Breaking: Nigerians To Buy Petrol N750/Litre As President Tinubu Removes Fuel Subsidy

President, Bola Ahmed Tinubu on Monday, May 29, 2023, said the era of subsidy payment on fuel has ended.

Aro Okeigbo Blog understands that President Tinubu noted the 2023 Budget made no provision for fuel subsidy and more so, subsidy payment is no longer justifiable.

“The fuel subsidy is gone,” Tinubu declared in his inaugural speech at Eagles Square on Monday after he was sworn in as Nigeria’s 16th President.

Tinubu said his government will rather channel funds into infrastructure and other areas to strengthen the economy, adding that a “unified exchange rate” is guaranteed under his administration.

Meanwhile, Aro Okeigbo Blog has earlier reported that the stakeholders in the downstream sector of the Nigerian oil and gas industry have told Nigerians to be ready to pay as much as N750 per litre of petrol at filling stations.

This was the highpoint of stakeholders’ interventions during an online workshop, with the theme, “Deregulation of the Nigerian Downstream Sector: The Day After.”

The workshop was organised by industry stakeholders, in collaboration with the African Refiners and Distributors Association (ARDA).

The downstream players, in conjunction with economic policy analysts and relevant government agencies, also outlined strategies and measures that should be deployed to ensure sustainable removal of petrol subsidy.

It emerged, yesterday, also, that Nigeria was struggling to find buyers for its crude oil, as strikes in the French refining sector and seasonal maintenance at plants elsewhere in Europe cut into the Organisation of Petroleum Exporting Countries (OPEC) producer’s sales.

In another development, former Chief of Policy and Plans, Nigerian Navy, Rear Admiral Henry Babalola (rtd), called on the federal government to prosecute persons involved in oil theft for treason. Babalola expressed disappointment with the government’s poor handling of the oil theft issue. He said government was not doing enough to eradicate the menace destroying the country’s revenue base.

Akelicious recalls that the federal government, through the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, recently hinted that it would end the wasteful petrol subsidy regime before the end of President Muhammadu Buhari’s tenure on May 29, 2023.

But, in their separate interventions during the online workshop, stakeholders emphasised the need for the government to address the challenges facing the sector.

Participants at the workshop included representatives of the ARDA, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), and Independent Petroleum Marketers Association of Nigeria (IPMAN).

Others were NNPC Retail Limited (NRL), Petroleum Retail Outlets Owners Association of Nigeria (PETROAN), Federal Competition and Consumer Protection Commission (FCCPC), PricewaterhouseCoopers (PwC), and CITAC Africa, among others.

Speaking at the session, National President of IPMAN, Mr. Chinedu Okoronkwo, who was represented by IPMAN’s National Operations Controller, Mr. Mike Osatuyi, revealed that the marketers were in full support of the government’s plan to embark on full deregulation of the downstream sector.

Okoronkwo warned Nigerians to prepare to pay up to N750 for every litre of petrol after the full implementation of the subsidy removal. He however, pointed out that the projected pump price was likely to drop to around N500 if the government encouraged the Central Bank of Nigeria (CBN) to provide foreign exchange for marketers at the official rate.

Okoronkwo also urged the government to channel expected savings from subsidy removal to provision of palliatives for the masses. He advised the government to be alert and sensitive to resentment from Nigerians.

The industry stakeholders at the workshop called on the government to implement appropriate palliatives in the form of public transportation and freight of agricultural produce, ensure transparent and effective communication, and improve access to foreign exchange. They also urged the government to address issues around trade finance, guarantee strategic stock, and provide access to crude oil for refineries ahead of the plan to embark on the total removal of petrol subsidy.

They stressed the need for operators in the industry to institutionalise professionalism in the midstream and downstream petroleum sectors ahead of the take-off of full deregulation.

In his goodwill message, Chief Executive Officer, NMDPRA, Mr. Farouk Ahmed, told industry players that the authority would allow a free market-pricing regime to prevail in the petroleum marketing business in the country once the sector was fully deregulated.

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National President of the Nigerian Association of Road Transport Owners (NARTO), Lawal Yusuf Othman, stated that the full deregulation of the downstream sector and complete removal of petrol subsidy would introduce a mix of opportunities and challenges into the operating environment.

In his presentation, Managing Director, CITAC Africa, Mr. Gary Still, explained that market liberalisation meant the removal of government subsidies and price controls on petroleum products and allowing market forces to determine the price and supply of petroleum products.

Still advised the Nigerian government to completely deregulate the downstream oil sector and free the market from the existing price fixing and control to allow investments to flow into the sector.

Fiscal Policy Partner and Africa Tax Leader at PwC, Mr. Taiwo Oyedele, charged the government and the regulators to identify potential pitfalls that could trigger resentment from citizens before, during, and after the removal of the petrol subsidy.

Oyedele said deliberate public sensitisation, industry engagement, and collaboration with civil society organisations were needed to aid public buy-in during the implementation of full deregulation by the government. He added that in the course of implementation of the policies, the government’s interpretation of its strategy must be issues-based and not confrontational.

