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Oil & Gas Industry / Nigeria’s Shaky Economic Outlook
« on: March 25, 2015, 08:51:30 AM »

Communiqué Number 99 of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) captures its sense of satisfaction with the state of the Nigerian economy. The position was based on a reading of the domestic and foreign environments, as well as earlier counter measures it had launched to contain threats to the economy. At one of its meetings, the MPC identified some of the red flags for the economy as the fall in oil prices, ‘tepid’ recovery of the global economy and the diminishing flow of foreign direct investment. Yet it went ahead to offer Nigerians assurances of a situation under control.

Patriotic as these assurances may be, such optimism is not shared by many Nigerians, who expect more from the body. The suspicion that the MPC is deliberately not saying all that needs to be said or is misreading the signals is strong. And that would be a disservice to the nation.

For instance, the uncommon gravity of the current oil market induced crisis the country is facing translates into, among other implications, a drop in foreign exchange earnings with consequent adverse effects on its import dependent economy. In only one year, between December 2013 and the end of 2014, external reserves plummeted by 20% from $42.88billion to $34.25billion and they are expected to yet drop further. The combined effect of the synchronised haemorrhage of the economy’s lifeblood through these two dispensations is already telling on the citizenry, as the CBN has commenced the rationing of forex in the official market. This is just as devaluation of the naira has also commenced with an initial eight per cent drop in value, and the possibility of more of such interventions cannot be ruled out. Meanwhile, it is feared that little or no help may come from the international community immediately. The slow growth of the global economy, especially with the associated retrenchment of investment portfolios due to risk aversion by investors worldwide has not been helpful. In fact, the stem of the flow of foreign direct investment into the economy has also deepened Nigerians’ level of concern.

With its back against the wall, hope for Nigeria’s economy lies in re-growing it towards sustainable self-sufficiency. And this has to be done by the country pulling itself out of the morass by its bootstraps, ostensibly with the active involvement of the MPC.

While the right of the MPC to be optimistic about the dividends of its responses the economy is experiencinag cannot be denied it, carrying the citizenry along remains sacrosanct. In pursuing monetary policy stability, the CBN had in previous situations launched several initiatives, including the establishment of special monetary vehicles to provide a conducive operating environment for economic actors. The present situation calls for more of such initiatives that will not only be seen to exist, but that will also be accessible for Nigerians to benefit from in the times ahead.


Despite United States’ refusal to import crude oil from Nigeria due to its shale boom, the country exported 2.05 million bpd of crude oil and condensate to Europe and India in 2014.

The United States traditionally had been the largest importer of Nigerian oil until the last few years. It changed from being the largest importer of Nigerian oil in 2012 to the 10th largest in 2014.

India is now the largest importer of Nigeria’s oil, purchasing about 370,000 bpd or 18 per cent of Nigeria’s total crude exports in 2014.
The International Energy Information Administration (IEA), in its 2015 report on Nigeria oil and gas sector, stated that Europe continued to be the largest-regional importer of Nigerian oil, importing slightly more than 900,000 bblpd or 45 per cent of the exports in 2014.

According to the report, the United States typically imported between nine per cent and 11 per cent of its crude oil from Nigeria before 2012. However, this share has fallen, and in 2014, U.S. imports of Nigerian crude oil accounted for less than one per cent of total U.S. crude oil imports.

It stated that Nigeria in the past has been an important oil supplier to the United States, but the absolute volume and the share of U.S. imports from Nigeria have fallen substantially. “The United States imported an average 60,000 bpd of crude oil from Nigeria for the first 11 months of 2014, the lowest amount since the United States started importing Nigerian crude in 1973 and more than a 90 per cent drop from the average volume imported in 2010.

“As a result, Nigeria fell from being the 5th-largest foreign oil supplier to the United States in 2011 (accounting for nine per cent of U.S. crude imports) to the 10th in 2014 (accounting for less than one per cent of U.S. crude imports). The growth in U.S. light, sweet crude oil production from the Bakken and Eagle Ford has resulted in a sizable decline in U.S. imports of crude grades of similar quality, such as Nigeria’s crude oil.

“As U.S. imports of Nigerian oil decreased over the past few years, European imports increased. European imports of Nigerian crude and condensate increased year-over-year by more than 40 per cent in 2011 and by 30 per cent in 2012, making Europe the largest regional importer of Nigerian oil by far. The European embargo on Iranian crude imports and sporadic supply disruptions in Libya contributed to Europe’s increased oil imports from Nigeria”, it said.

It disclosed that Nigeria is the largest holder of proved natural gas reserves in Africa and the ninth-largest holder in the world. Nigeria produced 1.35 Tcf of dry natural gas in 2013, ranking among the world’s top 30 largest natural gas producers.

According to the report, natural gas production is constrained by the lack of infrastructure to monetize natural gas that is currently being flared.
According to the report, despite holding a global top-10 position for proved natural gas reserves, Nigeria produced 1.35 Tcf of dry natural gas in 2013, ranking among the world’s top 30 largest natural gas producers.

“Natural gas production is constrained by the lack of infrastructure to monetize natural gas that is currently being flared. Most natural gas reserves are located in the Niger Delta. The natural gas industry is also affected by the same security and regulatory issues that affect the oil industry.

“Dry natural gas production in Nigeria grew for most of the past decade until Shell declared a force majeure on natural gas supplies to the Soku gas-gathering and condensate plant in November 2008. The Soku plant provides a substantial amount of feed gas to Nigeria’s sole LNG facility. Shell shut down the plant to repair damages to a pipeline connected to the Soku plant that was sabotaged by local groups siphoning condensate. The plant reopened nearly five months later, but it was shut down again for most of 2009 for operational reasons.

“As a result, the plant’s closure led to a reduction in Nigeria’s natural gas production, particularly from Shell’s fields in the Niger Delta, and a decline in LNG exports in 2009. Natural gas production gradually grew after 2009, and it reached its highest level of 1.5 Tcf in 2012. In 2013, production fell by 10% to 1.35 Tcf because of supply disruptions and a temporary blockade on Nigeria’s LNG shipments, which also led to a corresponding fall in exports and, to a lesser extent, domestic consumption. Nigeria consumed 490 billion cubic feet (Bcf) of dry natural gas in 2013, about 36 per cent of its production.


Delta State Governor, Dr. Emmanuel Uduaghan has said the international community cannot be exonerated from the criminality of crude oil theft in Nigeria.

