•To eliminate NPA’s transport charges, others
• I’m not aware of price hike by NNPC stations — Kachikwu
• Senate demands daily oil, gas production records
ABUJA—The
Federal Government, weekend, said it would undertake a review of the
pricing template for Premium Motor Spirit, PMS, also known as petrol, to
forestall a further increase in the price of the commodity.
Minister
of State for Petroleum Resources, Dr. Ibe Kachikwu, stated this during a
grand award ceremony organised by the Petroleum Products Pricing
Regulatory Agency, PPPRA, branch of Petroleum and Natural Gas Senior
Staff Association of Nigeria, PENGASSAN in Abuja.
Meanwhile the
Senate Committee on Petroleum (Upstream), has asked the Department of
Petroleum Resources, DPR, to henceforth, prepare and forward to it, the
daily product records of oil and gas in the country.
The
committee said the record of daily crude oil production must be
submitted to the Senate every month. This will include petroleum
industry activities, data on seismic activities, crude oil production,
liftings, allocations, exports by destination, receipts, gas production,
utilization, sales, transmission and exports.
Chairman of the
committee, Senator Tayo Alasoadura, who led members of the committee to
the headquarters of the Department of Petroleum Resources, DPR, in Lagos
on oversight responsibility, said the development would afford the Red
Chamber the opportunity to have deeper knowledge of activities of the
oil and gas sector in the country.
Alaosoadura, who represents
Ondo Central Senatorial District on the platform of the ruling All
Progressives Congress, APC, frowned at perceived sidelining of the
legislature in the provision of some information on activities by
agencies of government, saying the trend must stop.
Speaking on
the pending review of pricing template, Kachikwu said it would help
cushion the effect of rising foreign exchange rates and the dwindling
value of the naira against major international currencies on the price
of petrol.
Oil marketers have N30 margin
In
early October, Governor of Central Bank of Nigeria, CBN, Mr. Godwin
Emefiele, had said in a session with Newspapers Proprietors Association
of Nigeria, NPAN, that fuel price would not be adjusted because
marketers had been given N30 profit margin per litre.
He had
said: “I am telling you that the price of petrol will not be reviewed
based on the arrangement the CBN and the NNPC have put in place to see
to it that dollar is available to the importers of petroleum products
and I am telling you that. What is that arrangement at this time, all
the International Oil companies, IOCs, have been directed, based on the
agreement between CBN and NNPC, that they should channel their dollars,
oil companies and servicing companies selling their foreign currencies
cannot go directly to begin to auction their money. They should channel
their dollars through a mechanism created and operated between the CBN
and NNPC where dollar is made available to marketers to import petrol.
Foreign exchange template
“At
the time this programme started, the marketers were told that they can
procure their foreign exchange at no more than N280 to the dollar and
their price should not be more than N145 per litre. But in working out
the price of N145 per litre, the template provided for nothing less than
N30 per litre margin for the marketers. That template is available. By
making N30 per litre available, even if the marketer does not find the
product at N280, but finds it at N300, N305 or even N310, that marketer
will still make profit though at a reduced margin.
“That is the
template that is currently in place and I am optimistic that it will
work. We will see to it that even the IOCs are not compelled to sell at a
fixed rate but they will sell at an average interbank rate of the
previous day. So even today, some are selling at N305, N310, N315, the
average cannot be more than between N305 and N310. I am saying if a
marketer procures foreign exchange at an average of between N305 and
N310, he will still make profit by selling at N145 per litre, that is my
argument.”
Inter-bank exchange rate
The
exchange rate at the interbank market stands at N305 to the dollar,
making the template still relevant. But major marketers and Independent
marketers are not importing, leaving only NNPC to bear the brunt of fuel
importation. “There is no need for a marketer to contemplate price
increase,” Mr Emefiele had said.
But there have been reports of
NNPC saying that the current price of N145 per litre is no longer
sustainable. NNPC last month said it can no longer sustain the sale of
petrol at N145 per litre. Recall that Labour last month warned against
increase in pump price of petrol. Group General Manager, Crude Oil
Marketing of the NNPC, Mele Kyari, had said with the current exchange
rate, it was no longer feasible to sell petrol at N145 per litre.
TheNNPC official said at this year’s Oil Trading and Logistics Expo,
holding in Lagos that “we have a very difficult business environment. It
is impossible today to import products at the current market price, at
current fixed foreign exchange rate.
“There is no way today you
can take products to retailers and sell at N145. It is not possible. If
that is true and I believe that it is, because we all go to the market,
why can’t we sell above N145? That is where legislation should come in.”
NNPC sells at N145
Meanwhile,
Kachikwu has said that he was not aware of the fact that the retail arm
of NNPC had increased the price of petrol from N141 per litre to N145
per litre, the maximum price allowed by government under the price
modulation mechanism, adding that he would consult with the NNPC
management to understand the reason for the increase.
“I am not
aware that the NNPC has increased price. I need to look into that, it is
a bit of surprise to me, because there are processes in doing this. If
they have done that, it means they are doing it wrongly. Let me find out
what the facts are,” he noted.
