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The Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) has called on the Federal Government to create a state of emergency on the nation’s refineries, stressing that the government’s inability to carry out turnaround maintenance of refineries for over 12 years has grave implication for the survival of oil and gas sector.

The oil workers’ union has also called on the National Assembly (NASS) to pass the long-awaited Petroleum Industry Bill (PIB) into law to overhaul the inefficient and corrupt oil sector.

NUPENG’s National President, comrade Igwe Achese made the declarations at an interactive session with members of the Labour Writers’ Association of Nigeria (LAWAN) on how to save the oil and gas sector in Lagos

He said: “We demand that the Federal Government create a state of emergency on the nation’s refineries  for Nigerians to benefit from actual price reduction, as we are tired of the successive governments’ empty promises on the over 12 years turnaround maintenance on the four refineries  that are not working at full capacity.

The Trans-Forcados pipelines which carries crude oil from production facilities to export terminals in Forcados has been attacked four times by vandals and oil thieves, since the beginning of this year alone.

Executive Director, Gas and Power, Nigerian National Petroleum Corporation (NNPC), Dr. David Ige who disclosed this in Abuja at the weekend noted that besides the loss of thousands of barrels every day, about 1000 million cubic feet per day of gas are lost too.

Ige explained that the loss of gas from the pipelines means several power plants are also shut down.

"We have had the vandalisation of Trans Forcados Pipeline almost once every week for the last couple of weeks and it is not just a recent outage. From the first of January this year and today, the pipe has been vandalized, we fixed it and it is vandalized again and again and we are in the fourth phase of fixing the pipe in three weeks and that is not just the beginning because it has been like this consistently for many months.

Usually, the guys go there and drill holes and in some cases, they kill some security operatives that try to stop them. The implication of the Trans Forcados is that it is a major artery that evacuates most of the crude oil from production facilities at Oben, Sapele, Utorogun and others to Forcados which is the main export terminals.

"The implication of that is that whenever this pipeline is out, we lose gas production from Oben, Sapele, Oredo and Utorogun and that immediately accounts for almost 40-50 per cent of our entire gas production in the country and it takes us quite sometimes to repair because typical repairs take about four to five days, depending on how many holes we find and sometimes after repairing we realise that additional holes have been drilled somewhere because what happens is that when you want to repair the pipeline, you have to depressurize it and that now gives them additional time to drill more holes somewhere down the line and different from where the original attack had happened", explained.

Oil & Gas Industry / Oil Price Dip - Agric Is the Life-Line - Jonathan
« on: January 26, 2015, 01:01:52 PM »
Dubbing himself the farmers' president, Dr. Goodluck Jonathan on Friday said in the face of declining crude oil prices, agriculture is now the life-line for the country, affirming that he had done so much in this sphere that should it turn out that farmers were not happy with him, Nigerians should not vote for him.

Minister of Agriculture, Dr. Adewunmi Adesina, encapsulated it thus: "Agriculture is the new oil in Nigeria." He also announced how, as part of efforts to end corruption in different aspects of agribusiness, President Jonathan had to cancel all pending waivers for food import after he made it clear to him that food could be produced locally.

Both spoke at an agricultural show tagged Agrifest in Abuja.

Jonathan said since agriculture was paying off so well in America, he saw no reason why Nigerian farmers should not be millionaires and even billionaires, saying the goal of his administration was to make Nigerian farmers that wealthy.

To this end, he said 750,000 young commercial farmers were being created, with the philosophy being to catch the youth early and change their mindset towards agriculture.

"Agriculture is now the life-line for Nigeria," he told farmers from around the country gathered at the Eagle Square for the Agribiz. "As crude oil prices decline, we must create new wealth from the richness of our soil, the vastness of our rivers and the abundance of our labour. We will produce more and industrialise the agricultural sector. That is our total commitment... One area we can say we are doing very well is agriculture."

The Ghana Navy on Saturday captured eight pirates involved in the hijacking of a crude oil tanker on the high seas.

The pirates were armed but no one, including a nine-member crew aboard MT Mariam, was injured when the Ghana Navy crew aboard GNS Blika effected the arrest 26 nautical miles south east of Tema after the ship had drifted into Ghanaian waters.

