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Petrol Scarcity: Reps to Intervene

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petrol scarcity Nigeria

The scarcity of petrol continued on Sunday in many cities across the country, as hundreds of motorists thronged the few filling stations that dispensed the product.

This is coming as the Department of Petroleum Resources announced that it had constituted special intelligence monitoring teams nationwide to ensure prompt delivery of the product to designated filling stations.

The House of Representatives Committee on Petroleum Resources (Downstream), however, said it could not intervene until its resumption from break on April 12.

The queues at filling stations in Lagos and other parts of the country grew longer despite the petrol cargos that the Nigerian National Petroleum Corporation claimed were discharged on Friday.

For instance, many stations on the Ketu-Ikorodu road in Lagos did not sell the product on Sunday, while the few selling were besieged by desperate motorists.

Some filling stations in Lagos and Ogun states sold a litre of petrol for between N100 and N140, which was above the approved prices of N65 and N65.50 for independent/major marketers and the NNPC stations, respectively.

Many motorists and other consumers had to resort to the black market, where the product was being sold for as much as N200 per litre in some places.

The scarcity and the hike in prices resulted in astronomical rise in fares charged by commercial transport operators.

In Abuja, Nasarawa and Kaduna, petrol queues were noticed at many filling stations. For instance, the queues formed in front of the largest NNPC mega station on the Kubwa-Zuba Expressway on Sunday were massive and stretched several kilometres.

Major filling stations such  as Total, Conoil, Nipco, and Forte Oil that dispensed petrol had long queues, as motorists spent several hours waiting to be served.

But some filling stations in remote locations in Abuja dispensed the product at rates far higher than the official pump prices.

For instance, one petrol station along Byazhim Road in Kubwa, a popular satellite town in Abuja, sold the product at N150 per litre. And it was gathered that the outlet had been dispensing the commodity for that price since Friday.

Another petrol station in Apo, Abuja, also dispensed petrol at N140 per litre, but it still had long queues of motorists and other petrol seekers.

The DPR explained the functions of the newly constituted intelligence monitoring teams in a statement from its Abuja zonal office. It said, “The teams would enforce the government approved price regime and ensure the right quantity and quality of products is dispensed.

“Consequently, the department hereby directs all depots with petroleum products to truck out to designated filling stations as programmed while all filling stations in strategic locations shall continue to operate 24 hours during the Easter holidays.”

The DPR stated that the N2m sanction against depots selling products above the regulated price and the N100,000 fine per dispensing pump for filling stations found to be selling above approved rates were still in force.

It said, “Any marketer found to be hoarding will have the products dispensed free to the public and diversion of products will attract a penalty of N200/litre. In addition, the operating licences of offenders will be suspended for a minimum of three months or may be revoked outright, depending on the magnitude of the offence.”

The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr. Mike Osatuyi, told one of our correspondents that the supply to members of the association had not improved, adding that marketers should be given access to foreign exchange to import fuel.

He said, “Give genuine marketers who know the job and who have the facilities foreign exchange, and the country will be wet with products. They said they want to operate a monopoly and it has failed. It is very unfortunate that we are experiencing this again.”

The NNPC said on Friday that a cargo containing 42 million litres of petrol had completely discharged as of 4pm, adding that two more cargos with a total of 44 million litres were discharging, while another cargo containing 44 million litres had berthed and waiting to discharge.

Meanwhile, the House of Representatives Committee on Petroleum Resources (Downstream) said that there was little it could do to arrest the biting fuel scarcity in the country.

The Chairman of the committee, Mr. Joseph Akinlaja, told The PUNCH that members were already out of Abuja and would reconvene on April 12.

“We are on break till April 12. We cannot attend to that matter until the House resumes. Everybody is away now. It is when we resume that we can begin to see what can be done,” he said.

The fuel situation worsened following last Wednesday’s comment by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, that he was not a magician and could not do anything overnight to halt the scarcity.

He said the scarcity was likely to linger up until May, a comment that frightened Nigerians and led to panic-buying of petrol with the attendant extended queues at filling stations.

 

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

NNPC To Resume Oil Exploration In Sokoto Basin

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The Nigerian National Petroleum Corporation on Thursday announced plans to resume active oil exploration in Sokoto Basin.

A statement issued in Abuja on Thursday by NNPC spokesperson, Kennie Obateru, said the corporation’s Group Managing Director, Mele Kyari, said exploration for crude would resume in the Sokoto Basin.

The statement read in part, “Kyari also hinted of plans for the corporation to resume active exploration activities in the Sokoto Basin.”

The NNPC boss disclosed this while receiving the Governor of Kebbi State, Atiku Bagudu, who paid Kyari a courtesy visit in his office on Thursday.

In October 2019, the President, Major General Muhammadu Buhari (retd.), had during the spud-in ceremony of Kolmani River II Well on the Upper Benue Trough, Gongola Basin, in the North-East, said the government would explore for oil and gas in the frontier basins across the country.

He outlined the basins to include the Benue Trough, Chad Basin, Sokoto and Bida Basins.

Buhari had also stated that attention would be given to the Dahomey and Anambra Basins which had already witnessed oil and gas discoveries.

