes.

Dignitaries at the event included a member of Kwara State House of Assembly, Hon Rukayat Motunrayo Shittu; Commissioner for Water Resources, Hon Usman Lade; Commissioner for Environment, Hon Nafisat Buge; Special Adviser on Education, Dr Adetola Salahu; Special Assistant to the Governor on Humanitarian Affairs, Hon Abdulateef Adebara; dozens of students and teachers as well as parents of the participants.

Dr Adetola, for her part, described the programme as a laudable initiative aimed at promoting youth development in the digital space.

She urged the participants to make good use of the knowledge they have gained during the coding class.

Hon Kayode Ishola, in his remarks, said the programme showcases the immense potential of the youth and the boundless opportunities that digital literacy and technology can unlock.

"In a world where the language of innovation is code, and where the future is shaped by technology, we must equip our young people with the tools they need to compete on a global scale,” he said.

"The importance of digital skills acquisition cannot be overstated. It is the foundation upon which the future of work, communication, and creativity will be built. By providing our youth with the skills to innovate, create, and problem-solve, we are preparing them not only for careers in technology but also for leadership in every sector of society."

He commended the visionary leadership of Governor AbdulRahman AbdulRazaq, who he said is committed to building a Kwara that is powered by innovation and technology.

He also appreciated the contributions and support of various MDAs, organizations, partners, and individuals who made immense contributions to the success of the programme.

"This administration recognizes that the future belongs to those who can harness the power of technology, and it is laying the groundwork for a state where young people are not just consumers of technology but creators and innovators,” he said.

“Under the leadership of Governor AbdulRazaq, Kwara is fast becoming a state where our students, even at the secondary school level, are being empowered with digital skills that will enable them to compete favourably with their peers across the globe."

The keynote speakers, Prof Abiodun Musa Aibinu, who is the Vice Chancellor, Summit University, Offa and Co-founder CyBlack, Dr Iretioluwa Akerele, in their separate submissions, stressed the need for youth to harness the digital space in order to become global citizens.


Mashood, Abdulrafiu Agboola
Deputy Chief Press Secretary
Government House Ilorin
September 19, 2024.

*PeacePro rejects US proposal on second class UNSC permanent members*

Says superficial reforms not acceptable

A peacebuilding think tank, Foundation for Peace Professionals also known as PeacePro has rejected the United State proposal for creating second-class permanent members on the United Nations Security Council (UNSC).

PeacePro argues that, granting permanent membership to new members at the Security Council without veto power would represent a superficial reform and fail to address the deeper structural inequalities at the heart of the council’s makeup

In a statement by the Executive Director of PeacePro, Mr Abdulrazaq Hamzat, the group said that the US proposal suggesting to create second class permanent seats for African countries and others is counterproductive to the essence of the proposed UN reforms.

Hamzat argues that, this proposal does not address the underlying issues of inequality and lack of representation on the council.

The UNSC has been criticized for its outdated structure, with the five permanent members (China, France, Russia, the United Kingdom, and the United States) holding significant power and veto rights.

Reform proposals have been ongoing since 1993, with various models suggested, including Kofi Annan's reform models, the Group of Four (G4) proposal, and the Ezulwini Consensus.

The US proposal is outrightly inconsequential, because it is devoid of complete empowerment, suggesting that the proposal is akin to offering a "ram" without providing the "rope" necessary to lead it.

"The United States must learn from an African proverb that says that when you give a person a ram, you must release it along with the rope" he said.

PeacePro calls for a more comprehensive and genuine reform that addresses the core issues of representation and equality on the global stage.

MEEVEET:
Based on what exactly?

Good question

The state of UN reforms

All the permanent members of the UN has agreed to a reform in the UN.

All the permanent members have agreed to have 2 permanent members from Africa, in addition to India, Japan and Germany.

It's strange that 2 African States would be allowed 2 join UN permanent members, without any specific names.

This means that the lobby of Nigeria or any African country didn't materialize, instead Africa was considered as a whole, not on a state basis.

This is likely to lead to other issues and inter state dispute within the continent about which countries to take it, with possibility of foreign nations pitching us against each other.

Furthermore, the most absurd thing about this so called new permanent members is that, United States is proposing that the new permanent members don't get veto power, instead they should just be permanent members in names only.

The question would then be that, should all permanent members, including US be stripped of the veto power or all permanent members, including new members be given veto power?

Abdulrazaq Hamzat

My view on Ogun state energy act

Ogun state is about to become the first state to truly operate a truly free market energy sector.

I was part of the stakeholders engagement few months ago when they made consultation on the bill and unlike many states that are just domesticating the energy act 2023 and other similar laws, ogun state initiated something different, truly innovative, rightly explorative and certainly free.

Although, some states have taken the lead in taking over their state energy regulation from NERC, but I can say for sure that most states will simply replicate the inefficiency of the centralized operations.

However, If any state will be truly effective and revolutionize the sector in their state, that would be ogun state.

Lagos state also has the tendency to mirror Ogun state approach because some of the resource persons working in ogun state are also from Lagos and both state already has huge investment in the sector and the market is already there, unlike a state like Kwara that would have to start from scratch.

Abdulrazaq Hamzat

*Few people are dying in Nigeria*

It's very common to hear people lament about the death rate in Nigeria.

But how true is this lamentation?

You people should stop over rating death.

Out of every 1000 people in Nigeria, only 11 die per year.

This is why at independence, Nigeria has a little over 40m population, but now has almost 220m.

Yet everyone keep saying people are dying.

We exaggerate things too much.

Even in UK, which has more population than Nigeria in 1960 (52m), their current population is less than 70m, 30% increment, yet we have about 220m, which is more than 400% growth rate.

Same with US, which has about 180m population in 1960 and has less than 350m today, that's about 90% growth rate.

Even South Africa, which has about 18m population in 1960 has 60m today, that's less than 300% growth rate.


Literally, there's very few country on earth, where less people are dying than Nigeria.

Actually, we are amongst the top 20 countries in the world with least death

Abdulrazaq Hamzat