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PMS consumption hits 80m litres daily

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The consumption of Premium Motor Spirit, popularly called petrol, has risen to about 80 million litres daily, pushing up subsidy on the commodity to an estimated N484billion monthly, going by latest figures from the Nigerian National Petroleum Company Limited.

An analysis of PMS weekly evacuation/dispatch data from March 4-10, 2023, obtained from NNPCL on Wednesday, indicated that a total of 558.83 million litres of petrol was evacuated during the period, translating to an average daily consumption of 79.83 million litres.

Around mid-last month, the Group Chief Executive, NNPCL, Mele Kyari, said about 66 million litres of petrol was pumped daily into the market by the oil firm, as the company was spending about N202 on every litre of PMS consumed across the country.

“Today, by law and the provisions of the Appropriation Act, there is a subsidy on the supply of petroleum products, particularly PMS imports into our country. In current data terms, three days ago, the landing cost was around N315/litre.

“Our customers are here; we are transferring to each of them at N113/litre. That means there is a difference of close to N202 for every litre of PMS we import into this country. In computation, N202 multiplied by 66.5 million litres, multiplied by 30 will give you over N400billion of subsidy every month,” the GCEO had stated.

Since January till date, the cost of crude oil has revolved around $83/barrel, while the official exchange rate has been about N460/$. Crude oil price and foreign exchange rate are the major determinants of refined petroleum products’ cost, according to operators.

Going by NNPCL’s latest fuel consumption figure of 79.83 million litres daily, and a subsidy of about N202/litre, it implies that the oil company would be spending an estimated N483.8billion to subsidise the commodity monthly.

NNPCL is the sole importer of petrol into Nigeria and has maintained this for several years. Other marketers of the commodity stopped its imports due to the difficulty in accessing foreign exchange required for PMS purchase.

NNPCL, however, has been lamenting the huge burden of PMS subsidy, as Kyari pointed out in February that this had been a drain on the cash-flow of the national oil firm.

He explained that the continuous funding of petrol subsidy by NNPCL had been ongoing without refunds from the Federal Ministry of Finance, Budget and National Planning, despite the fact that subsidy had been budgeted for in the Appropriation Act.

“But there is a budget provision for it (subsidy). Our country has decided to do this. So, we are happy to deliver this, but it is also a drain on our cash flow, and I must emphasize this.

“For as we continue to support this, you will agree with me that it will be extremely challenging for us to continue to fund this from the cash flow of the company when you do not get refunds from the Ministry of Finance,” Kyari had stated in Abuja.

Fuel subsidy is a topical issue in Nigeria. Many experts, local and international institutions have called for a halt in petrol subsidy. However, labour unions had kicked against an outright subsidy halt, on the grounds that the Federal Government must fix Nigeria’s refineries first.

Analysts at Centre for the Promotion of Private Enterprise recently explained that Nigeria would save about N10trillion annually by the elimination of subsidies on PMS and foreign exchange.

They said the country would save about N7trillion annually by halting subsidy on petrol, while an estimated N3trillion would be unlocked when the Central Bank of Nigeria (CBN) eventually halts subsidy on foreign exchange.

“Elimination of fuel subsidy to save an estimated N7trillion annually. Elimination of foreign exchange subsidy to unlock a minimum of N3trillion revenue annually from the sale of CBN forex to the official foreign exchange window,” the centre stated.

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Energy

How deployment of new technologies resolved three-year delay on OB3 project — Kyari

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The Group Chief Executive Officer, Nigerian National Petroleum Company Limited (NNPC Ltd), Mele Kolo Kyari has revealed how the deployment of new technologies has brought a breakthrough to the OB3 Gas pipeline project.

Speaking during an inspection tour of the OB3 pipeline River Niger Crossing operation at Aboh, Delta State, on Saturday, Kyari said the OB3 Gas pipeline is the inter-connector which links the Eastern gas pipeline network to the Escravos-Lagos Pipeline System (ELPS) in the West and the Ajaokuta-Kaduna-Kano (AKK) Pipeline in the North.

“The River Niger Crossing operation has been the major impediment to the completion of the strategic OB3 Gas Pipeline for over three years due to failure of the various technologies deployed to achieve the construction of the 48-inch pipe under the river bed between Ndoni in Rivers State and Aboh in Delta State,” He lamented.

He however noted that with the adoption of the Micro-Tunnelling/Direct Pipe Installation technology, the new contractors, Messrs HDD Thailand/Enikkom and Tunnelling Services Group (TSG), are making a headway with about 860meters out of the 1,800meters achieved so far.

Speaking after the inspection tour, Kyari expressed delight at the breakthrough, which signals the imminent completion of the project.

“This is a major project of monumental value to our country. What this means is that this is the only way we can deliver the gas revolution. I am very happy and convinced that, latest by the middle of August, we will complete this project. I have been assured of that by the project team,” Kyari stated.