The owner of MT Mariam, Mr Nakase Sunday told journalists in Tema that the hijacking occurred at 5:00 am on January 11, 2014 at Warri in Nigeria, adding that the vessel contains approximately 1,500 metric tomes of crude oil when it was captured by the pirates.

The hijackers seized the vessel and allegedly drained it of its oil.

Mr. Nakase said the ship was en route to Togo when it was captured. He said he immediately flew into Ghana last Friday after he had detected via a tracking system that the ship had drifted into the Ghanaian waters and quickly approached the Ghana Navy for assistance.

He was full of commendation to the Ghana Navy for the swift response which led to the capture of all the pirates and saving the lives of his crew and vessel, adding that though the products were lost, he was glad the crew and vessel were safe.


All eight pirates, identified to be Nigerians have been brought ashore at Tema pending further investigations. They are Molih Williams, 32; Peggy Aki, 32; Ebiyaibo Amos, 32 and Molih Klinsman, 31.

The rest are David Jacob, 30; Ayetimiyi Oyinle, 29; Pinamo Samiyo, 26 and Picolo John, 25.

Items retrieved

The Navy crew retrieved an amount of $1,270 and 43,850 Naira as well as four AK 47 assault rifles, ten fully loaded AK47 magazines with a total of 300 rounds of ammunition, one pump action gun, 18 mobile phones, one digital camera, one hair clipper, three hand held VHF radio, seven wrist watches and other personal belongings from the pirates.

MT Mariam has since docked at the Tema Port and is under armed guard.


Lt Commander Michael Duvor, Commanding Officer of GNS Blika, said while on operational duties on Saturday, they received information on a pirate attack on MT Mariam from the Acting Command Operations Officer, Lt Commander Theophilus Kafui Agbemabiase.

He said the crew set sail at about 8:05 am and on arrival deployed a search team into the ship who conducted a thorough search of the vessel. According to him, the pirates went into hiding and a search led to the arrest of five in the engine room and another three in the forecastle section of the vessel.

He said the Navy crew boarded MT Mariam at 11:40 am and completed the operation at 3:00 pm.


The Tema Metropolitan Security Council Chairman, Mr Isaac Ashai Odamtten commended the officers, men and women of the Eastern Naval Command for remaining committed to ensuring that Ghana’s territorial waters are safe.

“Clearly, the navy has shown what they are made of. They picked solid intelligence, responded very fast and ensured that the safe waters we have maintained over the years are free of piracy and this arrest has given it a further boost,” he said.

He also commended them for the professional manner in which the Flag Officer Commanding, Eastern Naval Command, Commodore Steve Kwaku Darbo and his personnel discharge their duties and stressed that he has no doubt that the Ghana Navy and the allied agencies in the Metropolis will live up to expectation.

Commodore Darbo said the command will continue to work diligently to maintain security both on land and at sea.

The Nigerian National Petroleum Corporation, NNPC, and its midstream subsidiary, the Pipelines and Products Marketing Company, PPMC, have called on all Nigerians living in communities close to pipelines to protect them from the activities of vandals.

The Corporation made the plea last week at the flag-off of a two-day Anti-Pipeline Vandalism Campaign in Idimu, Alimosho Local Government Area, Lagos State, organised to sensitise residents on the need to join in the war against pipeline vandalism.

Speaking at the event, the NNPC spokesman, Mr. Ohi Alegbe, represented by the Manager, Public Affairs Department, PPMC, Mr. Nasir Imodagbe, called on residents to be vigilant and report all suspicious movements around the pipeline to the Corporation or security agencies.

Highlights of the event included a road show through the communities adjoining the pipeline right of way in the area up to the Ejigbo Depot and the major pipeline vandalism flashpoints of Ijeododo and Arepo.

Alegbe noted that, “What many people don’t know is that besides explosions and pipeline fires that destroy lives and property in these communities. There are more pernicious effects of pipeline vandalism such as its potential to wipe out entire communities through the harm it does to the environment as a result of the constant spillage of products.

