Nigeria continues crude-for-petrol exchange as fuel landing cost hits N1,117/litre

Nigeria remains engaged in exchanging 450,000 barrels per day (bpd) of crude oil for approximately 1 million metric tons (MT) of petrol, equating to 1.341 billion liters, through its state oil company, according to Mr. Bello Rabiu, former Chief Operating Officer of the now-defunct Nigerian National Petroleum Company Limited (NNPC).Rabiu highlighted that these products are supplied via the Direct Sale Direct Purchase (DSDP) arrangement, a form of crude swap between international traders and the NNPC, which currently holds a monopoly on petrol imports into Nigeria.The ex-NNPC official spoke just as petroleum downstream operators under the aegis of Major Energy Marketers Association of Nigeria (MEMAN) disclosed that the current landing cost of petrol into the country now stands at N1,117 per litreAlso, the Founder and Chief Consultant at B. Adedipe Associates Limited, Abiodun Adedipe, posited that the frustration in the Nigerian petrol supply value chain was caused by the unavailability of feedstock for local refineries, particularly 650,000 bpd Dangote Refinery, which has the capacity to meet domestic petrol demand.

The trio spoke at a webinar organised by MEMAN, where the stakeholders called for a truly fair and competitive petroleum downstream market to keep the supply and prices of products at a reasonable level.In his presentation, Rabiu argued that the removal of petrol subsidy as claimed by the federal government was not enough to depict deregulation.He maintained that it also required the creation of competitive market environment that will guarantee the supply of products at commercial prices to customers.Rabiu, who is now an independent consultant, condemned the importation of petrol solely by NNPC, saying, “This is a monopoly, which is against deregulation procedures “He said: “With consumption capacity estimated at about one million MT (1.341 billion litres) of currently being supplied through DSDP importation programme of NNPC, whereby local and international traders are contracted to lift Nigerian crude oil owned by NNPCL and deliver petroleum products in ex-Lagos.“This remains the only supply source of PMS in the Nigerian market due to inability of other players to secure forex for direct importation. Thus, NNPC is effectively the only supplier of PMS in Nigeria today.

“Being the only supplier and importer of PMS in Nigeria, NNPC is currently the determinant of PMS price as other players are only adding their margins to arrive at pump price depending on location.”He therefore called for a review of the current business model and institutional arrangements of the deregulation policy which has resulted in one dominant player’s power to import and fix the prices of petrol across the nation.Rabiu added that this was not consistent with the provisions of Petroleum Industry Act (PIA) 2021 which envisages the participation of multiple players operating under open competitive environment, with multiple supply sources from import and domestic refineries under a level playing field, aimed at delivering products at lowest possible prices at the pump.“Under the current model, No one knows the actual cost of importing a litre of PMS into the Nigerian market except NNPC.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) no longer publish the pricing template to enable the citizens know the official landing cost of any product Ex-Lagos since the announcement of full price deregulation and total removal of PMS subsidies,” he said.According to him, this situation has resulted in total lack of accountability and substantial revenue leakages that cannot be quantified due to lack of transparency in the process.“If we can be told what Customs duty is daily in Nigeria, we should be equally told how much is the fuel being imported.“For example, NNPC insists there is no more subsidy in the pricing of PMS but the difference between the Automotive Gas Oil (AGO) and PMS open market prices clearly shows some elements of subsidies or hidden cost recovery in the open market prices of PMS across the nation” he stated.Speaking at the session, Executive Secretary of MEMAN, Mr. Clement Isong, revealed that the current landing cost of petrol into the country now stands at N1,117 per litre.He also disclosed that the landing cost for diesel stands at N1,157 per litre, while that of Aviation Turbine Kerosene (ATK) is N1,217 per litre, explaining that the administrative cost and freight cost were among the cost components.Isong, who informed the association would henceforth publish the landing cost data on a daily basis, encouraged the private sector to invest in benchmarking, adding that there must be free flow of marketing information.