Speaking yesterday at the commissioning of 30 gunboats procured by the Defence Headquarters for the Joint Task Force (Operation Pulo Shield) in Yenagoa, Bayelsa State, Uduaghan observed that 80 per cent of Nigeria’s stolen crude was exported for use by refineries outside Nigeria.

“Over 80 per cent of the stolen crude is exported and refined outside Nigeria, the international community needs to cooperate with Nigeria to wipe out crude oil theft,” he stated, stressing that the military could not do the job alone.

The governor, who was the special guest of honour at the event said the international community must join in the collective efforts to check the increasing menace of oil theft in the country.

He said President Goodluck Jonathan was committed to wiping out crude oil theft, pipeline vandalism and other criminal acts bedeviling the nation’s economy, urging everyone to join hands to solve the problem.

“This crude oil theft requires the participation of all of us; some of the people who are involved in the crude oil theft and pipeline vandalism are our brothers, our friends and in some cases our heroes. We must be involved in the engagement of the people involved in these activities for them to desist from the criminal acts,” the governor said.

He said the vandalism of pipelines was impacting negatively on gas supply to power plants, which in turn has reduced available power supply in the country.

“President Jonathan has done a lot in the power sector; more power plants have been completed during his administration more than any other administration, but the challenge we have now is sabotage,” he stated.

Uduaghan commended the military for its fight against crude oil theft and pipeline vandalism reiterating that the gunboats would boost the operations of the JTF in the Niger Delta.

Also, he thanked the military for its commitment to checking insurgency in the North-Eastern part of the country, noting that President Jonathan was committed to making Nigeria safe, peaceful and devoid of criminal activities.

The governor used the occasion to call for the re-election of President Jonathan in the Saturday elections, saying that he would continue to work in the interest of Nigeria as an indivisible country.

In his address, Governor Seriake Dickson thanked President Jonathan for equipping the military, which has made it to be more proactive in carrying out its functions.

Apart from the warships recently given to the Nigerian Navy, Dickson said: “With these gunboats, the capacity of members of JTF to check the activities of criminals will be enhanced.”

Earlier, the Chief of Defence Staff, Air Chief Marshal Alex Badeh thanked President Jonathan for his support for the Nigerian Armed Forces, stating that the boats would be deployed for the economic interest of the country.

“We want peace to prevail, so trouble-makers should be warned, criminals should desist from their unpatriotic acts,” he said, adding that the fight against insurgency and criminal activities was yielding the desired results.

The Commander, JTF, Operation Pulo Shield, Major-General Emmanuel Atewe stated that the JTF, through cooperation from the riverine communities was winning the war against crude oil thieves.


The Group Managing Director, Arco Group Plc, Alfred Okoigun, has advised the Nigerian government to cut down on wasteful spending, check corruption and grow the non-oil sector in order to boost the country’s economy.

Mr. Okoigun, who said this in Abuja, also called for the formulation of policies that would encourage private sector-led investment in refineries and petrochemicals.

While international oil prices continue to wobble with oil-producing nations lacking definitive solution to the crisis, he said Nigeria could leverage on the situation to attain unprecedented growth in its economy.

“The current situation is, therefore, an opportunity for us as a nation to cut waste in government expenditure; judiciously use the lean revenue accruing from crude oil sales; put in place private sector led investment in refineries and petrochemicals; and focus attention on non-oil sectors of the economy to bolster government revenue,” Mr. Okoigun said.

“More importantly, the government must muster the political will to stop the wanton stealing of the country’s crude oil, a matter that has become an international embarrassment for our country.

“Furthermore, government must learn the habit and discipline of saving for the rainy day when another opportunity presents itself.”

Arco Group Plc, one of the leading indigenous oil and gas servicing companies in Nigeria has witnessed significant growth as a result of the nation’s local content policy.

Drawing example from Malaysia, which is not a member of the Organisation of Petroleum Exporting Countries, Mr. Okoigun said that country attained significant growth in its economy by developing the local capability of its people.
He said Malaysia is now one of the largest exporters of skilled engineers and technicians in the oil and gas industry.

With the price of crude oil hovering around US58 per barrel, Mr. Okoigun said global economic fundamentals are not giving industry watchers the confidence that oil price will rally to the pre-June 2015 benchmark in the foreseeable future.

“Nigeria has not sufficiently invested in functional refineries and petrochemical industries, electricity and other infrastructure as well as local capability,” he said.

“The implication is that even the slightest downturn in the international oil market is bound to permeate the entire sectors of the economy and worsen government finances.

“Nigeria must place great emphasis on building local capabilities. If all the petroleum products consumed in the country were locally refined, we will save huge costs, conserve needed foreign exchange, eliminate the probability of fraud in subsidy payments and maybe, generate additional foreign exchange from the export of refined petroleum products.

“Similarly with huge gas deposits, Nigeria has been endowed by nature to generate sufficient electricity for own use.”

While he acknowledged some ongoing reforms in the sector, he, however, advised government to drive the process to a logical conclusion for the benefit of the country.

He urged Nigerians not to resign to fate in the face of the nation’s economic malaise but follow the examples of Malaysia, Singapore, Indonesia, South Korea and India that exploited their difficult situations to grow their economy.

Sharing the experience of his company, Mr. Okoigun noted that when in 2007 the Niger Delta crisis got to a frightening dimension, the expatriates maintaining gas turbines and compressors for one of the International Oil Companies,[IOCs] were evacuated from the site.

“After they left the country, the responsibility to maintain these sophisticated equipment fell on Arco’s engineers and technicians,” he said.

“Because Arco has sufficiently developed local capability through training and capacity building, these young Nigerians kept the plants running in the absence of the expatriate engineers and technicians.

“It was a pleasant surprise that these young professionals performed creditably and they were commended for this feat.”

Also during the Niger Delta crisis, he said Nigerian sailors who were highly qualified like their expatriate counterparts, but were hitherto looked down upon, were called in to crew and manage the vessels.

They creditably discharged the responsibility to the amazement of those who had been skeptical about their abilities.

Today, Nigeria has reduced the operational costs of its vessels by over 40 percent because indigenous operators are now playing major roles in the marine sub-sector.

Mr. Okigun commended the Federal Government for mustering the political will to enact the Nigerian Oil and Gas Industry Content Development Act.

“The law has created the platform for us to address the attempts being made in some quarters to prevent Nigerian companies from taking their rightful places in the Nigerian oil and gas sector,” he said.