Speaking further on the harmful effects of pipeline vandalism on local communities, he said the oil spilled into the environment “destroys aquatic life, pollutes the ground water and renders water from boreholes unsafe for consumption.”

- See more at:

News & Happenings / Scrap NNPC now — Former executives, others
« on: January 20, 2015, 08:48:43 AM »

Many former management executives of the Nigerian National Petroleum Corporation, NNPC, and other oil companies’ senior executives have called for the scrapping of the Corporation, saying, it has destroyed its values and hindered the growth of the Nigerian oil and gas sector.

The oil chiefs made the declaration in Lagos, at a symposium to mark the 80th birthday of Chief Festus Marinho, a former Group Managing Director of the NNPC.

They called for the scrapping of the NNPC, accusing it of deviating from the roles and goals set for it and the oil sector by its founders.

This is a real twist from the oil chiefs, as all had been part of the system, which they now criticise, especially as all had the capacity to bring about the much desired structure they referred while they were still in NNPC.

“The NNPC is today, a net-destroyer of value in the oil and gas sector. Taking a look at developments in the oil and gas sector, the about $5 billion unpaid cash call, among others, will make one to ask if the NNPC is really adding value to the sector and to the Nigerian economy,” said Mr. Austin Avuru, Chief Executive Officer, Seplat Petroleum. Avuru had also retired from the NNPC system.

He noted that the NNPC was set up about the same time as other state-owned oil companies in some countries, but today, its peers in these countries sell their crude oil by themselves, while NNPC only calculates volumes and allocations it gave to other companies to sell for it.

He therefore advised that the NNPC be reduced to an efficient revenue collector for the government, while government makes effort to manage the revenue efficiently, using it as a catalyst for economic growth and ensuring that some portion are saved for the rainy day.

He further stated that the Federal Government should hands off the oil and gas sector, allowing indigenous investors to run the sector professionally.

Speaking in the same vein, Mr. Ibrahim Waziri, Chairman, Transmission Company of Nigeria and former Executive Director, Corporate Services, NNPC, called for the scrapping of the Corporation.

He said, “There is no need to retain the NNPC, especially as other agencies perform the functions of the NNPC very well, such as the Federal Inland Revenue Service, FIRS, in the area of revenue collection.”

He said the role of government in the oil and gas sector needs to be changed, adding that government’s role has reached a diminishing return.

“Government should pull back and allow indigenous players and others to bring their expertise to bear in running the sector, while government focuses on collecting taxes and carrying out its original duties of maintaining law and order and security,” he added.

In his submission, His Royal Majesty, Dr. Edmund Daukoru, (Mingi xii) the Amanayanabo of Nembe Kingdom, disclosed that direct interference from government has over the years destabilised the NNPC.

According to him, for the NNPC to remain relevant, it is necessary to have people with courage and conscience at its helm of affairs, who can dare the government and damn the consequences of their actions.

Also, the keynote speaker, Mr. Odein Ajumogobia, former Minister of State for Petroleum, disclosed that Nigeria’s petroleum policies have always been incoherent, due to the constant change of key officials, in the NNPC and the Department of Petroleum Resources, DPR.

According to him, this instability brought about by the constant changes of key officials is not a recipe for coherent policy making.

He said, “Petroleum policy is not always entirely coherent due in part to the frequent change of important officials. Since NNPC was created 38 years ago, we have had 16 Group Managing Directors (GMD). In 30 years, from 1977 to 2007, there were nine, average of one every three years.

- See more at:

News & Happenings / Nigeria’s stocks suffers worst fall ahead of polls
« on: January 13, 2015, 11:14:37 AM »
The nation’s stocks experienced the worst shock in the world at the weekend as investors spurned Africa’s largest crude producer with political tensions rising five weeks before a key vote and as oil prices continued to slide. This is coming just as Jim O’Neill, former chairman of Goldman Sachs Asset Management projected that President Goodluck Jonathan’s loss in next month’s polls will be a boost to foreign investment.