According to him, “henceforth MEMAN will be publishing petroleum products landing cost of PMS, ATK, and AGO on daily basis, newsletter on weekly basis, quarterly industry report and yearly reports.”Om his part, Adedipe called on the federal government and the NNPC to urgently announce the needed policy guidelines on the operation and commercial arrangement of the $20 billion facility as they affect the market.He stated that the entrance of the Ibeju-Lekki-based refinery in the downstream petroleum sector was a game-changer in Nigeria’s journey towards full deregulation, adding that the world’s largest single-train refinery would soon become a major supplier of petroleum products in the Nigerian market with some identified implications.Adedipe expressed concerns on the “complete silence of government policy makers, regulatory authorities and NNPC on the operational readiness of Dangote Refinery and the new business model and commercial arrangement”.Adedipe therefore urged the regulators to act in a way that enables the market to determine the price of petroleum products and services in medium to long term.But in the immediate short term, he said there must be regulatory intervention to ensure smooth entry of Dangote Refinery into the supply chain.This intervention, he canvassed, should guarantee consumer protection and delivery of products to the market at cost reflective prices.“Perhaps, it is appropriate to return to guided deregulation with reintroduction of pricing template at this time to encourage efficiency and competitive market behaviour,” he added.On the way forward for the country and the downstream sector, the economist recommended that the government should strive to collaborate with all stakeholders to effectively implement the Petroleum Industry Act (PIA) 2021 and achieve lowest cost of refining or importation of products into the Nigerian market.

He urged the regulators to do the needful by engaging all relevant stakeholders and issuing appropriate guidelines that will guarantee cost recovery by all refiners and petrol importers under a level playing field.Furthermore, Adedipe advocated that all anti-competitive practices such as collusion and abuse of market share in establishing prices of petroleum products should be collectively resisted by industry playersHe called for the establishment of transparency in the downstream value chain to enable consumers know and realise value for what they are paying, adding that there should be proper management of the price volatility through announcement of monthly guided price.In addition, the analyst canvassed that the NNPCL Pipelines and Storage Company should be repositioned and adequately funded under a Public Private Partnership (PPP) arrangement to operate as a neutral transportation and storage entity, serving NNPC and all other oil marketing companies under an open access regime.

Nigerian govt summons 80 private jet owners over operating licences

The Federal Government, through the Nigerian Customs Service (NCS), has initiated a new effort to address the issue of improperly imported private jets.According to recent findings, around 80 private jet operators have been summoned to the NCS headquarters in Abuja to present their aircraft import documents.This special aircraft import verification exercise begins tomorrow and is set to run for 30 days. A public notice from Customs outlines the objective of the exercise: “The Nigeria Customs Service announces a verification exercise for privately owned aircraft operating in Nigeria. This exercise aims to identify improperly imported private aircraft without documentation, ensuring proper imports and maximum revenue collection.”

Private jet owners and operators are required to bring several documents to the verification, including:– Aircraft Certificate of Registration– Nigerian Civil Aviation Authority’s (NCAA) Flight Operation Compliance Certificate– NCAA’s Maintenance Compliance Certificate– NCAA’s Permit for Non-Commercial Flights– Temporary Import Permit (if applicable)This crackdown follows a year-long suspension of similar actions by the Federal Government. Over the past three years, efforts have been made to recover import duties worth billions of naira from private jet operators who have exploited regulatory loopholes to evade these payments. While some jet owners have paid the mandatory import duties after significant steps by the NCS, many have yet to comply.

Several operators have allegedly used Temporary Import Permits (TIPs) to avoid paying the statutory import duty. A TIP, valid initially for 12 months and extendable by six months twice, has been indefinitely extended by some operators, prompting previous crackdowns by Customs.According to sources, about 80 private jet operators are expected to participate in the verification exercise, including operators of 20 aircraft imported since the last exercise. The NCS aims to ensure payment of the mandatory import duty, with the possibility of grounding non-compliant jets.The TIP loophole has been criticized as a fraudulent means of evading import duties. Private jet importers, particularly those with foreign-registered aircraft, are supposed to pay 5% of the jet’s value as import duty. However, due to the high cost of private jets, many owners prefer to use TIPs, citing the International Civil Aviation Organisation Convention’s Article 24, which allows for customs waivers for commercial aircraft temporarily operating in a country.