Technical Consultant to the Executive Vice Chairman/Chief Executive Officer of FCCPC, Mrs. Morayo Adisa, in her presentation, emphasised the need for the industry regulator to establish quality and safety standards for petroleum products, including fuel quality standards, safety regulations for storage and transportation, and environmental regulations.

Chairman of MOMAN and Managing Director of Ardova Plc, Mr. Olumide Adeosun, stressed that the virtual workshop was aimed at addressing key challenges and outlining strategies to ensure a sustainable future for the petroleum downstream sector. Adeosun added that safeguarding consumer interest in a deregulated environment was also underscored.

The workshop offered the industry regulator and all players across the midstream and downstream value chain the opportunity to deliberate on measures that needed to be put in place ahead of the full implementation of the Petroleum Industry Act (PIA) 2021.

The workshop provided data-driven insights into the sector’s growth potential, as stakeholders emphasised the need for continuous industry engagement, collaboration, and public sensitisation to aid public buy-in on new policies by the government.

It emphasised the importance of connecting to regional markets, positioning Nigeria as the regional refining hub, and fostering relationships with international service providers, including rating agencies, finance and governance institutions, and aligning with the goals of the Conference of the Parties to the United Nations Convention on Climate Change (COP).

Ultimately, the collaborative workshop provided a platform for stakeholders to share knowledge and develop strategies to ensure the Nigerian Petroleum Downstream Industry remained a strong, competitive force, while transitioning to a more sustainable future.

25 Nigerian Crude Shipments Struggle to Find Buyers in Europe as French Strike Continues

Nigeria is struggling to find buyers for its crude oil as strikes in the French refining sector and seasonal maintenance at plants in Europe cut into the OPEC producer’s sales.

Between 20 and 25 shipments of Nigerian crude for April loading were still searching for buyers, according to four traders specialising in the West African market. That was a much weaker position than normal for this time of the month — when trade should be moving on to May’s barrels — and the prices the shipments could fetch were dropping, they said. Each cargo was about a million barrels of crude, Bloomberg reported.

Typically, one of Nigeria’s biggest buyers, France, took an average of 110,000 barrels a day of Nigeria’s oil over the past year, according to tanker-tracking data compiled by the medium.

But that demand shrivelled this month, with France’s overall crude imports dropping by half in March as the nationwide dispute over pension reforms escalated, according to Wood MacKenzie.

Well over 80 per cent of France’s 1.1 million-barrels-a-day processing capacity is halted or in the process of shutting down because of the industrial action, data compiled by Bloomberg show.

In addition to the impact of the strikes, other plants in Europe are also buying less crude because of seasonal maintenance, according to the traders.
Capacity is offline at some typical destinations for Nigerian crude, such as Spain’s San Roque refinery and Italy’s Sarroch plant, Bloomberg said. Facilities that have halted capacity for work also include Shell’s Pernis refinery near Rotterdam, Europe’s biggest plant.

“The Nigerian backlog is a combination of higher freight costs, lower tanker availability — specifically into Europe — as well as lower overall demand for West Africa light sweet as crude from other regions is deluging markets,” said Viktor Katona, lead crude analyst at Kpler.

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Northwest Europe’s reduced buying matters for West Africa because alternative outlets are limited, traders said.

Mediterranean refiners can choose to skip Nigerian supply in favour of cheap North African barrels that ship more quickly to the region, or they can process some of the large volumes of US West Texas Intermediate crude that have been arriving in Europe in recent months, the report said.

Long-haul buyers, like Indian Oil and Indonesia’s Pertamina, have been taking more discounted Russian volumes this year, easing their need for Nigerian supply. China’s UNIPEC favours processing oil from Angola, where only around five April shipments are still available, the traders said.

Another driver of the unsold glut has been Nigeria’s revival of crude production that was shuttered in recent months by theft and technical issues, such as the nation’s Bonny Light stream.

Nigerian export capacity may now exceed what the market needs in April and May, according to Katona, as more oil tankers have diverted away from France and strikes disrupt the country’s petroleum industry.

Crude oil carriers, Primero and Elisabeth Maersk, had both been anchored off Le Havre until Wednesday, before changing their destination to Rotterdam, according to ship tracking data compiled by Bloomberg. That was on top of several refined fuel carriers that moved away from the French port recently to go elsewhere.

The effects of French strikes to protest against pension reform are rippling across global oil markets. The nation is estimated to see a hit of about 500,000 barrels a day to the amount of crude that gets turned into fuels in March.

France released strategic stockpiles of oil products this month to avoid fuel shortages as the strikes blocked fuel movements from many local refineries.
French transport networks, oil refineries and schools have been hit by widespread disruption, as workers staged a national strike to protest an increase in the retirement age that was pushed through parliament without a vote.

Sporadic demonstrations had popped up in Paris and other cities after the French government forced the bill through last week, being the ninth day of strikes since the bill was introduced in January.

