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Kaduna refinery stays dormant as NNPC loses N10.96bn

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…Senate condemns FG for non-payment of fuel subsidy claims***

The Kaduna Refining and Petrochemical Company, one of the country’s crude oil refineries being managed by the Nigerian National Petroleum Corporation, has remained dormant.

According to the corporation, the refinery’s capacity utilisation has remained at zero for months, as the KRPC is not refining crude oil despite receiving the commodity.

In its latest monthly oil and gas report for June 2018, which was obtained by our correspondent in Abuja on Wednesday, the NNPC also stated that its group trading surplus dropped from N18.11bn in May to N7.15bn in June this year.

This implies that the oil firm lost N10.96bn in terms of its trading surplus within one month.

Findings showed that the firm, however, posted a positive 2018 year-to-date trading surplus, as it made N69.31bn within the six-month period.

An analysis of the performances of the refineries showed that the KRPC received 78,833 metric tonnes of crude in the months of May and June this year.

It, however, processed no drop of crude oil in the two months, as its capacity utilisation was given as zero per cent.

The Warri Refining and Petrochemical Company processed 246,039MT and 138,310MT of crude in May and June, respectively, thus, the plant’s capacity utilisation dropped from 46.55 per cent to 27.04 per cent in the period.

For the Port Harcourt Refining Company, it was observed that the plant processed 132,595MT and 237,875MT of crude oil in May and June, respectively. This showed that unlike the other two refineries, the PHRC’s capacity utilisation moved up from 14.93 per cent to 27.68 per cent in the period.

Nigeria’s refineries have been performing poorly over time and the Federal Government often makes promises to get them fixed.

On October 18 this year, The PUNCH reported that the Minister of State for Petroleum Resources, Ibe Kachikwu, stated that the refineries would soon get investments of about $3bn.

In the meantime, the Senate has condemned the Federal Government for not paying the subsidy claims by petroleum product marketers despite approval by the National Assembly since July.

At a meeting of stakeholders called by the Senate Committee on Petroleum (Downstream) and held in Abuja on Wednesday, senators took turns to criticise government agencies for allegedly slowing down the process of paying petroleum product marketers what was owed as and when due.

The committee resolved that the Ministry of Finance should within one week call a meeting of other government agencies and the marketers to reconcile subsidy claim figures and discuss ways of fast-tracking the payment of arrears.

The stakeholders are to report back to the committee next week.

The Senate had in July 2018 approved the payment of subsidy claims totalling N348bn to oil marketing companies based on a request by President Muhammadu Buhari.

The approval followed the adoption of an interim report by the committee on the promissory note programme and bond issuance to settle inherited local debts and contractual obligations to petroleum marketers.

While approving that 55 oil marketers be paid verified figures totalling N275,750,415,108, the upper chamber of the National Assembly had asked that 19 marketers “with contentious claims and verified figures” be paid 65 per cent of their claims, amounting to N73,452,639,866, pending further investigation and verification by the committee.

The Chairman of the committee, Senator Kabiru Marafa, in his opening remarks, explained that the meeting was called to know how much the Federal Government had implemented the Senate’s resolution, the situation with the 19 marketers with contentious claims, and the solution to the continued conflict of subsidy figures between the government and oil marketers.

The Director-General, Debt Management Office, Mrs Patience Oniha, however, said that while the payments were approved by the Senate in July, the office did not receive communication from the Clerk to the National Assembly until September.

Oniha also stated that the processes through which the payments would be made were detailed in the request made to the Federal Executive Council, which was passed and forwarded to the National Assembly for approval.

According to her, the processes, which must be followed, are still ongoing and the DMO will engage the marketers by the middle of November.

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Economy

Over $23bn revenue generated by oil and gas in 2021- NEITI

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FAAC disburses N2.054trn in Q3 2020 – NEITI

 The Nigeria Extractive Industries Transparency Initiative (NEITI) said the oil and gas industry generated over $23billion in 2021.

The Executive Secretary of NEITI, Dr Orji Ogbonnaya-Orji said this while presenting highlights on the 2021 Oil and Gas report unveiled on Monday in Abuja.

According to Ogbonnaya Orji, the revenue sources included sales of federation crude oil and gas, taxes, royalties, concession rental, gas flare penalty, bonus and license fees, and transportation fees.

He said that the total revenue was also generated through dividends from NLNG, NDDC levy, NCDMB levy, Ness fee, and miscellaneous income.