“We request that government gives sufficient empowerment to those agencies charged with the responsibility to monitor compliance with the law in order to ensure that the law is implemented without fear or favour.”


President Goodluck Jonathan pacified rebels who sabotaged lucrative supply of crude but forthcoming elections could disrupt the peace pact

Reuben Wilson’s militant days of stalking Nigeria’s swamps in search of oil pipelines to blow up are well behind him.

But former Niger Delta insurgents like Wilson say they’re ready to take up arms again if President Goodluck Jonathan doesn’t win elections this week. A son of the oil-rich Delta, Jonathan brokered a gilded pacification deal in 2009.

Though almost all eyes are turned northwards, where Islamists Boko Haram have waged a bloody six-year battle, complex ethnic and political rivalries in the south magnified by elections could reignite fighting that once gripped Nigeria.

“For many years, we fought in the creeks because we were sidelined even though Nigeria’s wealth comes from here,” said Wilson, thumping a fist on a desk cluttered with awards – mostly from organisations he funds with money the government pays him not to bleed oil pipelines.

A clue to his former life lies in an incongruous walkie-talkie among the smartphones on his desk. He uses it to order a whisky – it’s 9.30 in the morning. A man dashes in and pours the drink, his AK47 bumping against his thigh.

Despite providing more than three-quarters of government revenue, the Niger Delta had not produced a Nigerian president since independence from Britain in 1960 until Jonathan inherited the job in 2009 before being returned by election in 2011.

His 2009 amnesty programme ostensibly pacified rebels whose siphoning of oil pipelines – alongside kidnappings and bombings – sometimes slashed output to less than a quarter of the 2m barrels per day pumped in Africa’s largest oil producer.

In return for laying down arms, militant commanders receive lucrative contracts and multimillion dollar payments from the government each month, which are supposed to be shared with their foot soldiers.

The arrangement was due to expire last year but payments were extended for fear of a backlash. Some analysts believe the deal could be scrapped under Muhammadu Buhari, the main opposition candidate from the north of Nigeria.

“The money they use in taking care of this country comes from the Niger Delta,” said Wilson, who is known as Ex-General Pastor in a nod to his former days as a travelling preacher. “Now we say we want our person to be at the top, otherwise we will return to the creeks, and what Nigeria saw before will be child’s play.”

This war of words also reveals the simmering potential of armed groups to derail democracy in Africa’s most populous nation.

“We’re in the middle of an election where these fellows are declaring if we don’t vote their guy, they’re going to burn this country down,” said Folarin Gbadebo-Smith from the Centre for Public Policy Alternatives in Lagos. “In the worst-case scenario, these are the seeds of secession and civil war.”

But it is not only militants who feel it is the delta’s right to field a president for another elected term despite an informal deal that power should rotate between north and south every two terms. The delta has long felt left out of the oil riches that have made fortunes for many Nigerian politicians but returned little to ordinary people beyond catastrophic pollution.

The region’s plight shot to international fame in 1995, when northern military dictator Sani Abacha executed environmental campaigner Ken Saro-Wiwa.

When Jonathan held a rally in his home state of Bayelsa, the biggest cheers were not for the president but for Mujahid Dokubo-Asari, another former militant. Dressed in the traditional white of a local cult of warriors, he cruised through the throng in an open-top Mercedes 4x4, flashing a victory sign.

“I don’t have any natural attachment to Nigeria as a nation. My allegiance first and foremost is as an Ijaw man from the Niger Delta,” he told the Guardian a few hours later, lounging in an opulently furnished government guesthouse.

“The bigger tribes feel they have the divine right to rule others in Nigeria. But he who pays the piper must dictate the tune, and the delta has been paying the piper for so very long. We can make war if we have to,” added Dokubo-Asari, whose Niger Delta People’s Volunteer Force pushed oil prices to record highs in 2004 with attacks and threats on the oil industry.

Former militants such as Dokubo-Asari have become multimillionaires on government contracts but there’s little sign of money trickling down, with Bayelsa having a distinctly sleepy, provincial air. Meanwhile, flagship electricity and education projects have had barely any effect in communities such as the small canoe-making village of Otuoke, where the president was born.

“You can’t take photographs here,” insisted the guard in front of the sprawling mansion built by the president, by far the grandest building in the village. “It may end up in the papers and then people will start talking.”

On a street nearby, Janet Ebi shelled periwinkles picked from the murky swamps close to the compound where Jonathan grew up. “Of course, we will still vote for him because he’s our brother but, honestly, I can’t say we’re happy,” she said.

“This is the president’s home town and you can see how it looks. See us sweating here because there’s no electricity,” she added, gesturing at the ramshackle pile of tin-roofed homes.

A few metres away, the only lights on belonged to the pair of smart two-storey houses Jonathan built for his parents.

Political uncertainty over Nigeria's election on Saturday and economic turmoil from low oil prices have delivered a double blow that has slashed revenues and triggered layoffs for businesses across Africa's biggest economy.

But while some, such as consumer goods firms, are less exposed to Abuja's troubles, others like construction firms heavily dependent on government cash are facing frozen projects, unpaid bills and mass redundancies, putting badly needed infrastructure development on ice, industry sources say.

"The situation is terrible and there is more ... to come," one construction industry source told Reuters.

"There is a desperate lack of funds."

The fall in world oil prices to $55 a barrel, half what they were in June, could not have come at a worse time for Africa's biggest producer. The run-up to an election is traditionally when government finances come under huge pressure from election spending on advertising and patronage.

Standard and Poor's ratings agency downgraded Nigeria to B+ from BB- last week. The naira has fallen 20 percent since being devalued in November.

Because this vote is expected to be so closely fought, much more money has been needed to fight it. Capital spending in the budget has been slashed and a source in parliament said government contracts are massively in arrears because it is easier not to pay contractors than to hold back salaries.

The top 10 construction companies in Nigeria accounted for 70,000 jobs a year ago but since then their workforces have been cut by a third, industry sources said.

"Most of the companies tightened their belts because of no payments, while overheads are getting higher," expatriate civil engineer Daniel Hazim said.

"That's why the majority of construction companies are passing pink slips to their employees ... expats and locals."


Thousands of job losses are bad timing for President Goodluck Jonathan's re-election bid, but they may do little to sway an electorate divided along regional and ethnic lines. Jonathan, a southern Christian, faces main opposition candidate Muhammadu Buhari, a former military ruler and a northern Muslim.

