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Subsidy removal on PMS extremely difficult but inevitable — Adeosun



By Uthman Salami

The Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Mr Olumide Adeosun has said it is extremely difficult for that Federal Government to remove subsidy payment on Premium Motor Spirit (PMS), otherwise known as Petrol but economically viable continue the payment considering current economic realities.

While calling for massive investment by the government in mass transportation, healthcare and education, he said this measure will successfully cushion the effects of the removal on Nigerians.

This call by the Chairman of the Union was obtained on the Association’s website on Friday said its Chairman, Mr Olumide Adeosun, MOMAN, and made during  Association of Energy Correspondents of Nigeria (NAEC) Strategic International Conference that was held in Lagos.

Adeosun spoke on the topic: ‘Energy Transition, PIA, Petroleum Pricing and the Way Forward for the Downstream Sector.’

Represented by Mr Clement Isong, the Chief Executive Officer, MOMAN, Adeosun said it would remain extremely difficult to wean Nigerians off cheap PMS, also known as petrol.

He said, “It is something that must be done as there are no more viable options.

“We are told that this year the subsidy bill to the Federal Government may be between N5 trillion and N6 trillion. Clearly, Nigeria cannot afford this.

“To wean Nigeria off this subsidy, a lot of investment must be done to sensitise Nigerians in convincing them and finding alternatives.

“We need to begin to remove the subsidy and mitigate the pains Nigerians will feel when petroleum prices begin to manifest their true value.”

Adeosun said marketers were optimistic that the industry was headed in the right direction with the enactment of the Petroleum Industry Act (PIA) 2021 which was an excellent piece of legislation.

“We are now at the point of implementation, which is taking a bit longer than hoped but this is not necessarily a bad thing.

“The President postponed the implementation of free market pricing, which has caused a slowdown with respect to benefits expected from free competitive open market pricing, such as new investments and subsidy removal,” he said.

Adeosun said the marketers were also convinced that (the decade of gas declared by the Federal Government in January 2021) was clearly the way forward.

He said, however, the increase in gas prices worldwide and the unavailability of the product had made it a little more difficult in the roll out.

Adeosun said, “The ordinary Nigerian who was meant to transit to gas not just for cooking but also for powering automobiles and power generation is struggling and because PMS pricing is yet to be fully deregulated.

“It creates an aberration and additional challenge for the adoption of gas, as most people are still dependent on cheap PMS for their cars and generators.”

According to him, while the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) have an important role to play in guiding our future, the best regulator ultimately is the market.

“The market regulates prices if you are too expensive people would not buy from you. The market regulates quality as well as customer service. The market also rewards the best in class.

“We need to move to an era of transparency and information dissemination.

“Energy correspondents need to share as much information as possible with the market and public with respect to cost prices, quality, product specifications, customer service and pump prices.

“That is the best regulation you can ask for,” Adeosun said.

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FG plans to achieve 6000 megawatts by end of 2024 – Minister



Minister of Power, Mr Adebayo Adelabu says the Federal Government plans to increase power generation from 4000 Megawatts to  6000 by the end of 2024 to boost electricity.

Adelabu said this in Abuja on Monday, when the members of the Senate Committee on Power visited the Ministry.

The minister said the Federal Government plans to achieve the 6000 megawatts of power using the hydro and solar plants to increase supply of electricity to households and businesses.

He described as unfortunate and sad, situation that the highest electricity currently being generated stood at only 5800 megawatts.

“The infrastructure are lying there, without adequate maintenance, the turbines are getting rust.

”With proper investment put in place, we can generate 6000 megawatts before the end of 2024,”he said.

The minister also said that the Federal Government was also going to transform the Electricity Distribution Companies, (DisCos) ad,ding that they were the last mile in the power supply industry.

According to him, if they don’t perform, it means the entire power sector is not performing.

“We are putting pressure on the Nigerian Electricity Regulatory Commission (NERC) to ensure that the DisCos sit up and if they have to withdraw their licenses for not performing, why not.

“We are unbundling the DisCos along state lines as some of them are too big for efficiency and effectiveness.

“Some of them are serving so many states, so we are rearranging and restricting the DisCos along state lines, so that each state government will know the distribution company responsible for their states,”he said.

The minister said it was time the federal and state governments start exercising their rights in the management and operations of the power sector.