The Nigerian Stock Exchange All Share Index fell 0.9 percent by the close to extend its five-day decline to 13 percent (NGSEINDX), the most among 93 global indexes tracked by Bloomberg.

The naira depreciated 1.4 percent to 181.50 per dollar and Brent crude dropped to $50.40 a barrel for a weekly retreat of 11 percent.

The 55 percent decline since the end of June in crude, Nigeria’s biggest export, uncertainty over the outcome of the Feb. 14 election and rising attacks by Islamist militants are pushing investors out of Africa’s biggest economy.

President Goodluck Jonathan and the ruling People’s Democratic Party are facing a challenge from a merger of Nigeria’s biggest opposition parties, the All Progressives Congress.

“The risks around Nigeria have increased,” Joseph Rohm, a fund manager who helps oversee Investec Asset Management’s $2 billion Africa fund, said by phone from Cape Town. “It’s a combination of uncertainty ahead of the election, increased violence in the northeast driven by Boko Haram, and a collapse in oil prices.”

According to O’Neill, a loss by Nigerian President Goodluck Jonathan in general elections next month may be viewed “positively” by foreign investors and probably won’t rattle markets.

While Jonathan, 57, has presided over the sale of the nation’s mismanaged power utilities to private investors, his economic policies in the last four years “could have been better,” O’Neill said in an interview in the capital, Abuja. Firing central bank Governor Lamido Sanusi last year, who brought “a lot of credibility” to the government, sent out a negative signal, he said.

“If he doesn’t get re-elected, and it’s because of Nigerian people wanting something different and something better, I think the markets would be happy with that,” said O’Neill. “Foreign investors are pretty negative about Nigeria, so I don’t dismiss the possibility that if he lost people actually might react positively.”

O’Neill ranks Nigeria, Africa’s biggest oil producer, alongside Mexico, Indonesia and Turkey in his MINT group. The countries have four of the largest emerging-market populations outside the BRIC nations of Brazil, Russia, India and China, an acronym he coined at Goldman.

Jonathan will slug it out with former military ruler Muhammadu Buhari, 72, a Muslim northerner and candidate of the opposition All Progressives Congress in the Feb. 14 vote.

The ruling People’s Democratic Party, which has won every contest since army rule ended in 1999, faces its stiffest challenge against the APC, a merger of Nigeria’s biggest opposition parties. Africa’s most populous nation of more than 170 million people is split between a mainly Muslim north and predominantly Christian south.

It isn’t clear what a Buhari victory would mean for investors because he hasn’t set out an economic policy, O’Neill said.

“People would be a bit worried,” said O’Neill, who is also a Bloomberg View columnist. “But it depends on what would happen with the institutional framework and policies.”

Buhari, characterised by supporters as having a tough stance against corruption, came to power in a 1983 army coup and ruled for 20 months before he was unseated by a rival military faction. Buhari lost the 2011 presidential vote to Jonathan and failed to win in 2007 and 2003 elections.

The status of Africa’s largest economy as a prime frontier-market investment destination has been dented by oil prices that have fallen 52 percent over the past year, rising insurgency attacks in the country’s northeast and increasing political tensions ahead of next month’s elections.

Jonathan also removed central bank Governor Sanusi in February last year after Sanusi alleged the state oil company hadn’t remitted about $20 billion in revenue to the government. The Nigerian National Petroleum Corp. denied the allegations. Finance Minister Ngozi Okonjo-Iweala said in May auditors would take three to four months to clarify what had happened to the unaccounted oil receipts that stood at $10.8 billion.

With crude accounting for about 70 percent of government funding and 95 percent of foreign exchange, lower prices have reduced revenue and increased pressure on the naira, which the central bank devalued in November. The naira has fallen 10 percent in the past three months, the second worst performer out of 24 African currencies tracked by Bloomberg.

The lower oil price “exposes the lack of needed structural changes, that hopefully would still come,” O’Neill said. “Nigeria, like any country, shouldn’t be so dependent on the commodity cycle.”