Yet the job losses are also a reminder that whoever leads Nigeria after the election will need to end its dependence on oil as the motor for the economy.

"We have neglected agriculture, solid minerals, we have neglected human empowerment, we simply sell oil," political analyst and lawyer Onyebuchi Emenka told Reuters TV on Monday.

The country needs a candidate who will diversify the economy, he said.

In the meantime, contractors are suffering. A spokesman for the Ministry of Works said it had received only 44 billion naira out of 98 billion naira allocated last year.

The minister, Mike Onolememen, was quoted in local newspapers as saying that contractors were owed about 230 billion naira between 2011-2014 and that 177 projects lacked sufficient funding to move forward.

Leading construction firm Julius Berger and several other large firms have all stopped working on projects such as roads and bridges because the government is not paying them, industry sources say.

Firms with a smaller presence, such as Italy's Salini Impregilo, which is building Abuja's glitzy Millennium Tower, are in similar difficulties. Julius Berger declined to comment and Salini officials were not immediately available for comment.

Government infrastructure projects always moved slowly, but firms were forced to scale down to skeleton crews last year and several are not expecting to resume work in 2015 at all.

A project to rehabilitate the 340 km (200 miles) Itakpe-Ajaokuta-Warri railway to transport iron ore and coal, crucial to revamping an ageing steel mill, restarted work in August 2014 but was shut down again when funds dried up, a source close to the project said.

Now it will remain on hold until the government can fund it.


Credit agency Standard & Poor's downgraded Nigeria's rating to B+ from BB- on Friday, saying the decline in oil prices in the past seven months had significantly affected the country's finances.

Setting a stable outlook on the new rating, it also said political risk was a significant factor while the country's non-oil sector would support economic growth.

Nigeria holds a presidential election on March 28 when Goodluck Jonathan will seek another term. He faces former military ruler Muhammadu Buhari in what is expected to be the tightest ballot since the start of civilian government in 1999.
S&P said that while the west African country had taken numerous measures to counteract the effects of falling oil prices, such as tightening the 2015 budget and monetary policy, it believed the tense political atmosphere might undermine efforts to introduce other measures.

"The tightly contested general elections and potential underperformance on oil production may pose risks to the implementation of the federal economic management team's proactive and ambitious fiscal consolidation plans," it said. S&P noted that Nigeria relies on oil and gas for about two-thirds of its fiscal revenues and over 90 percent of its exports, and that falling oil prices had notably impacted current account position.

But it added that the fastest growing sector, services, now accounted for more than 50 percent of GDP while oil and gas had shrunk to 14 percent.

An average current account deficit of 1.8 percent of GDP was expected for the period 2015-2018, it said, and annual economic growth was expected to average 5 percent in the same period. The growth forecast was down from S&P's September report that expected a rate of 6.2 percent for the 2015-2017 period.

Halliburton Co. and Baker Hughes Inc. plan to begin seeking buyers next month for as much as $10 billion in assets that the oil-services companies need to sell in order to complete their merger, people with knowledge of the matter said.

The companies are planning to unload at least four batches of overlapping business lines in order to win approval from the U.S. Justice Department for their $34.6 billion combination, said the people, who asked not to be identified because the matter is private. These include Halliburton’s drill bits and directional drilling operations and Baker Hughes’s cementing division, the people said.

They also plan to sell a bundle of their completion-tools lines, the people said, and could select financial advisers to oversee the sales by the end of the month. The divestments are needed to satisfy antitrust concerns.

Halliburton has said it would sell businesses that account for as much as $7.5 billion in revenue for regulatory approval. Halliburton and Baker Hughes, the world’s second- and third-largest oilfield services companies, are creating a larger footprint with a broader technology portfolio to better compete against Schlumberger Ltd., which will be about twice the size of the combined companies.

Baker Hughes said in a filing this week it attracted attention late last year from a “global conglomerate” in assets it may end up having to sell as part of the deal with Halliburton.

A representative for Baker Hughes declined to comment, while Halliburton said in an emailed statement that it is too early in the process to determine what units may be divested.

Drill Bits

Halliburton’s drill-bits business, which manufactures the tips of drills for digging wells, is worth as much as $2 billion, the people said. Its drilling arm, Sperry Drilling, which uses data to track and steer the direction of drill bits, is worth up to $3 billion, they said. Baker Hughes’s cementing arm creates the permanent structure of a well after it is carved into the rock, and could fetch about $1 billion, the people said.

The completion-tools operations, which could include offshore sand control and various other gear used to finish the well before production, could sell for as much as $5 billion, they said.

Halliburton and Baker Hughes will each hold special meetings on March 27 to allow shareholders to vote on the deal.

In January, both reported higher earnings for the last quarter of 2014 as they prepared for a downturn in the industry. Even as they beat analysts’ profit estimates, the companies are reducing their workforces and seeking to lower costs after oil prices dropped by half from a June high.

Halliburton is cutting as much as 8% of its global workforce of more than 80,000. Schlumberger has announced cuts of 9,000 jobs and Baker Hughes has eliminated 7,000 positions. Weatherford International Plc has announced 8,000 dismissals.


The Nigerian National Petroleum Corporation (NNPC) has objected to the latest claim by the Emir of Kano, Muhammadu Sanusi II that $20 billion from crude oil sales has still not been accounted for, despite the conclusive findings of the Senate Committee on FINANCE and PricewaterhouseCoopers (PwC) that no such money was missing.

The former CBN governor had appeared on the CNN programme Amanpour Wednesday during which he told its anchor Christiane Amanpour that the issues surrounding the missing $20 billion had not been adequately addressed by the federal government.

Elaborating, he said no one had accounted for the billions of dollars paid in kerosene subsidy, which was not approved by the National Assembly.
Sanusi also blamed Nigeria’s economic crisis caused by the fall in oil prices, a choppy STOCK MARKET, and the devaluation of the naira, on the mismanagement country’s of oil revenue.

“My position in the central bank was that there was always this gap of $20 billion after reconciliation between what the NNPC exported and what it deposited into the Federation Account. I raised a number of issues that I think have not yet been discussed and addressed sufficiently.

“One of them is the billions of dollars being paid in kerosene subsidies without appropriation by the National Assembly and against a presidential order and we don’t know who authorised those payments and yet no one has owned up to say, ‘I authorised the payments, I made a mistake, it must stop.’