The new Customs leadership is determined to enforce the payment of import duties. Unconfirmed sources suggest the government could collect nearly N100 billion in unpaid duties due to the high exchange rate. This figure could increase if Customs implements a 25% penalty fee for delayed payment, in addition to the 5% import duty.Whether private aircraft operators will cooperate remains uncertain. Some have previously taken legal action to avoid paying these duties. The NCS National Public Relations Officer, Abdullahi Maiwada, confirmed that the verification exercise will begin on Wednesday.As this exercise unfolds, it will be critical to monitor its impact on compliance and revenue collection for the Federal Government.

“No More N12k/Per Bag:” Survey Shows Dangote, BUA, Others Crash Cement Prices to New Low

A market survey conducted by Legit.ng shows cement prices have dropped from the high of N15,000 it sold in January 2024. Retailers of the product said the drop is due mainly to ex-depot prices, which have also dropped following a meeting the producers had with the Nigerian government.

Nigerians reduce demand for cement According to them, the demand for cement has thawed since February 2024 as Nigerians have resisted buying the product due to its high cost.

A dealer in the Iju-Ishaga area of Lagos, identified as Olayinka Olaniyi, told Legit.ng that sales are picking up due to the reduced price. “At a point, Nigerians stopped buying due to the high price of N15,000. I am sure most dealers ran at a loss then because we had mainly old stocks which we wanted to offload quickly,” he said. He said that currently, the product sells for between N7,500 and N8,000, depending on the brand and the demand for the brand.

Another seller, Justice Ike, in the Ogba area of Ikeja, corroborated Olaniyi’s assertions, saying that the prices are crashing as manufacturers adjust their depot prices. Crash in dollar leads to price crash He also said the naira’s appreciation against the dollar may be responsible.

“We know that the naira is doing well against the dollar now, and it would be absurd if manufacturers continued to sell the product at the old prices. “I also believe that the Federal Government’s intervention and the threat to license more importers may have worked, leading to the reduction in price,” he said. A major distributor in Owerri, John Ikechukwu, told Legit.ng in a telephone interview that low demand is also driving the price crash. “People are backing off now due to the high price, but it is beginning to come down now.”

He confirmed that the product is currently sold at N9,000 in the southeast despite the brand. Ikechukwu also attributed the fall in price to the gains of the naira against the US dollar. In a previous report by Legit.ng, Nigerians reacted to the rising cement prices, with stakeholders saying the hike would lead to more building collapses as people may resort to cheap means.

Cement price moves from N6,500 The price of a 50kg bag of cement has risen to about N9,500 in many parts of Lagos and around the country, primarily caused by the biting effect of inflation in Nigeria. Findings show that building materials’ prices have steadily risen from N6,000 to N6,500 to over N9,000 in many parts of the country. The Guardian reports that the cement price rose to N8,000 in Kogi state as many builders were unaware of the sudden price change. The periodic increase in the product’s price has caused retailers to halt sales, fearing that manufacturers might increase prices soon.

Price list of Dangote, BUA, Lafarge, others Legit.ng earlier reported that retailers of significant cement producers in the country have continued to sell the commodity at high prices despite a recent agreement between manufacturers and the federal government of Nigeria. Dangote, Lafarge, BUA, and other cement producers had agreed to cap 50kg bag of cement between N7,000 and N8,000.

This was agreed during a meeting initiated by the minister of works, David Umahi, attended by his counterparts from the Ministry of Industry, Trade, and Investment, including Doris Uzoka-Anite, in Abuja on Monday, February 19, 2024.

Dangote Refinery Female Worker Shot By Company’s Private Security Becomes Amputee, Laments Abandonment By Employer

Afemale staff of the Dangote Refinery, Ibeju Lekki in Lagos State, Rashidat Ahmed, whose right hand was amputated after a security official of the company shot her, has lamented that the company abandoned her in her worst moment.