News & Happenings / Just Published: "Nigeria Power Report Q1 2015"
« on: January 09, 2015, 01:01:19 PM »
Strong macroeconomic fundamentals, progress in gas- fired and renewable power generation and the mobilisation of domestic and international financing continue to support our long-term optimistic outlook for Nigeria's power sector. We emphasise, however, that natural gas shortages, inefficient infrastructure and a challenging business environment remain sizeable risks to investment in the market - with the lack of feedstock for the country's expanding thermal power capacity representing the greatest constraint to Nigeria's considerable potential.

We have maintained our core view that the Nigerian power market can offer huge long-term opportunities for investors willing to take current operational risks. This is predicated on colossal untapped - and growing - demand for power, driven by an expanding population, a booming economy and a still limited national electrification rate (currently at about 50% of the population). We forecast real GDP to expand by an annual average rate of 6.8% between 2014 and 2023, while power consumption will grow by an average rate of 9.6% over the same period.

Full Report Details at

Our constructive long-term outlook for Nigeria's power sector - with total power generation forecast to grow by an annual average rate of 8.75% over the coming decade - has been reinforced by government initiatives to increase the price of natural gas for power generators and to provide liquidity to upgrade and expand the country's power infrastructure. Moreover, we expect the investment trend in new natural-gas fired independent power plants to continue in the coming quarters. Furthermore, in light of growing international interest, we have upwardly revised our forecast for solar installed capacity from 2016.

Despite these positive developments, we highlight that improvements will take time to materialise and that Nigeria's business environment continues to represent a challenge to investment. We reiterate that gas...

The Nigeria Power Report features Business Monitor International (BMI)'s market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.

The Nigeria Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.


Nigerian stocks fell for the biggest three-day decline since August 2006 as oil prices traded near $50 a barrel and investors sold their holdings following a rally late last year, reported Bloomberg .

“The Nigerian Stock Exchange All Share Index retreated 4.2 percent (NGSEINDX) by the close of business yesterday in Lagos, the most among 93 global indexes tracked by Bloomberg,” Bloomberg stated. The gauge, down 16 percent in 2014, rose 20 percent between December 17 and the end of the year as investors were attracted to the low prices, according to Ayodeji Ebo, head of research at Afrinvest West Africa Ltd, who was quoted by Bloomberg.

“We’re now seeing profit-taking,” Ebo said by phone from Lagos. “The confidence in Nigeria is still not there. The macroeconomics are weak and oil prices are plunging.”

However, the president of Independent Shareholders’ Association of Nigeria (ISAN), Sir Sunny Nwosu, does not wholly agree that Nigerian stocks are the worst performing in the world.

“I so much doubt it. Nigerian stocks cannot be the worst performing in the world,” said Nwosu. “However, nothing is permanent; at a time Nigerian stocks were the most wanted because of the high returns on investment. So if today it has declined, what is required is for us to work hard to return to the position when they were the most sought stocks.”

Bloomberg emphasised that Brent crude fell below $50 a barrel yesterday before trading 0.1 percent higher at $51.15 and oil is down 54 percent since the end of June.

“Nigeria, Africa’s largest crude producer that relies on oil for almost all export earnings, increased interest rates to a record 13 percent in November to protect the naira,” Bloomberg reported. “The currency depreciated 10 percent against the dollar in the past three months, the most among 24 African currencies tracked by Bloomberg.”

According to the report, banks were among the worst performers. Shares of Zenith Bank Plc (ZENITHBA), the country’s second-biggest lender by assets, weakened by 9.7 percent, the most since October 2008. Guaranty Trust Bank Plc, the largest bank by market value, dropped by the same amount.

News & Happenings / Total achieves flare-out on its operated Ofon field
« on: January 07, 2015, 10:15:06 AM »
Total has completed the flare out of the Ofon field on Oil Mining Lease (OML) 102 offshore Nigeria. The associated gas of the Ofon field is now being compressed, evacuated to shore and monetised via Nigeria LNG.

“The flare-out of the Ofon field illustrates our commitment to developing oil and gas resources around our existing hubs in Nigeria. This important milestone of the Phase 2 of the Ofon project was achieved in a context of high levels of local content,” commented Guy Maurice, Senior Vice President Africa at Total Exploration & Production. “The flare-out on Ofon is also significant for Total’s environmental targets, representing a 10% reduction in the Group’s E&P flaring. This achievement is a clear demonstration of Total’s commitment to the Global Gas Flaring Reduction Partnership promoted by the World Bank.”