“I think those issues need to be addressed and until we address them and begin to close all the loopholes in government revenues, we are going to continue to create opportunities for the destruction of the economy.

“It could be $20 billion at the end of the day. After reconciliation it could amount to $14 (billion) or $12 (billion) and I think these issues reflect unconstitutional and illegal withholding of revenues from the Federation Account.

“The country is paying the price today; oil prices have crashed, the currency has been devalued, THE STOCK MARKET has collapsed, government revenues are in a very bad shape. Whoever wins, whether this government or the opposition, will have to deal with these issues. The petroleum sector is a major drain on the resources of the country and this has to be looked at,” he told Amanpour.

However, reacting to his statement yesterday, the Group General Manager, Public Affairs of NNPC, Ohi Alegbe, termed Sanusi's claims as false, stating that the issues surrounding his allegation of unremitted oil revenue by the corporation had been adequately addressed.

NNPC said the emir got it wrong again in the same way his failure to grasp the issues of remittances to the Federation Account led him into the embarrassing error of alleging that NNPC failed to remit $49.8 billion oil revenue into the Federation Account, an allegation which has since been dispelled even by his own account.

“According to the royal father, ‘one of them (issues) is the billions of dollars being paid in kerosene subsidies without appropriation by the National Assembly and against a presidential order and we don’t know who authorised those payments and yet no one has owned up to say I authorised the payments, I made a mistake’.

“But it is on record that he (as CBN governor) attended the hearings of the Senate Committee on FINANCE where the issue of the kerosene subsidy was exhaustively looked at vis-à-vis the presidential memo directing the removal of kerosene subsidy,” the statement from the corporation said.

NNPC stated that the explanation was that the process of implementing the presidential directive was not followed through by the Minister of Petroleum Resources at that time as required by law which technically meant that kerosene subsidy was not removed.

It added: “It was on the basis of this that the Senate Committee on Finance, in its report, recommended that the executive should prepare and present to the National Assembly a supplementary budget to cover the expenditure in the sum of N90.6 billion for PMS (premium motor spirit) subsidy in 2012 and N685.9 billion for kerosene subsidy expended without appropriation by the National Assembly.

“PricewaterhouseCoopers also observed in its recent forensic audit report thus: ‘Regarding the issue of subsidy on DPK (kerosene) the presidential directive of 19 October, 2009, was not gazetted and there is no other legal instrument cancelling the subsidy on DPK’.”

NNPC reminded Sanusi that the senate committee had also concluded that all that was required was for the federal government to propose appropriation for the unappropriated subsidy for the period in a supplementary budget.

“We are therefore at a loss as to what Sanusi meant by his statement that issues surrounding his allegation of unremitted $20 billion, especially regarding kerosene subsidy, had not been adequately addressed,” NNPC said,

The corporation also explained that Sanusi began what it tagged a campaign of calumny against it with a false alarm that it failed to remit a whopping $49.8 billion, being proceeds of crude oil sales into the Federation Account from January 2013 to July 2013, adding that he had gone ahead to throw up unconfirmed figures.

“Upon reconciliation of the figures with the relevant agencies whereupon it was discovered that the balance of unremitted oil revenue was actually the amount spent by the corporation on its operations, in accordance with the law (NNPC Act), Sanusi began to play games with figures submitting at various times that $10.8 billion, $12 billion and $20 billion was what was unremitted by the corporation.

“Both the Senate Committee on Finance and PricewaterhouseCoopers have investigated the allegations and came out with reports exonerating the corporation.

“So why the emir appears hell bent on hanging the tag of corruption on the corporation even when all the inquiries into his allegation of unremitted funds have proved otherwise remains a mystery to us,” NNPC stated.

It observed that Sanusi’s dignity would be best served and preserved if he owned up to his error of raising a false allegation and apologised rather than continuing in error believing that if he continues to harp on his false allegation it would someday be accepted as the truth.

During the Amanpour interview, Sanusi also stated that Nigeria must do something about the endemic corruption in the country if the country is going to survive, adding that for a long time the Nigerian state had been a captive to vested interests and rent seeking.

He warned that the Nigerian political elite must recognise that if this does not change Nigeria cannot survive indefinitely.

According to him, “We cannot continue like this. There has to be INVESTMENT in capital, there has to be investment in infrastructure, power, education and healthcare. The state cannot just exist to make a very few people rich.

“Corruption is an old terrain in Nigeria, the perception has always been bad. I don’t think we have done enough by being in denial. I have spoken a lot about this in the past, I don’t want to say too much because we are close to an election, and I don’t want to be accused of getting into politics.”

Also, in responding to a question on the threat on his life by Boko Haram, Sanusi said he was ready to give his life if that would stop the sect from killing innocent Nigerians.

“If I had a way of knowing that if Boko Haram takes my life they will stop killing people in Nigeria, I will give up my life. I have nothing else to live for; I have achieved everything I wanted to achieve!

“I think the most important thing is for every Muslim leader to speak up and for the Muslims to let people know that this is not Islam, for the society not to accept them, for the society not to give them accommodation, for the state to protect the people to the best of its ability and for genuine grievances to be addressed,” he said.

Sanusi also blamed the huge gap between the rich and the poor in Nigeria for the insurgency stating: “We have a very unequal society vertically and horizontally.

“There is a lot of poverty and unemployment, there are conditions that have been created for youths to be radicalised. All of these have to be addressed at the same time, but silence and fear will not be the solution and will not stop them from targeting leaders.”

International rating agency, Standard & Poor’s, yesterday, warned that Nigeria’s economy is in a “clear and present danger,” even as data released by the National Bureau of Statistics, NBS, revealed that Nigeria earned N12.8 trillion from crude oil export in 2014.

The rating agency, in a presentation by Konrad Reuss, Regional Manager, sub-Saharan Africa, put Nigeria on a negative sovereign ratings watch, BB minus.

According to Reuss, the factors putting the Nigerian economy in danger include the Boko Haram insurgency, the fall in oil prices, because of the importance of oil for government and export revenues, as well as the forthcoming elections.

Reuss explained that Standard & Poor’s rated Nigeria based on its six main categories and found out that Nigeria was weak in three classifications, namely: institutional and governance effectiveness, economic structure and growth, fiscal flexibility and performance.

In addition, Reuss who was addressing a seminar on Nigeria in Sandton, north of Johannesburg, said Nigeria was classified as neutral in external liquidity and international investment position and monetary flexibility, while its only area of strength was in its debt burden.