Commenting on the petrol price
template, Kachikwu explained that the review would eliminate certain
charges that are attributable to the Federal Government and some of its
agencies, so that the price can be retained where it is at the moment.
He
said, “One of the things I think we had hoped to do, which we would
still do, before we embark on any price increase is to work on those
templates. There are still areas that are within the government
controlled aspects; payments to the Ministry of Transport and the rest;
payments to the Nigerian Ports Authority, NPA.
“We are working on
the possibility of being able to shift that out so that we can still
modulate the prices within where it is right now. But I would hold a
conversation with the industry and see how it is going.”
Furthermore,
Kachikwu explained that the meeting brokered between President
Muhammadu Buhari and leaders of the Niger Delta was part of series of
actions to bring lasting peace to the Niger Delta region, while he
lamented that the crisis recorded in the region over the last one year
had taken its toll on the country, its resources and even the sustenance
of the oil industry.
Also speaking, Acting Executive Secretary
of the PPPRA, Mrs. Sotonye Iyoyo, said while they celebrate the last 13
years of the PPPRA, they are aware that the challenges before it in
attaining full and total deregulation of the downstream petroleum sector
are daunting.
It would be recalled that in September 2016,
former and present Group Managing Directors of the Nigerian National
Petroleum Corporation expressed fears that the current pump price of
N145 per litre was no longer feasible.
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Senate Committee calls for oil data
The
Senate Committee in stating its position, said: “The problem with us is
that we don’t think the National Assembly is part of government.
“I
have always told people that it the National Assembly is taken away
from governance, there would be no democracy anymore. In any other
government setting, there is the executive, legislature and the
judiciary. But it’s only when you have the legislature which will act as
a check on the executive that there’s democracy.
“So, whatever
is worth doing for the executive must also be done for the legislature
so that, at the end of the day, we will all understand and speak with
one voice.
“Some believe that it is only the executive that is
running the government, no. It is not only when you come for budget that
the National Assembly should be involved, it should be on a daily
basis.
“When you budget money for certain areas, is it only when
we come here like this, maybe for once or twice in a year that we should
know what you are doing with the money? No.”
Speaking on the
performance of the agency, Alasoadura expressed satisfaction with the
performance of DPR, saying so far, it had lived up to expectations of
people even as he said the agency was still grappling not only with
funding problem, but also low workforce.
“Well, we are very
impressed by what we saw. A lot of rumours fly around about the seeming
incompetence of the DPR or the seeming collusion that people think they
do, but from all the efforts they are putting in to get the required
results in information gathering, going technical or going ballistic,
let me put it that way, from what we saw here today, I think they are
putting in their best.”
And I believe that in a few more years
time, doing business in the oil industry in this country will be so
transparent that even people will be able to read what is happening in
the oil industry from their bedrooms, from their offices and that will
be a day for Nigeria.”
He dismissed the notion in some quarters
that the DPR had over the years displaced incompetence in executing its
constitutional mandate.
Hear him: They are not incapable, I think
what has happened is that people have made up their minds that they
(DPR) are not good.
“And with this, the DPR needd to come out
more, let people know what they are doing so that this bad impression
about them can be corrected, ‘he said, adding :”I too, had believed that
maybe they were not doing the right thing.
“ But again, when I
compared it with the notion I had before I became a senator, that
senators just go and sleep and every month, take money home, now that I
don’t sleep at all, I know that the perception was wrong.”
“From what we have seen here today,people’s perception about the DPR may not be correct.
“And
when they start coming out to let the people know what they are doing
and how they are doing it, I’m sure the perception will change, “he
further added.
Alaosoadura said the Senate would seek for
additional funding for the DPR, given that what was at its disposal was
inadequate to enable it execute it’s constitutional mandate expected of
it in the ongoing year.
“ They have briefed us about their difficulties and I believe that the most important area there is funding.
“If
they have enough money, they can do a lot of things and without money,
you cannot modernize. It is modernisation that is required. They have
started it and I believe that the National Assembly will support them to
ensure that they get to the level that they should get to.
The
committee, which was surprised to know that the agency had only 1120
staff in its workforce, promised amendment of the necessary existing
acts to raise its workforce in order to enhance its efficiency.
To
this end, the committee requested the organisation to supply it with
its nominal roll so that it can address the issue. Making presentation
before the Committee, the Director, DPR, Mr. Mordecai Danteni Baba
Ladan,hinted that the agencies was actively working with a view to
launching an innovation that would enable it monitor oil production,
delivery to locations as well as monitoring of compliance in petroleum
prices by filling stations from its offices. But he hinted that the
organisation’s dream of achieving higher feats was not only being
hampered by inadequate funding but also inadequate workforce.
To
this end, the committee requested for the nominal roll of the agency’s
workforce with a view to looking into the issues raised.
Ladan
explained that the DPR ,as a regulatory agency of the oil and gas
industry in Nigeria with the responsibility cutting across the entire
spectrum of the petroleum industry, through the upstream, midstream and
downstream sectors was doing its best to ensure it lived up to the
expectations of Nigerians.
http://www.vanguardngr.com/2016/11/fg-review-fuel-price-template-kachikwu/
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