“We have left it for the private sector for too long and they have messed it up.

“We also plan to franchise the DisCos, so that we can have smaller DisCos that are ready to invest,”he said.

Earlier, Sen. Eyinnaya Abaribe, Chairman of the Committee, said they were in the ministry for an oversight function.

Abaribe said that the oversight visit became necessary to find out the challenges that have led to poor supply of electricity to Nigerians and also the reasons for the consistent collapses of the national grid.

He said the committee in pursuant to the rules and regulations of the National Assembly had already invited the ministry of power and its parastatals  for an investigative hearing on the increase in tariff by April 29.

Abaribe said, “This is with regards to payment for power by Nigerians, so, we won’t want to discuss that before the date.”

”’The committee has already invited the minister and his agencies to discuss the issue of increase in tariff extensively with the committee.”

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NNPC Ltd, PETAN to collaborate to reduce cost of production



The Nigerian National Petroleum Company (NNPC) Limited and the Petroleum Technology Association of Nigeria (PETAN) are exploring a collaboration to reduce the cost of oil and gas production in Nigeria.

Speaking at a meeting with Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, Mr. Mele Kyari at the NNPC towers.

The PETAN Chairman, Engr. Wole Ogunsanya has said that PETAN will demystify the cost of oil and gas production in Nigeria.

Realising that all hands must be on deck with the Presidential mandate to revamp the economy through increased oil production, Engr. Ogunsanya pledged PETAN’s all-encompassing overreaching capacity which its members have garnered for decades on the local content journey to ramp up oil and gas production for the country at reduced cost.

“Our cost of production compared to many countries is too high and at PETAN, we feel that we have the responsibility to bridge the gap of cost production and cost of sales through collaboration with the government, the regulators and the NNPC Limited.”

“In the next few years,” he added, “nearly 70 percent of onshore assets will be owned by Nigerians and PETAN has the strategy to maximise the footprints from these assets through a well articulated model that will allow us to master full in country value chain of Exploration, Production, Midstream and Downstream. The Model Project will start small within  5,000 -10,000 Bopd using our cost-saving technologies, know-how whilst saving cost and then upscale to support NNPCL and other Onshore Asset owners.”

Addressing his guests virtually, the GCEO of the NNPC, Mr. Mele Kyari, regretted his inability to physically receive the PETAN team but expressed delight that PETAN remains a dependable partner in the industry despite the critical changes that its undergoing especially in respect to ramping up production.

“We have a very determined President who makes procurement easier now, fiscal systems have been improved tremendously, as well as midstream and Upstream development all of which create a lot of opportunities which we need to collaborate to deliver.”

Whilst thanking the team for strengthening ties, he added, “On OTC, we will continue to work with you so that our participation becomes robust and meaningful and to get value, opportunities and investments back in-country”.

Executive Vice President, Upstream, NNPC Limited, Mrs Oritsemeyiwa Eyesan, who physically received the PETAN team on behalf of the GCEO, equally noted that it was gratifying to hear the aspirations of PETAN, which aligns with the Federal Government’s and by extension the NNPC’s.

“From our humble beginnings, we thought that the industry would morph into something much larger, but today, we are starting new beginnings with a good number of divestments that are about to be concluded, presenting opportunities in the industry and are to be run by Nigerians for Nigerians necessitating a stronger synergy between the new operators and PETAN as technical oilfield services providers.

“The Executive Order in itself as an enabler, has tried to address the issue of the contracting cycle, which poses a major challenge because it slows down development and increases cost of production. It’s time to work together to improve systems and processes to encourage Nigerians who have the capacity to do business in Nigeria. In area of domestic gas, we are concerned about utilizing the huge opportunities in unlocking the benefits and charge PETAN to collaborate with us in a focused and collaborative approach to fix the power equation in Nigeria which we believe will make everything else fall into place and make countries like Dubai to look like child’s play compared to Nigeria.

“As the GCEO has said, NNPC is committed to continue to work with PETAN and the new dispensation will ensure that we incorporate you in all that we do. On OTC, we also want to charge PETAN to ensure, as the GCEO has said, that value is gotten from the interactions which should be made broader even beyond the African sub-region, which we highly commend PETAN for galvanizing – most of who look up to Nigeria as the giant of Africa – to attract investments from technology giants to add value in-country.”The newly elected executives of the Petroleum Technology Association of Nigeria, who have renewed advocacy around helping Nigeria and Nigerians recover from recurrent losses on oil production levels and revenues are offering their services and expertise as experienced professionals in any capacity across the value chain of the oil and gas industry.