Structural weakness

Reuss explained that the reason economic structure and growth was identified as a weakness was because of weakness in the structure of the economy and not the country’s growth rate, adding that the structural problems were not being offset by the good growth.

Despite the uncertainty over the forthcoming elections, Reuss, however, cautioned that elections did not automatically deliver bad results, adding that they could deliver good ones.

He said: “Despite these concerns, Nigeria remained in the middle of the sovereign ratings rankings for Africa. Notwithstanding the negative watch, I like Nigeria, it is a diversified economy. It has an interesting private sector.

“Ratings are really about credit-worthiness. If we did downgrade Nigeria, it would have little effect on its borrowing.

“It would be more an issue of the country’s image. From a debt perspective, even if there was a downgrade, Nigeria would still look solid.”
… earns N13trn from crude oil export

Meanwhile, the NBS, in its Foreign Trade Statistics for the Fourth Quarter of 2014, released yesterday, estimated that with an export of N12.8 trillion, crude oil accounted for 74.4 percent of Nigeria’s total export of N17.204 trillion in 2014.
Specifically, NBS said: “On an annual basis, the total exports of Nigeria stood at N17.204 trillion at the end of 2014, representing a rise of N2.959 trillion or 20.8 percent over the level in 2013.

“The structure of Nigeria’s export is still dominated by crude oil exports. The contribution of crude oil to the value of total domestic export trade amounted to N12.791 trillion or 74.4 percent in 2014 (estimate figures).”

NBS stated that the highest export product for Nigeria in 2014 was mineral products, which accounted for N15,718.0 billion or 91.4 percent.

It said: “Other products that contributed immensely to Nigeria’s exports include vehicles, aircraft and parts thereof, vessels and so on, and products of the chemical and allied industries whose values stood at N357.7 billion or 2.1 percent, and N315.6 billion or 1.8 percent, respectively, of the total exports of Nigeria for the year.”
NBS data revealed that in the first quarter of 2014, crude oil export stood at N3.234 trillion, while non-crude oil export stood at N735.865 billion.

In the second quarter, crude oil export rose slightly to N3.269 trillion, while non-crude oil export also rose to N1.413 trillion.

In the third quarter, crude oil export dropped to N3.15 trillion, compared to non-crude oil exports, which rose to N1.549 trillion.

- See more at:

Barclays energy analyst Miswin Mahesh sees a “huge risk” of oil production in Nigeria being disrupted by political instability arising from elections scheduled for March 28.

The vote is set to be the most closely contested since the end of military rule in 1999.

President Goodluck Jonathan’s People’s Democratic Party and former military ruler Muhammadu Buhari’s All Progressives Congress are the leading contenders.

Each won 42% support in a survey of 2,400 adults polled by Afrobarometer in December in 33 of the nation’s 36 states and the federal capital territory.

“We are not sure how it will play out on the political front,” Mr Mahesh, based in London, said, adding: “Nigeria will do whatever it takes to maintain its production.

“The risks are still there. There is a genuine risk that we might see some disruptions.”

Nigeria’s daily output of about 2million barrels of oil makes it the continent’s largest producer. Crude generates more than 90% of the nation’s foreign-exchange earnings.

About 800 people were killed and at least 75,000 forced to flee their homes after elections in 2011 that brought Jonathan to power. Gunmen attacked an opposition rally in the southern oil-producing Rivers state last month.

Uncertainty over who will control Africa’s biggest economy after the elections and whether they will reassess oil companies’ contracts is a bigger threat to output than an insurgency being waged by militant group Boko Haram, Mr Mahesh said.

The fighting has largely been “constrained to the north of Nigeria and most of the oil is in the south,” he said.

The conflict with Boko Haram, which claimed at least 1,600 lives in January and more than 4,700 in 2014, caused the vote to be delayed by six weeks.

On March 7, three separate suicide bombings killed 54 people in the northeastern Nigerian city of Maiduguri, which has been targeted by numerous bombings and grenade attacks attributed to Boko Haram.

Teneo Intelligence, a New York-based risk-advisory service, said while it expects the March 28 vote to go ahead despite speculation that it may be delayed further or annulled altogether, its credibility isn’t assured.

“Developments on the ground suggest that the election results could be significantly compromised, potentially triggering clashes between supporters of the two main parties,” Teneo said in a March 5 note to clients.

Speculation is rife of political parties buying voter cards from poor people in their opposition’s strongholds, which would deprive them of the right to vote, it said.

Nigeria’s next government will have to contend with a slump in the international price of oil, which accounts for 70% of government revenue.

The price of Brent crude, which serves as a reference for Nigerian oil, has dropped almost 50% since June last year.

While Nigeria is a member of oil producers’ cartel Opec and wants the group to reduce output to lower a global glut and push up prices, it holds little sway over such decisions, according to Mr Mahesh.

“They will just have to get used to lower oil prices,” he said, adding: “It’s just a new reality.”

State oil producer Nigerian National Petroleum Corporation does not envisage any disruption to production, spokesman Ohi Alegbe said.

Energia Nigeria, along with its partners, is planning to develop a 30,000 barrels refinery as part of its efforts to reduce fuel import to the country.

Energia Nigeria managing director and the chief executive officer Felix Amiieye-Ofori told that the company has already identified and carried out environment impact assessment (EIA) of a land in Ndokwa area of Delta state for the construction of the refinery.

"We have the capacity to shore up our production, we stopped the Capex because of the drop in oil prices, we are still drilling our wells, assets and reserve will be increased to 15 ,000 barrels by next year."

"We know that a lot of multinational oil firms will be divesting some of their assets at the onshore concessions, we are wholly Nigerian company, we are capable to acquire some of these assets when the owners are willing to divest."

Currently, the company produces 6,000 barrels of crude oil per day.


Oando Energy Resources has commenced production of crude oil from the Qua Iboe field, following the completion of all civil and pipeline works and associated crude delivery and sales infrastructure, with commercial production at 2,150 barrels of oil equivalent per day (boepd).

Oando Energy Resources holds a 40 per cent working interest in the field.

In its capacity as the technical services provider, the company, alongside the operator and 60 per cent owner, Network Exploration and Production Nigeria Limited (NEPN), brought the field from conceptualisation, through development, to first oil delivery.

According to a statement yesterday by Oando, the commercial oil production from the field’s reservoirs has now commenced at an initial rate of 2,150boepd gross to the partners.