Rashidat, who said she was employed as a cook by Dangote Refinery, told SaharaReporters that she was shot in her right hand by one of the local security the company recruited to scale up the security of the company.

Rashidat’s husband, Ishmaila Sa’adu Zango, who is also a casual staff of the Dangote Refinery narrated his wife’s ordeal to SaharaReporters, recalling how she was shot by the security personnel, Nanin Wada, a hunter recruited by the company and how Dangote Refinery gave them N730,000 and abandoned them while they were still in the hospital since 2023.He further lamented how Dangote Refinery allegedly blocked every means of communication and anyone who attempted to contact the company over the matter.

Zango said, “I have been working with Dangote as their driver under the security department, casual staff, for almost 3 years now. Along the line, the company started having security challenges and brought enough security, army, police, and the hunters to protect the company.“In March 2023, my wife was employed in the company to cook for security hunters. Ever since she started working with the company, there was no challenge until August 27, 2023, when Dangote bus came to pick us up to go to work in the morning.

“While we were inside the bus, one of the Dangote security hunters was inside the car with his gun. My wife and I were inside the bus also with some of our colleagues in the company.On our way going, when I saw the way this security was holding his gun inside the bus, I personally asked him why he held the gun that way but he looked at me and started laughing.“I told him that was not how policemen hold guns but he refused to listen to me.

On our way, I heard the sound of a gun. My wife and her colleague shouted inside the bus. When I looked at her, she told me that her hand was cut and immediately I saw my wife’s condition, I shouted.We went to two hospitals but they rejected us, until we went to the General Hospital Lagos before they started treating my wife. The hunter security that shot my wife, by name Nanin Wada, was arrested by police officers and locked up.

“Police wanted to collect the gun but they refused to give it to the police, saying that it was a family issue. Meanwhile, nothing joined me with Nanin Wada.“While we were in the hospital, doctors said that the only thing they could do was cut my wife’s hand, so I called the company.“Here is the listed money the company sent to me to treat my wife. On August 28, 2023, N100,000. On August 28, 2023, N150,000. On August 30, 2023, N30,000. On September 5, 2023, N150,000. On September 9, 2023, N100,000. On September 14, 2023, N100,000. On September 19, 2023, N100,000. In total, the company sent the sum of N730,000.”Zango said that “After the company sent this mentioned money, they refused to send other money and we were still in the hospital by then.

I was the one that kept on struggling, borrowing money before I was able to pay for the hospital bills before we were discharged on October 3, 2023.”He said that while his wife’s hand got amputated, he had spent an extra N453,780, lamenting that “Since the time we were in the hospital, I kept calling Dangote orderly to send the money we spent in the hospital but he kept on turning me up and down.

“Up till now, my wife has not recovered properly because they asked us to be returning to the hospital every week for dressing, which involves money but the company has abandoned my wife and I.

“Because of this incident, my mother-in-law died because she had high blood pressure.”SaharaReporters’ several efforts to contact Dangote Refinery for comment and reaction failed as none of its official means of communication was reachable.Calls made to its contact phone numbers provided on its official website did not connect. Similarly, text messages sent to the numbers did not deliver as they bounced back.Also, an email sent to the company’s official communication email did not deliver but bounced back saying, “Your message to communications@dangote.com couldn’t be delivered.

The group communications only accepts messages from people in its organization or on its allowed senders list, and your email address isn’t on the list.”SaharaReporters was also informed that the National Human Rights Commission (NHRC) engaged the company through a letter after an attempt to visit the company’s Ibeju Lekki office was rebuffed by their private security.

However, though the letter was received on March 11, the company has not taken any action on the matter nor given any explanation to why it is no longer taking any action on the issue.SaharaReporters was also informed that on Wednesday, an official of the National Human Rights Commission visited the company’s office at Falomo but the security also refused to allow the government officials access to meet the Head of Legal department of the company on the matter……..