“PETAN deems it an honour to be engaging with the highest level of the oil and gas management in Nigeria and well aware of the mandate of the President to revive the economy, stand willing and ready to deepen collaboration with the NNPC to increase oil and gas production for the common good,” Engr. Ogunsanya noted.

He pointed out that the oil and gas industry which has “been helping our country stay afloat should not be left to buckle under present varying challenges.”

“It was here in NNPC that the policy on local content was first made; how Nigerians would extend the value chain of oil and gas from discovery, exploration, midstream and downstream and retained in-country.

“In 2010, the passing of the Nigerian Content Act which established the NCDMB and catalyzed Nigerians such as PETAN members working at the time in IOCs to come home and begin to develop capacities in the industry.”

Commending the NNPC for its leading role in laying the foundation for local content practice in Nigeria, he charged for deepened partnerships on projects across the board, saying, “We have the equipment, the services and the capacities across the value chain – finding the well, well testing, bringing the oil and gas to the surface, early production facility services, we have the capacity for EPCI, oil and gas processing, and so forth to bridge any gap on assets management.

“On OTC, we are partnering the NUPRC to develop a road show model on attracting potential bidders for deep water assets and we also have an African Collaboration session as part of our OTC programme to chart pathways on this as well.”

The meeting highlight was the presentation of the PETAN Excellence Award to the GCEO, Mallam Kyari in recognition of his leadership and immense contributions to the frontier basin exploration initiative by the PETAN Chairman, followed by group photographs. The PETAN delegation was made up of the PETAN Chairman, Engr. Wole Ogunsanya FNSE; Mr. Stanley Egege, MD, Ce-Stalong Limited; Dr. Iyala Felix, GGM, Solewant Group; Mr. Daere Akobo, MD, PE Energy Limited; Mr. Valentine Obidi, Executive Vice Chairman, Emval Limited; Mr. Chika Ikenga, MD, Eunisell Limited; Engr. Okey Ukaegbu, MD, Catobi and PETAN’s Assistant Secretary; Mr. Akin Osuntoki, CEO, Richardson Oil and Gas and PETAN’s Financial Secretary; Dr. Ibilola Amao, Principal Consultant, Lonadek Global Services Limited and PETAN’s Ex-officio; Engr. Kachi Ekezie, Kapital Energy; Engr. Kevin Nwanze, Executive Secretary, PETAN, and Zainab Alimi-Ajibola, PETAN’s Media Assistant/Abuja Liaison Officer.

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Price of 5kg cooking gas increased by 42.97% in one year — NBS



The average retail price to refill a 5kg cylinder of Liquefied Petroleum Gas (Cooking Gas) rose by 42.97 percent, from N4,610.48 in March 2023 to N6,591.62 in March 2024, according to the National Bureau of Statistics (NBS).

Comparatively, the price saw a monthly increase of 7.10 percent from N6,154.50 in February 2024.

A state-level analysis shows that Kano had the highest average price at N7,609.00, followed by Ogun with N7,363.64, and Akwa Ibom at N7,162.50.

In contrast, the lowest price was in Adamawa where the price was N5,312.50, with Taraba and Zamfara following at N5,375.00 and N5,550.00, respectively.

Regionally, the South-South had the highest average price at N7,003.08, followed by the South-West where it sold at N6,723.22, and the North-East which had the lowest at N6,221.30.

Additionally, the average price to refill a 12.5kg cylinder of LPG increased by 5.77% month-on-month from N15,060.38 in February 2024 to N15,929.04 in March 2024, and by 55.22 percent year-on-year from N10,262.56 in March 2023.

State-level data indicate Sokoto as having the highest average price at N17,833.33, followed by Osun at N17,588.46, and Anambra at N17,417.65. The lowest prices were recorded in Katsina (N12,400.00), Kebbi (N13,137.50), and Bauchi (N14,484.25).

By zone, the South-South again recorded the highest average price at N16,859.85, with the South-East close behind at N16,734.87, while the North-East recorded the lowest at N14,943.48.

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