The Ofon field is located 65km from Nigerian shores in water depths of 40m. The field initially commenced production in 1997 and is currently producing about 25 000 boe/d. This flare-out milestone will allow for the gradual increase of production towards the 90 000 boe/d production target through monetisation of around 100 million ft3 of gas per day, followed later in 2015 by the drilling of additional wells. The execution of the project also involved significant local content, including the first living quarters platform to be fabricated in Nigeria.

Total E&P Nigeria operates OML 102 with a 40% interest, alongside the Nigerian National Petroleum Corporation (60%).

News & Happenings / Shell agrees oil spill deal
« on: January 07, 2015, 10:07:01 AM »

Oil company Shell has agreed to a $US84 million (N108 million) settlement with residents of a community in Nigeria for two oil spills.

It reached the out-of-court settlement after a British law firm took up the case in London, the BBC reported.

The deal is said to be the largest of its kind in Nigeria, and ends a three-year legal battle.

Lawyers for 15,600 Nigerian fishermen say their clients will receive $US3300 each for losses caused by the spills.

The remaining $US30 million will be left for the community, which law firm Leigh Day said was "devastated by the two massive oil spills in 2008 and 2009".

They said the spills affected thousands of hectares of mangrove in south Nigeria.

The settlement was announced by the Anglo-Dutch oil giant's Nigerian subsidiary SPDC.

"From the outset, we've accepted responsibility for the two deeply regrettable operational spills in Bodo," its managing director Mutiu Sunmonu said.

Shell has said that both spills were caused by operational failure of the pipelines.

However, the company has maintained that the extent of environmental pollution in the area is caused by "the scourge of oil theft and illegal refining".

It also suggested that earlier settlement efforts had been hampered "by divisions within the community".

The law firm representing the Nigerian fishermen and their community, Leigh Day, described it as one of the largest payouts to an entire community after devastating environmental damage.

Leigh Day also said that Shell had pledged to clean up the Bodo Creek over the next few months.

Price hikes and health problems - Amnesty International

An Amnesty International report into the effects of the oil spills in Bodo, a town in the Ogoniland region, said that the spills had caused headaches and eyesight problems.

The price of fish, a local staple food, rose as much as tenfold and many fishermen had to find alternative ways to make a living, the report added. A separate UN study said local drinking water sources were also contaminated.

The two spills came from the same pipe on the Trans Niger Pipeline, operated by Shell, which takes oil from its fields to the export terminal at Bonny on the coast. It carries about 180,000 barrels of oil per day.

News & Happenings / FG threatens to shut IOCs over Cabotage Policy abuse
« on: December 18, 2014, 02:00:06 PM »

The Federal Government said it will shut any International Oil Company caught subverting the provisions of the Coastal and Inland Shipping Cabotage Act 2003 in its bid to ensure that the interest of Nigerian operators are protected.

The Cabotage Act 2003, which is complemented by the Nigerian Content Act 2010 both of which seek to enhance indigenous participation in the shipping and oil and gas sector, provides that vessels to be used in the coastal an inland trade in the country must be built in Nigeria, owned and manned by Nigerians.

But more than 10 years after the coming on stream of this legislation, most of the activities in the maritime and oil and gas sector are still dominated by foreign players due to the activities of these IOCs, who subvert these provisions by giving jobs meant for Nigerians to foreigners.

Director-General of the Nigerian Maritime Administration and Safety Agency NIMASA, Dr. Patrick Akpobolokemi, who spoke newsmen in Lagos, hinted that the agency will no longer take it lightly with any IOC caught subverting the course of the legislation, wich is geared towards promoting indigenous participation in these two all-important segment of the nation’s economy.

He disclosed that the agency has in the last few years commenced meetings and discussions with the IOCs and some relevant government agencies such as the Nigerian National Petroleum Corporation NNPC and Pipelines Marketing Company Limited PPMC with a view to making the IOCs always conscious of the need to adhere strictly to the provisions of the Act in terms of indigenous participation.