According to the NEITI boss, a total of $13.2 billion dollars was remitted from the sum to the federation account.

He said that the Nigeria National Petroleum Corporation, before its transition failed to remit about $2 billion to the federation account and a total of $6.9 billion was deducted at FAAC.

Ogbonnaya-Orji said that while oil production for the year under review stood at about 566,129 million barrels per day, gas production came at over 2,743,700 million standard cubic feet per day.

He said that the sector contributed a total of 7.2 percent to the nation’s Gross Domestic Product (GDP) in 2021 with the export contribution of 76.2 percent

The executive secretary said that the Federal Government paid about $3.087 billion in cash calls as equity contributions while the outstanding cash-call liabilities payable by the federation stood at about N330.007 billion.

On data of Beneficial Owners (BO) of Assets, Ogbonnaya-Orji said that about 69 companies were covered in the production of the report and have disclosed some BO information through NEITI or CAC portal except four companies.

FAAC disburses N2.054trn in Q3 2020 – NEITI

On subsidy, the NEITI boss said about $1,159 trillion was paid by the government as subsidy between March to December 2021.

“NEITI audits revealed that between 2006 and 2021, a total of N8.149 trillion has been so far expended on petroleum subsidy, now referred to as under-recovery,’ he said.

On recommendations, he said that based on the outstanding liabilities payable to FIRS and NUPRC, the NNPC and NPCD should be investigated while other companies should promptly pay their liabilities.

Ogbonnaya-Orji said the report also recommended that a special investigation be instituted to establish the status of our non-operational refineries and value for money assessment on the refineries should be carried out.

He further reiterated the need to strengthen remediation mechanisms and involve independent third parties to conduct detailed investigations when necessary among other recommendations.

Earlier, stakeholders in the oil and gas sector commended NEITI on efforts towards ensuring transparency and accountability in the industry.

Representing the Secretary to Government of the Federation, George Akume, his Permanent Secretary on Political and Economic Affairs, Esuabana Nko-Asanye, reiterated the importance of the report to economic development.

Akume reaffirmed the Federal Government’s commitment to support and deepen the implementation of the EITI in Nigeria.

He then restated the need for security issues especially in the Niger/Delta to be tackled to reduce losses in the sector.

The Group Managing Director of NNPCL, Mele Kyari, represented by his Chief Compliant Officer, Nasir Usman, pledged the unreserved support of NNPCL to NEITI to enable it to achieve its mandate.

Representing the Minister of Budget and Economic Planning, his Permanent Secretary, Nebolisa Anako, stated the importance of data for economic planning.

He then reiterated the commitment of the government to the mandate of NEITI as the oil and gas sector was one of the major sources of foreign exchange for the nation.

The Chairman of, House Committee on Petroleum, Hon. Ikenga Ugochinyere, called for the need to amend the NEITI Act and urged for more government allocation to the initiative to enable it better carry out its mandate.

Ugochinyere also pledged the commitment of the House to work towards the implementation of the report that was unveiled today.

Similarly, the Chairmen Senate Committee on Petroleum Upstream, Etang Williams, and the Senate Committee on Oil and Gas Host Communities, Benson Agadaga also expressed commitment to stand by NEITI in implementing the recommendations of the report.

The News Agency of Nigeria (NAN) reports that the unveiling of the 2021 report, was attended by various stakeholders and partners in the oil and gas sector in the country

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Freight train haulage to carry 90 containers daily – Transportation Minister

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…Says Lagos-Kano Narrow Gauge Freight Operations Begins December***

The Minister of Transportation, Sen. Saidu Alkali, has said that the inauguration of the wagon freight train from Apapa Ports to Ibadan would move 90 container cargoes on a daily basis.

Alkali made the disclosure during the inauguration of the wagon freight train haulage at APM Terminal, Apapa, in Lagos on Tuesday.

He said that the freight train for moving cargo would decongest the ports and would also save shippers from the accumulation of demurrages.

Alkali said that the wagon would pass through one track, adding that the remaining two tracks would start to function after completion.

“The ministry is going to liaise with the Minister of Finance and the Customs, concerning the demolition of the scanning centre which is affecting the completion of the remaining tracks into the ports.

*

The Director of Operations of China Civil Engineering Construction Company, Mr Yakub Adogie, the Minister of Transportation, Sen. Saidu Alkali, and the Managing Director of Railway, Mr Fidet Okhiria during the minister’s first visit to railway facilities in Lagos and Ibadan.

