FG not responsible for hike in petrol price — Minister
..Says sector is deregulated
…We are not at our full market price of petrol yet — NNPC VP
…ACCI warns of looming economic crises
…As Atiku calls for enhanced support for private sector, commends Dangote Refinery
By Seun Ibiyemi
The Federal Government through the Minister of State (Oil) Petroleum Resources, Sen. Heineken Lokpobiri has said that the government is not responsible for the increase in pump price of Premium Motor Spirit (PMS) by Nigerian National Petroleum Company Limited (NNPC Ltd).
This even as he attributes hike in petrol price to deregulation in the sector.
The Minister said this while briefing State House correspondents after a meeting with Vice-President Kashim Shettima on Thursday.
Lokpobiri said the industry had been deregulated, and that the government was not fixing prices.
“This sector is deregulated. And we believe that with the availability of products, the price will find its level.
“What is important is that the product is available in the country; between now and the weekend, there will be availability of the product across the length and breadth of the country,” he said.
He said it was important to convey to Nigerians that the President was empathetic about what was going on in the country.
“He is concerned about the hardship of Nigerians, and that was why he directed the Vice President to call this meeting, for us to reflect on what is going on in the country.
“But, we believe that by the time there is availability of the product across the country, the price itself will stabilise,” said the minister.
Lokpobiri said Shettima had summoned him along with the Group Managing Director of Nigerian National Petroleum Company Limited (NNPC Ltd), Mele Kyari, and the National Security Adviser, Malam Nuhu Ribadu, over the recent hike in the price of petrol.
Also, Executive Director, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr Ogbugo Ukoha, said regulatory efforts were geared toward stabilising supply of petrol in the country, which he said would impact positively on stability of price.
“The objective of the regulator is to ensure that there’s increased operating hours from all loading depots; vessels are being cleared promptly and extended hours where safety can permit truck outs as well.
“More importantly also is the reinforcement of the support being given to local refinancing, because with increased production there will be higher supply, which will stabilise the price,” said Okuoha.
It would be recalled that the price of petrol was increased from N855 to N897 per litre, depending on the location, from the previous N568-N617.
…We are not at our full market price of petrol yet — NNPC VP
The Vice President, Downstream at the Nigerian National Petroleum Company, Adedapo Segun has stated that the current pump price of petrol is not market reflective and could be higher.
He stated this during an interview on Arise Tv monitored by Nigerian NewsDirect, where he explained the problems the company is facing with regards to petrol supply.
According to him, despite the increase in petrol prices from N617 per litre to N897, it does not reflect free market conditions.
He said, “You will recall that I said earlier that in the summer months prices are high and as we move towards the winter months, prices drop. So you expect to see prices drop in those climes where petrol prices are market based but the opposite is our situation.
“We are not at our full market pricing of PMS yet and that is why the behaviour of PMS prices in Nigeria cannot be compared to those markets where the prices are fully market based. And if you are going to do a comparison, you’ll check out the equivalent of those prices you see in those climes and compare them to the prices here and you’ll see they are way higher than the prices we are offering when you bring them to a common currency.”
Furthermore. Adedapo Segun noted that the Petroleum Industry Act (PIA) provides for a free-market petrol pricing system where different players can source the product and sell at market-based prices which he noted will bring competition to the industry and quality services to Nigerians.
He also stated that the exchange rate was impeding on the operations of the NNPC Ltd with the company experiencing challenges with foreign exchange liquidity but assured that the current petrol scarcity will fizzle out in the next few days.
On the NNPC Ltd debt to international market suppliers, the Vice President downstream stated that the company has never defaulted on its debt in the past and has the confidence of marketers in the industry.
…NNPC to supply Dangote refinery 17.6m barrels of crude oil in Sept, Oct
The Nigeria National Petroleum Company Ltd (NNPC Ltd) has stated that it will supply the Dangote refinery a total of 17.6 million barrels of crude oil between September and October this year.
The Executive Vice President of the NNPC, Mr. Adedapo Segun stated this in an interview on Arise TV monitored by Nigerian NewsDirect.
He stated that the federal government together with the NNPC were working to ensure supply of crude oil to the Dangote refinery and ensuring that the ongoing petrol scarcity in the country is resolved soonest.
According to him, “NNPC has been collaborating with private refineries, including Dangote, to guarantee a consistent supply of crude oil for refining.”
He said, “We’ve provided over 30 million barrels of crude oil to Dangote refinery so far and this month alone we will be providing 6.3 million barrels of crude oil to Dangote refinery in seven cargoes and in October we will be providing another 11.3 million barrels of crude oil to Dangote refinery in 13 cargoes. So we are doing everything we can to make sure this situation abates as soon as possible.”
He further explained that multiple issues are contributing to the fuel scarcity situation, noting that while the fuel queues may come and go, a permanent solution requires ideal market conditions and sufficient foreign exchange liquidity.
Additionally, he also mentioned that even with the Dangote refinery in Nigeria and the government’s facilitation of crude purchases in Naira, NNPC is playing a supportive role in addressing the issue.
Recall that Dangote refinery has since the beginning of the year been having a running battle with international oil companies in Nigeria making the refinery resort to import crude oil despite Nigeria being the biggest producer of oil in Africa.