It was gathered that one of the outcomes of the meeting held with a recent meeting with the IOCs was the setting up of a committee and sub-committees to work out modalities on how the indigenous operators would be fully integrated into the activities of the IOCs, which is one of the ways of ensuring that they are carried along.

“Nigerians must be given right of first refusal in the award of Cabotage contracts and any IOC that violates this provision will have itself to blame because we have sensitised them enough and many other times, I write them personal letters, especially when I hear that they have acquired new vessels and so no one would claim ignorance”, the DG said.

He also said that as part of measures to ensure that the IOCs comply with the regulations, the agency incorporated members of the Oil Producing Trade Section OPTS, a section of the Lagos Chamber of Commerce and Industry LCCI.

The NIMASA-boss also disclosed that the agency has recently commenced similar meetings with NAPIMS, a subsidiary of the NNPC with a view to ensuring strict compliance with the provisions of the Cabotage.

It was further gathered that the agency has created jobs for Nigerians under the Cabotage regime, as it compels IOCs in the course of inspections and survey of ships to bring more Nigerians on board their vessels to fill up the nation’s quota under the Cabotage and Local Content Acts.


Nigeria will not reduce the pump price of fuel despite falling oil prices at the international market, until the revenue crisis occasioned by the dwindling oil rates is over, finance minister, Ngozi Okonjo-Iweala, said Wednesday.

Mrs. Okonjo-Iweala said in Abuja that the decision to review fuel price either upwards or downwards would only be taken after the current crisis in global oil prices has been settled.

The minister, however, said the government was awaiting expert advice from the Petroleum Products Pricing Regulatory Agency, PPPRA, which is updating the fuel pricing template, to help proffer the best way to address the issue.

The PPPRA is the government agency responsible for monitoring and regulating the price of petroleum products in the country.
Petrol sells at N97 per litre in Nigeria.

“With declining crude oil prices by about 49 percent, soon there will no longer be subsidy in petroleum products as usual,” the minister said. “But, government is not going to take a decision till after the current volatility in crude oil prices has stabilised.”

The minister said the Nigerian government does not want to reduce fuel price today “only for crude oil price to rise tomorrow and we have to adjust the pump price again”.

The minister also announced that the government has decided to impose various charges on luxury goods/items and services, including taxes on private jets and yachts owners, luxury cars, expensive wines and executive mansions.

Other services that would attract taxes, Mrs. Okonjo-Iweala said, include official travels on first class and business class tickets, while foreign trainings would be cut down drastically.

Still reeling under the yoke of recent govern­ment’s devaluation of the naira, occasioned by the crash in the price of crude oil in the international mar­ket, Nigeria’s manufactur­ing sector may face tougher challenges in the months ahead convincing consum­ers to pay more for goods with rising production cost.

This is because while the dwindling price of crude is already sending economic and political signals around the world, the devaluation of the naira is impacting negatively on cost of production, with observers fearing the situa­tion could precipitate a further spike in the price of products and services.

Worried by this develop­ment, the Manufacturing As­sociation of Nigeria (MAN) is said to have gone into a strat­egy meeting to discuss how to deal with the situation and mitigate the consequences of a looming national economic gloom.

The stakeholders’ concern is not just that crude oil is the major export commodity for the country, but every aspect of its life revolves around it, hence yearly budgets are predicated on crude price in the international market.

Even local manufacturers who depend largely on import­ed raw materials are bothered that naira’s rapid depreciation against the dollar would make it unlikely for prices of goods and services to remain stable in the foreseeable future.

Feelers are that already, some sectors of the economy have started reacting to the reality of crippling budget shortfalls. For instance, banks have increased interest rates to avoid liquidity erosion while operators in the Fast Moving Consumer Goods (FMCG) are currently reviewing their prices. Just last Monday, some banks reportedly increased interest rate from 25 to 26 per cent, while several manufac­turing companies have also jerked up their prices.