Only two out of 14 metro lines in Paris now operate a normal service even as the nationwide strike has also affected air traffic, with 30 per cent of flights impacted at Paris Orly airport.

Unionised workers blockaded a major oil refinery in Normandy and another one in Fos-sur-Mer in the south of France, according to a government spokesperson.
“We are intervening in a targeted manner to unblock oil storage tanks that are blocked by demonstrators,” the Minister of Energy Transition, Agnès Pannier-Runacherin, said in a statement.

“If the strike is a fundamental constitutional right, blockading is not one… The police is mobilised in difficult conditions and has my full support,” the statement said.

The government’s plan to raise the retirement age for most workers by two years was opposed by huge numbers of people. But despite protests that drew more than a million people onto streets across the country, President Emmanuel Macron’s government did not back down.

It rammed the legislation through the French National Assembly last week using a constitutional clause that allows the government to bypass a vote.
The country’s generous pension system and early retirement have been a point of pride since they were enacted after World War II. Under the new law, the retirement age for most workers will be 64, still one of the lowest in the industrialised world.

The 25 million barrels of crude oil, which are seeking buyers in Europe, are more than half of the country’s production that was roughly 40 million barrels in February.

Try Oil Thieves for Treason, Ex-Naval Policy Chief Urges FG

Babalola called on the federal government to try criminals involved in oil theft for treason.

Speaking at a seminar organised by the Defence Correspondents Association of Nigeria (DECAN), with the theme, “Achieving Presidential Mandate in Curbing Oil Theft and Securing the Nation’s Wealth,” in Abuja, Babalola recommended that those caught stealing the country’s crude should be charged with treason. He called on the government to identify the supply chain of oil theft and the individuals involved, and bring the culprits to justice.

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He said, “It is high time the government treated the menace with urgency. Oil theft will destroy the nation’s economy should the government fail to act fast.”
In his remarks, Minister of State for Petroleum Resources, Timipre Sylva, said the order given by President Muhammadu Buhari on the eradication of oil theft was yielding result.

Sylva stated, “Before that directive, oil production went down to 900, 000 barrels per day, but today it is gradually picking up and oscillating between 1.5 million and 1.6 million barrels per day.”

Represented by his aide, Horatius Egua, Sylva said the problems confronting the oil and gas industry were caused by years of neglect by past administrations.
He said, “The oil and gas industry is the most complex sector in this country. That is why some allege that in the sector, the more you look, the less you see. However, in the last 12 months, the order by the president to end oil theft in the country is beginning to yield results.

“Apart from stealing, past governments did not invest in infrastructure in the oil and gas sector for a very long time. You find pipelines rupturing.
“We could not get what we wanted, but this administration has done much to restore infrastructure.

“The president directed that the refineries must work and as it is presently, the Port Harcourt refinery is at 65-70 per cent. Hopefully, before the end of the second quarter of the year, I believe something will come out of that refinery.”

In his remarks, Permanent Secretary, Ministry of Defence, Dr. Ibrahim Kana, disclosed that the country’s effort to achieve the presidential mandate handed to the ministry was successful due to the adaptation of synergy among the tri-services, especially in planning, coordination, and implementation of actionable programmes and projects.

Kana, who was represented by Director, Army, in the ministry, Mr. Sunday Attah, said, “No doubt, the Nigerian Armed Forces and agencies of the ministry now enjoy wider public support and understanding, which have resulted in positive attitudinal change among Nigerians.

“Nigerians are now very familiar with the efforts of President Muhammadu Buhari in securing the country and guaranteeing the safety of Nigerians against banditry, kidnapping and terrorism.”

The permanent secretary commended Buhari for the special attention accorded the ministry in providing for the needs of the armed forces of Nigeria, promptly, and the guidance in the discharge of “our constitutional responsibilities.”

He stated, “Mr. President has ensured that the tri-services are rebranded with modern equipment as well as military and civilian personnel are being trained and retrained regularly, to enhance proficiency and efficiency in service delivery.

“Wellbeing and welfare of personnel by the federal government have continued to provide ideal accommodation for the comfort of soldiers and their families.”

Kana stated that recently, the ministry commenced the upgrading of primary and secondary schools, in addition to ensuring security and safety of teachers, pupils and the school environment.

He said, “On this matter of oil theft before us as a nation, I call on all hands to be on deck, especially the media, in the fight against this deadly menace.

“It is necessary to remind you that the expectations of Nigerians on the media is high and as such, you must live up to that expectation. Every story must be accurate, verifiable, credible and, most importantly, be relayed with high sense of patriotism and professionalism.”

At the event, Chief of Defence Staff, General Lucky Irabor, was represented by Chief of Training and Operations at Defence Headquarters, Major General Solomon Udounwa.

Chief of Naval Staff, Vice Admiral Awwal Gambo, was represented by Director of Operations, Nigerian Navy, Rear Admiral OK Oluwagbire,.

In attendance also were Director of Defence Media Operations, Major General Musa Danmadami, and Director, Naval Information, Commodore Ayo-Vaughan.

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