“The crude processing facility was commissioned in the fourth quarter of 2014 but commercial production was delayed until the completion of the associated cluster crude delivery and sales infrastructure into the Qua Iboe Terminal,” the statement said.

The Chief Executive Officer of the company, Mr. Pade Durotoye, said the company was delighted to achieve the feat.

“We are delighted to have achieved this milestone, having taken this field through the full cycle of asset development, from drilling to facility engineering, construction and commissioning, and also increasing our organic production contribution from our portfolio,” said Durotoye.

“We will now be focusing our attention on maturing the potential of this field through seismic acquisition and interpretation, and a possible multi-well drilling programme.

“We hope the Qua Iboe field will follow in the footsteps of our successful Ebendo field, where production has increased from 900bopd (gross) at inception to over 7,500bopd (gross) through the identification and drilling of new reservoirs in the field,” Durotoye added.

Oando identified the asset in 2012 and an agreement was reached with NEPN for Oando to technically lead and fund certain aspects of NEPN’s costs until first oil.

Consequently, post-recovery of all loan repayments, Oando is entitled to 90 per cent of NEPN’s sales proceeds from its 60 per cent share of crude oil production until NEPN’s obligation is paid in full, with Oando earning an additional 10 per cent fee on the funded amount.

The Nigerian National Petroleum Corporation (NNPC) on Friday said that the country's power supply would drop by 1.5 gigawatts due to Monday's destruction of gas pipeline in Gbaramatu, Warri in Delta.

The Managing Director, Nigerian Gas Company, Mr Dafe Sejebor made this known to newsmen after a tour of the vandalised facilities in Inikorogha, Ubefan and Balan in Gbaramotu Delta.

The managing director who was represented by the Executive Director Services, Mr Joseph Olisa, said the nation would lose N2.5 billion within 21 days that the gas supply would be restored.

He explained that whenever there was destruction on pipelines it affected production and stopped supply of gas thereby leading to loss of revenue.

"When these pipelines are tampered with the gas volumes that are supposed to be sent to the power plants are lost.

"Whenever it happens we lose up to 1.5 gigawatts to the national grid.

"That is colossal in terms of cost volume of almost 200 million standard cubic feet of gas being lost per day," he said.

While expressing regrets over the spate of vandalism on gas pipelines in the recent times, the managing director described the act as economic sabotage.

According to him, the recent vandalism which is on the Escravos Lagos Pipeline System (ELPS) is core to the nation's power supply.

He said the pipeline was the heart beat or the core of pipelines that took gas to the western part of the country.

"The truth is that we have been having vandalism but the spate at which it is happening now is alarming.

"In the past few weeks we have really had it so bad that it is impacting negatively on power generation in the country.

"The core fuel to most of the power plant in this country is NGC gas, so if we cannot take power to the power plant generation suffers," he said.

He said the bleed being experienced in the generation and availability of power in the country was due to activities of vandals.

He, therefore, called on the host communities and other stakeholders to help the government in stemming the spate of vandalism in their areas. (NAN)


The latest crisis in petroleum products marketing in Nigeria has again raised the debate on the deregulation of the downstream sector of the oil industry, reports Festus Akanbi

When fuel queues resurfaced in Lagos and Abuja penultimate Saturday, some of the stakeholders fell into the familiar frenzy of blame game. For many people, fuel users who were caught napping as endless wait at filling stations became the order of the day could not understand why petrol could suddenly dry off from marketers’ tanks overnight.

Interestingly, the blame game continued till the weekend as officials of the Nigerian National Petroleum Corporation (NNPC) claimed they were running from pillars to posts to ensure adequate volume of petrol is pumped into the affected parts of the country without further delay.

Given the prevailing tense political atmosphere on the run up to the March 28 election, members of the economic community were not surprised that the blame game is taking some political colouration with several allegations being thrown up by the two major political parties. These include alleged sabotage by the opposition said to have incited fuel marketers to halt importation. It also includes allegation of corruption and the failure of the government to pay marketers their outstanding subsidy fund.

In the midst of this cacophony of voices came a more scientific explanation for the current fuel scarcity, with fingers being pointed at the recent devaluation of naira which makes importation very expensive. The unfavourable exchange rate is said to have wiped out marketers’ margins, a development they said make importation of petrol at the current price unprofitable. Added to this is the grievance over unpaid subsidy differential by the government.

However, oil marketers, who are at the centre of the current controversy believed the only antidote to frequent scarcity of fuel in Nigeria is an outright deregulation of the downstream sector.

According to an oil industry expert, Mr. Abubakar Ibrahim, the NNPC was quick to dissociate itself from the scarcity thus: “The long queues have nothing to do with the unavailability of products in the depots as erroneously being speculated. The NNPC/PPMC fuel supply chain remains robust with enough products to last till the end of the year and beyond.”

The NNPC explained that “the artificial scarcity has its roots in a recent directive issued to Petroleum Tanker Drivers, (PTD), by the national leadership of the National Union of Petroleum and Natural Gas Workers, NUPENG, to stop bringing to Suleja and also to stop product supply to Abuja to protest a long standing contractual issue between the management of MTEL and Petroleum Tanker Owners. The tanker drivers and NUPENG are also demanding the repairs of access roads to the depots as a pre-condition to resuming loading of products”.

The half-hearted and ad-hoc measure, has not addressed the issue at stake, namely bad roads for which the government should not have waited to be raised by tanker drivers. Tanker drivers have protested many times before now over bad roads across the nation that hampers their smooth operation, especially during the rainy season.

While the issue remains totally unresolved, NUPENG and the Petroleum and Natural Gas Senior Staff Association of Nigeria reportedly kicked off a nationwide strike to protest failure of the Federal Government to carry out turnaround maintenance of the nation’s four refineries and reduction of the pump price of petrol following the slump in the global prices of crude oil. While some of the reasons advanced for the strike are understandable, they are not something that could be addressed overnight.

Calls for Deregulation Resurface
Although, the Federal Government had on several occasions tried to make the industry market driven, a combination of poor consumer education, lack of transparency and politicisation of the policy aborted the move.

The argument is, a regulated market cannot attract private sector participation, a development attributed to the reluctance of local investors to commit their resources to the construction of private refineries.

It is an irony that Nigeria, with its crude oil deposits and four refineries was recently adjudged to be the biggest importer of refined petroleum products in the African continent, creating a lucrative market for refineries particularly in Europe and the United States (US).