However, last month the Federal Executive Council (FEC) chaired by President Tinubu approved the sale of crude oil to the Dangote refinery and other refineries in the country in Naira to mitigate against the effect of FX liquidity on supply.
Earlier in the year, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) had mandated crude oil producers in the country that in line with the provisions of the Petroleum Industry Act (PIA), they are meant to allocate specific quantities of crude oil to meet local refineries in the country.
The Federal Executive Council’s decision to sell crude oil to Dangote Refinery and other local refineries in Naira carries several significant implications for Nigerians: The initiative is expected to stabilise pump prices, potentially resulting in lower and more consistent fuel costs for consumers.
Additionally, conducting transactions in Naira rather than dollars could ease pressure on foreign exchange reserves, contributing to the stabilisation of the Naira-dollar exchange rate and helping to control inflation.
…ACCI warns of looming economic crises
Meanwhile, the Abuja Chamber of Commerce and Industry (ACCI) has warned that the recent increase in fuel prices in the country can lead to severe economic crises.
The ACCI President, Emeka Obegolu, said this in an interview in Abuja on Thursday.
Obegolu said the price hike could have widespread repercussions, particularly on the business community, which was already grappling with inflationary pressures and high exchange rates.
According to him, the increase in fuel prices directly exacerbates the cost of operations for businesses across all sectors.
He said, “As fuel is a critical input in production and transportation, the price spike will lead to a corresponding rise in operational expenses.
“This escalation inevitably will result in higher prices for goods and services, which diminishes consumer purchasing power and reduces demand,” he said.
The ACCI boss emphasised the vulnerability of Small and Medium Enterprises (SMEs), which formed the backbone of the Nigerian economy.
Obegolu said that businesses already operating on narrow margins, were especially susceptible to the adverse effects of the rising costs and had limited capacity to absorb such shocks.
“We also anticipate potential disruptions in the supply chain due to increased transportation costs, which can further exacerbate the challenges businesses are currently facing.
“The fuel price increase was neither anticipated nor expected, especially as the nation is still reeling from the effects of a previous price hike.
“The recent unrest, culminating in a 10-day industrial strike tagged #EndBadGovernance saw business activities severely disrupted, with incidents of looting and property destruction adding to the woes of the business community,” he said.
Obegolu called on the Federal Government to take immediate action by reversing the fuel price hike and reducing living costs rather than imposing additional financial burdens on Nigerians.
He pointed out that businesses struggling to survive may be forced to shut down, while those already closed might find it impossible to recover without government intervention.
Obegolu cited a recent roundtable organised by the ACCI on “Implementing an Effective Price Control System in Nigeria.”
He said stakeholders at the meeting, including government officials, policymakers and industry experts, discussed the need for a robust regulatory framework to address the rising cost of goods and services.
He said the discussions reiterated the importance of price control in stabilising the economy and protecting consumers.
The ACCI boss cautioned that the recent fuel price hike could further aggravate Nigeria’s economic situation.
The chamber urged the government to prioritise the construction of modular refineries, which would reduce the nation’s reliance on imported refined petroleum products and foster a more sustainable economic environment.
Obegolu then restated ACCI’s commitment to continually advocate for policies that could create a conducive business environment and promote long-term economic growth in Nigeria.
…As Atiku commends Dangote Refinery’s launch, calls for enhanced support for private sector
Meanwhile, Atiku Abubakar has praised Alhaji Aliko Dangote on the commencement of petrol production at the Dangote Refinery, highlighting it as a significant achievement for both Dangote and Nigeria. In a recent statement, Abubakar congratulated Dangote for his perseverance and commitment to the nation.
“Let me congratulate and appreciate the efforts of Alhaji Aliko Dangote, as the Dangote Refinery begins production of PMS. It demonstrates his tenacity and ‘can do’ spirit and his belief in his fatherland,” Abubakar stated.
He underscored that this milestone is not only a testament to Dangote’s business acumen but also a reflection of what corporate Nigeria can contribute to the nation’s economic recovery. “This remarkable accomplishment is beyond a demonstration of the business acumen of just one man. It is also a manifestation of what corporate Nigeria can do to recover the Nigerian economy and make it strong, dynamic, and resilient,” Abubakar added.
Abubakar reiterated his vision for a robust private sector role in Nigeria’s economy, emphasising the need for strong private sector involvement in strategic areas.
“This resonates with my dream of having an enlarged private sector presence in the Nigerian economy. I am an unrepentant advocate for a strong and visible participation of the private sector in strategic sectors of the economy, either alone or in partnership with the state,” he said.
Addressing the challenges faced by the private sector, Abubakar highlighted the need for more supportive government regulations.
“Nigerians are aware of the many obstacles Aliko had to overcome to achieve this win. If the private sector must step forward to invest, create jobs, and drive growth, the government must roll out more supportive regulations and deliver them efficiently,” he noted.
He criticised past government reforms for undermining private sector confidence, stating, “The worst damage done by the APC-led government since 2015 is to unleash difficult-to-implement-and-sustain ‘reform’ initiatives that erode private sector confidence in our economy and drive investors away from our shores.”
Looking ahead, Abubakar expressed hope for continued private sector support in Nigeria’s journey toward energy self-sufficiency.
“There are a few major milestones ahead as Nigeria journeys toward attaining energy self-sufficiency. I hope Aliko will continue to lend his unwavering support on this journey,” he noted.