Prior to these reactions, Ngozi Okonjo-Iweala, the Fi­nance Minister and Coordinat­ing Minister of the Economy, had warned in the wake of the unsavoury development that the country needed to brace up for tough times ahead by reviewing its expenditures and building economic buffers with a budget that would be based on modest oil price.

Also commenting, an eco­nomic expert, Joel Bisola, not­ed with regret that the unfold­ing situation has put Nigerian manufacturers in a precarious condition as government’s re­action to the falling price of oil could lead to the lowering of consumers’ purchasing power and increasing cost of inputs.

He also pointed out that the resultant effect would be that goods emanating from Nige­ria will command higher pric­es, as against imported ones, a development that “will sound a death knell on most indig­enous manufacturers.”

However, Daily Sun learnt that following series of com­plaints by its members, MAN had hurriedly summoned an emergency meeting of its Economic Policy Committee (EPC) in Lagos to discuss the issues and the way forward. It was also revealed that mem­bers lamented the severe im­pact of the erosion of naira’s purchasing parity on their business and the attendant increase in prices of raw ma­terials, machineries and spare parts.

The meeting, it was learnt, concluded that it has led to significant increase in the cost of production and created uncompetitiveness of local products especially in the face of the impending implementa­tion of the ECOWAS Com­mon External Tariff (CET) in January 2015. The CET is expected to allow goods from other West African countries to come into Nigeria without imposition of taxes and import duties.

A leading manufacturer and member of MAN’s EPC, summed up the association’s frustrations when he warned that the naira may end up at N200 to a dollar representing about 33 per cent depreciation.

According to him, the cost of machinery, spare parts, re­fractory, explosives, lubricants and LPFO, which are all im­ported, as well as diesel, sea freight, coal, gas, which prices are fixed in foreign currencies are all on the rise and may end up 33 per cent higher.

He lamented the non-avail­ability of the dollar given that the Central Bank of Nigeria (CBN) has virtually stopped selling foreign currencies for frivolous transactions, a devel­opment that may affect several manufacturers.

Similarly, a source said chief executives of some FMCGs and stakeholders in the building materials, phar­maceutical, food processing industries, among others pres­ent at the meeting, stated that they were forced to increase prices of their products with rising cost of production while others may soon join the band wagon.

They, however, expressed concern over the inevitability of price increase following the unprecedented decline in the value of the naira, stressing it may affect sales adversely.

A resolution of the meeting made available to Daily Sun quoted MAN as saying, “we are forced to raise the prices of our products because of rising cost of production occasioned by the devaluation of the nai­ra.” MAN, which made me­dium and long term mitigation recommendations to the Fed­eral Government at the end of the meeting, said it expected the volatility in the interbank market will lead to instability in procurement planning by industrialists.

News & Happenings / LPG to generate $10b for Nigeria – Minister
« on: December 18, 2014, 01:53:20 PM »
Minister of National Planning Commission, Abubakar Sulaiman, has said if 50 per cent of the current kerosene users in Nigeria would switch over to the use of Liquefied Petroleum Gas (LPG), Nigeria would generate over $ 10.38 billion by 2018.

Sulaiman  stated this in Abuja, at the inauguration of the Inter- Ministerial Committee on Kerosene to Gas Initiative in Nigeria: The Indonesian Model.

The Minister, represented by the Acting Secretary to the Commission, Bassey Akpanyung, said the Inter ministerial Committee was expected to discuss the possibility of replicating the Indonesian model of kerosene to LP Gas in Nigeria

Sulaiman explained that the adoption of the Indonesian model of kerosene to LP Gas Initiative in Nigeria would greatly promote the wide usage of LPG over kerosene, thereby boosting the economic activities of Nigeria.

“Without doubt, a vibrant LPG market in Nigeria will create a ripple effect that will translate into employment generation for the people, revenue generation for government, more demands for cylinders at all levels in the market, more business for SMEs, environment benefits as well as carbon credit earnings,” he said.

He said globally, it  has been acknowledged that domestic LPG is a well accepted and long established source of energy for cooking , adding that unfortunately it is still among the best least used in the Nigeria’s household energy mix.

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