Its refineries include two in Port Harcourt. These are Port Harcourt Refining Company (PHRC 1 & 2), Kaduna Refining and Petrochemical Company (KRPC) Warri Refining and Petrochemical Company (WRPC). Nigeria’s four refineries with a combined capacity of about 445,000 barrels per day (bpd) have for long been operating far below their installed capacity as they are in various states of disrepair. The four refineries operated at an average of 31.1 per cent of capacity in 2012, according to recent data from the Central Bank of Nigeria.

It imports more than 80 per cent of its refined petroleum products for the servicing of its economy, because of its inadequate domestic refining capacity.
The country’s fuel needs is put at 35 million litres daily, equivalent to 279,000 bpd, while crude oil production averages about 2 million bpd.

Despite gulping billions of dollars, successive rounds of turnaround maintenance (TAM) have failed to expand domestic refining capacity, while the subsidy structure of fuel sales incentivises the import of premium motor spirit (PMS) from EU refineries, which oversupply the European market.

As KPMG notes in its 2014 Africa Oil and Gas Report, problems in the refining industry on the continent include corruption, poor maintenance, theft, and other operational problems. “Subsidies have also contributed to low capacity utilisation at refineries. In Nigeria, for example, current subsidy schemes lead producers to sell crude overseas rather than to local refineries and therefore add to increasing volumes of refined product imports, which present a large cost to the economy.”

A number of private companies have expressed readiness to step in to build and operate their own refineries, but their efforts have often been delayed or cancelled, partly due to uncertainties around the government’s plans to deregulate the downstream sector.

Private Initiatives
Aliko Dangote, Africa’s richest man and business mogul, who has taken concrete steps in building a $9 billion refinery/petrochemical/fertiliser complex in Nigeria, is one of the leading lights in the private sector ready to invest in refineries. Dangote’s refinery will initially have a capacity of 400,000 bpd, doubling Nigeria’s refining capacity as well as cut imports of refined petroleum.

However, the fuel marketers who are leading the current campaign for the deregulation of the downstream sector of the petroleum industry also wants a strong regulator in the mould of the Nigerian Communications Commission (NCC), which is the apex regulator in the telecoms industry.

According to Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Mr. Obafemi Olawore, only deregulation would encourage the establishment of private refineries in the country.

“There is one vital step that needs to be taken and that step, if not taken, there is no grammar anybody can speak that will encourage local refining. That step is that you don’t cap any product and expect any businessman to go in there. Once you cap the price at N97 per litre, then what you are saying is that no matter somebody’s production cost, he should not sell above N97 because N97 is sacrosanct. If he sells above N97, he will be in trouble,” he said.

He called for the passage of the Petroleum Industry Bill (PIB) to usher in deregulation, adding that even if the current PIB is not perfect, it can be amended after the passage.

“Once you deregulate, these refineries will be coming up. So, we will plead that we get the National Assembly to pass the Petroleum Industry Bill (PIB). We believe that the PIB will go a long way in encouraging deregulation but if we want a PIB that will be faultless before it will be passed, and then we are thinking that we are not human beings. Why do we have the word amendment? How many amendments have they done on the American constitution?

American constitution has experienced so many amendments. It is better to pass it and as we go ahead, if there is any need to do amendment, we do the amendment,” he explained

“But I need to also add as I always tell you that deregulation should not mean that marketers can do anything they like with pricing. There must be a framework for regulation and that is why I prefer what NCC does to the telecommunication industry, instead of what our own regulators are doing. Our regulators should be empowered and should be bold and they should be able to call people to order. It is not saying on the pages of newspapers that “I have shutdown petrol station.”

He added that “there must be a framework. I don’t know whether they actually got their money back or not but there was a time I read that NCC fined some of these telecoms companies some huge amount of money for breaching some rules. That should be it. So, there should be complete deregulation and the regulators should be empowered to carry out their functions,” Olawore added.

According to him, the government should not interfere in the works of regulators so as to ensure that erring operators are sanctioned appropriately.

“When you have this interference, then you have a situation where if marketer A is sanctioned by a regulator, then he now goes to the government and before you know it, the sanction is reversed. It should be such that when a regulator applies sanction, it stands by the sanction and let the company that erred pay the price for it,” he added.

More Commitment
In the midst of this strident call for deregulation and the setting up of a regulator to monitor the activities of fuel marketers as reported by THISDAY last week, analysts believe more commitment of the federal government will also be needed to drive the policy.

This is because, the over 50 per cent drop in the price of crude oil in the international market, which effectively forced a decline in the prices of petroleum products, oil marketers has failed to deter fuel marketers from selling Automotive Gas Oil (AGO) or diesel at exorbitant prices, taking advantage of the deregulation of the product to defy the Petroleum Products Pricing Regulatory Agency (PPPRA).

With the drop in the international crude oil price from $115 per barrel in June 2014 to less than $60 per barrel, the expected  market price of Premium Motor Spirit (PMS) or petrol also dropped from  N141 per litre to N97.90, prompting the federal government to reduce the official pump price from N97 per litre to N87.

As diesel is a deregulated product, whose price is dictated by market dynamics, the PPPRA also recommended the expected open market price to reflect the slump in the price of crude oil but the marketers have consistently ignored the PPPRA’s directive and have continued to sell diesel at high costs.

For instance, the PPPRA recommended N129.08 as the expected open market price in its latest pricing template released shortly before the weekend.

But THISDAY gathered that since the slump in the price of crude, the price of diesel has never dropped as it is still being sold between N156 and N145 per litre by the marketers.

The marketers, it was gathered, took advantage of the fact that since diesel is a deregulated product, the government cannot control the price.

The government had in January 2009 deregulated the prices of diesel and Low Pour Fuel Oil (LPFO), thus leaving the prices to the dictates of the forces of demand and supply.

Exactly two days after the deregulation, the ex-depot price of diesel rose from N60.16 per litre to N73.50 per litre while LPFO, otherwise called black oil, used by industries to generate steam for their boilers, also rose from N25.40 per litre to N44.70 per litre.

Since diesel was deregulated, the pump price has been going up, despite the volatility of crude oil prices.

But Olawore, who rose in defence of the marketers, argued that the price of diesel did not go down because of the devaluation of the naira.

“The unfortunate situation in which we find ourselves is that as the price of crude oil was dropping – as the international price of diesel was dropping, we devalued the naira,” he said.

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