“After laying the two remaining tracks, the cargoes will leave the ports respectively and the two remaining lines will enter the ports,” Alkali said.

The Managing Director of Nigerian Railway Corporation, Mr. Fidet Okhiria, said the wagon would carry 30 freights of containerised cargo on a trip from Lagos to Ibadan.

Okhiria said that the Minister of Transportation had inaugurated the freight movement of cargoes to Papalanto and Ibadan.

“We have facilities to move four trips daily but we are starting with three trips, making 90 of the 40ft containers to move out of the ports per day.

“What we are using now is a temporary transitional line, We are making headway to ensure the building gives way to make us have the three lines that are slated for this terminal.

“We are ensuring that the operation starts, so that we don’t give room for vandalisation, when the tracks are not in use then it is vulnerable to attack,” Okhiria said.

He said that if the tracks were used frequently people would see the value and respect the tracks.

The Managing Director of Bueno Logistics, Mr. Jetson Nwankwo, said that he had been working to ensure that the railway was optimally utilised and to decongest the roads.

“Currently we are partnering with the Nigerian Railway Corporation and the terminal operators to help Lagos to decongest its roads from container trucks.

“The new standard gauge line that has entered APM Terminal is a big deal, It will be able to carry at least 60 containers at a go out of Apapa complex, and if we do that every day, you will not see containers on the bridges.

“The deal is to move the containers from the Apapa Port complex to Moniya in Ibadan, where we have a very big freight terminal.

”Any truck coming to pick the truck will go to Moniya that will really decongest Lagos,”

In a related development, the Minister of Transportation, Sen. Sa’idu Alkali, has said that the freight wagon haulage on the narrow gauge from Lagos to Kano will begin in the next three months.

Alkali made the disclosure during his visit to the Kajola Wagon Assembly Plant in Ogun, on Tuesday.

He said the railway corporation was using standard gauge to carry cargo from Lagos to Ibadan. but will begin the operation from Apapa to Kano in three months’ time.

Alkali said that the Federal Government had already fixed the narrow gauge from Lagos to Kano, and will now get some locomotives and wagons to take containers from Apapa and move them to Kano

“Once we evacuate containers from Lagos, we will use the narrow gauge to move them to Kano,” Alkali said.

After visiting some of the railway facilities, the Minister directed the  Managing Director of the Nigerian Railway Corporation (NRC), Fidet Okhiria, to look into the cleanliness of the coaches, to enhance patronage on railways.

Okhiria, on his part, said that the Nigerian Shippers’ Council, being the port regulator, and the former Minister of Transportation set up a ministerial committee headed by the former Permanent Secretary of the Ministry of Transportation to look into freight charges.

He said that the purpose of the committee was to ensure the smooth operation of freight rail.

“The impact on NRC is that the terminals are charging 60, 000 per container for moving the container to the wagon freight, which is still higher than the movement on trucks, and the Shippers’ Council is working on that.

” The terminal charges are high because of the double handling; presently, moving cargo by rail is more expensive than road but is faster.

“We are looking to see how we can do it, we have minimum operational cost, and we don’t need to go and borrow money to buy diesel, that is why we are starting the freight rail movement of cargo handling now,” Okhiria said.

He said that NRC had begun the freight rail movement from the port pending when they received the order from the Minister to reduce charges.

Okhiria said that NRC was operating the rail freight with the narrow gauge before now, but stopped due to security issues.

He said the corporation would use a month to repair all the vandalised tracks on the narrow gauge, adding that the management would assemble all the wagons and service them before putting them on track.

Okhira said that NRC had about 120 narrow gauge wagons, as the Federal Government had been proactive and the corporation had placed an order through the China Civil Engineering Construction Company.

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Naira Falls, Exchanges N747.87 At Investors, Exporters Window 

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Naira further Depreciates Against Dollar by 0.09%

The Naira depreciated against the dollar on Monday as it exchanged at N747.87 at the Investors and Exporters window.

The Naira dropped by 1.01 percent compared to the N740.38 it exchanged for the dollar after the close of business on Sept. 1.

The open indicative rate closed at N772.06 to the dollar on Monday.

A spot exchange rate of N799.90 to the dollar was the highest rate recorded within the day’s trading before it settled at N747.87.

The Naira sold for as low as N730 to the dollar within the day’s trading.

A total of 74.64 million dollars was traded at the investors and exporters window on Monday

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