On the significance of the project, he said, “Once completed, we will see about 2.2billion standard cubic feet of gas coming into our network. We believe that this will give our country a breathing space of demand, I am sure we can catch up with that kind of demand in the next one and half years. We are happy that this will give us the platform to unleash the gas revolution in our country.”

Also speaking on the project, the Minister of State for Petroleum Resources (Gas) Rt. Hon. Ekperikpe Ekpo, expressed satisfaction with the pace of work at the OB3 River Niger Crossing operation, describing it as “Renewed Hope at work.”

“I was here last year and I saw the work that was going on. There was a promise that it would be completed by December last year. I took it with a doubt. But today, from what I can see, I am confident that by July or August it will be completed and it will be commissioned by the President,” the Minister stated.

On her part, the Special Adviser to the President on Energy, Olu Verheijen, said she was looking forward to the completion of the project having been assured by the technical team that the right technology has been found to resolve the complex challenges of the River Niger Crossing.

“As the Minister and other speakers have said, we are looking forward to having this project deliver prosperity to Nigerians in the form of electricity and other areas,” Verheijen said.

The Managing Director of Tunnel Service Group (TSG), one of the contractors to the project, Mr. Ingo Justen, who is personally on ground to supervise the project on the request of the GCEO, expressed confidence that the current technology being applied in the execution of the project would lead to its speedy conclusion.

In a presentation earlier, the Managing Director of NNPC Gas Infrastructure Company (NGIC), Engr. Seyi Omotowa, disclosed that at the rate of progress with the new technology deployed, the River Niger Crossing operation, which is the only aspect of the OB3 Gas Pipeline Project left, will be achieved on schedule.

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Nigerian energy firm to build mega LPG Facility in Kenya

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Kenya is negotiating with a subsidiary of Nigeria’s Sahara Group Ltd. to jointly construct a 30,000-ton facility for handling and storing liquefied petroleum gas (LPG), according to sources familiar with the matter.

The deal involves state-owned Kenya Pipeline Co. forming a joint venture with Asharami Synergy Plc to construct a common user terminal, which will be East Africa’s largest LPG storage and bottling facility, in the port city of Mombasa, according to a Bloomberg report.

The facility, expected to take 24 months to build, will be financed by Asharami, one of the sources said, adding that the deal is anticipated to be signed by the end of July.

Kenya Pipeline Co. will provide the land for the project, located on the port side.

The project is expected to help the East African nation achieve universal access to clean cooking energy by 2030.

President William Ruto has been advocating for Kenya to become a leader in green energy in Africa.

As part of this initiative, he aims to double the current per capita usage of LPG, which stands at 7kg.

Kenya Pipeline Managing Director, Joe Sang, said that the country is also actively working to bring a private sector company on board for the new cooking-gas facility.

In a bid to enhance the LPG supply and lower fuel prices, Kenya is also negotiating with Saudi Aramco.

The discussions are focused on acquiring a floating LPG barge.

Sang said Kenya’s efforts to improve its energy infrastructure and support the President’s green energy goals.

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Shell reiterates commitment to Nigeria’s development, wins FRCN award

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Shell Petroleum Development Company of Nigeria Limited (SPDC) has reaffirmed its unwavering commitment to supporting the socio-economic development of Nigeria, especially in its areas of operations in the Niger Delta.

SPDC Director and Head of Corporate Relations, Igo Weli, made the restatement in Port Harcourt on Friday at a dinner to celebrate the 21st anniversary of Treasure FM, a member of the Federal Radio Corporation of Nigeria (FRCN) network.

“Our commitment stretches back to the 1950s, with a wide range of programmes supporting education, infrastructure, community electrification, and business empowerment,” Weli said.

A key highlight of the anniversary dinner was the presentation of the FRCN Award for Consistent Media Partner to Shell companies in Nigeria.

Weli, who was represented by the Shell Spokesman, Michael Adande, said, “This award serves as a strong reminder that Shell’s dedication to the socio-economic development of the Niger Delta region remains a cornerstone of our presence in Nigeria.”

The award recognises Shell’s partnership with FRCN, particularly its support for the weekly live programme Canvas: Niger Delta Roundtable, which fosters crucial discussions on development issues impacting the region.

“While the award itself was unexpected, it reinforces the value of initiatives like Canvas,” Weli added. “This recognition motivates us to keep promoting development, not just in our operational areas but across the entire nation.”

Since 2017, Canvas: Niger Delta Roundtable has aired twice weekly on different radio stations in the Niger Delta with live online streaming. These broadcasts dedicate an hour to exploring topics relevant to the development of the region and its people.

The General Manager, FRCN Treasure FM Port Harcourt, Fred Onyeka Nwaulune, commended Shell’s partnership.

“Shell has been a reliable media partner, consistently educating the Niger Delta region on the importance of dialogue for development and peaceful solutions,” he said. “Their programme aligns perfectly with FRCN’s focus on sustainable development.”

He noted that through the dialogue radio programme, Shell had demonstrated a continued focus on driving progress and positive change in the Niger Delta and beyond.

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