Kyari restated NNPC’s commitment to the partnership with Kebbi State for the production of biofuels, describing the project as viable and in tandem with the global transition to renewable energy.

He said the rice production programme in the state was a definite boost to the biofuels project.

Kyari said the linkage of the agricultural sector with the energy sector would facilitate economic growth and bring prosperity to the citizens.

He was quoted as saying, “We will go ahead and renew the Memorandum of Understanding and bring in any necessary amendment that is required to make this business run faster.”

The Kebbi State governor expressed appreciation to the NNPC for its cooperation on the biofuel project.

Bagudu said the cassava programme was well on course but the same could not be said of the sugarcane programme as the targeted milestone was yet to be attained.

Kebbi state is one of the states that the NNPC is in partnership with for the development of renewable energy.

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Economy

Nigeria To Benefit As G-20 Approves Extension Of Debt Relief Till December

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Finance ministers of G-20 countries have approved an extension of debt relief for the world’s poorest nations till December 2021.

David Malpass, World Bank president, made the announcement at the virtual spring meeting, on Wednesday.

TheCable had earlier reported that the G-20 countries will meet this week to consider an extension of the debt freeze.

The G-20, is a group of finance ministers and central bank governors from 19 of the world’s largest economies, including those of many developing nations, along with the European Union.

G-20 countries had established a debt service suspension initiative (DSSI) which took effect in May 2020.

Nigeria had benefited from the initiative which delivered about $5 billion in relief to more than 40 eligible countries.

The suspension period which was originally set to end on December 31, 2020 was extended to June 2021.

Malpass said the extension to December 2021 will boost economic recovery and promote job creation in low income countries.

He urged countries to be transparent in their approach to the debt service payment extension.

“On debt, we welcome a decision by the G20 to extend the DSSI through 2021. The World Bank is also working closely with the IMF to support the implementation of the G20 Common Framework,” he said.

“In both these debt efforts, greater transparency is an important element: I urge all G20 countries to disclose the terms of their financing contracts, including rescheduling, and to support the World Bank’s efforts to reconcile borrower’s debt data more fully with that of creditors.

“Participation by commercial creditors and fuller participation by official bilateral creditors will be vital. I urge all G20 countries to instruct and create incentives for all their public bilateral creditors to participate in debt relief efforts, including national policy banks. I also urge G20 countries to act decisively to incentivize the private creditors under their jurisdiction to participate fully in sovereign debt relief efforts for low-income countries.

“Debt relief efforts are providing some welcome fiscal space, but IDA countries need major new resources too, including grants and highly concessional resources. From April to December 2020, the first DSSI period, our net transfers to IDA and LDC countries were close to $17 billion, of which $5.8 billion were on grant terms.

“Our new commitments were almost $30 billion, making IDA19 the single largest source of concessional resources for the poorest countries and the key multilateral platform for support. To recover from COVID, much more is needed, and we welcome the G20’s support for advancing IDA20 by one year.”

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Economy

IMF / Fiscal Monitor Report April 2021 Forecast

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Unprecedented fiscal support by governments during the pandemic has prevented more severe economic contractions and larger job losses, but risks remain of long-term scarring the International Monetary Fund says in its Fiscal Monitor report released on Wednesday (April 7) in Washington, DC.

Meanwhile, such support, along with drops in revenues, has raised government deficits and debt to unprecedented levels across all country income groups, said Vitor Gaspar, Director of the Fiscal Affairs Department at the IMF.

The first lesson one year into COVID-19 is that fiscal policy can act timely and decisively. The fiscal policy response was unprecedented in speed and size looking across countries. We also learned that countries with easier access to finance or stronger buffers were able to give more fiscal support. They’re also projected to recover faster,” said Gaspar.

Average overall deficits as a share of GDP in 2020 reached 11.7 percent for advanced economies, 9.8 percent for emerging market economies, and 5.5 percent for low-income developing countries. Countries’ ability to scale up spending has diverged.

“So, what have we learned? We’ve learned that fiscal policy is powerful and that sound public finances are crucial in order to enable that power to be used to the fullest,” stressed Gaspar.

Gaspar urged policy makers to balance the risks from large and growing public and private debt with the risks from premature withdrawal of fiscal support, which could slow the recovery.

“In the spring 2021, we emphasize differentiation across countries. Moreover, COVID-19 is fast evolving, as are the consequences from COVID-19. The fiscal policy must stay agile and flexible to respond to this fast-evolving situation.” Said Gaspar.

He also warned that the targeting of measures must be improved and tailored to countries’ administrative capacity so that fiscal support can be maintained for the duration of the crisis—considering an uncertain and uneven recovery

“Moreover, countries are very different in their structures, in their institutions, in their financial capacity and much else. Therefore, policies and policy advice have to be tailored to fit.” Said Gaspar

Gaspar concluded his remarks by emphasizing that global vaccination is urgently needed, and that global inoculation would pay for itself with stronger employment and economic activity, leading to increased tax revenues and sizable savings in fiscal support.

“A fair shot, a vaccination for everybody in the world may well be the highest return global investment ever. But the Fiscal Monitor also emphasizes the importance of giving a fair shot at life success for everyone. It documents that preexisting inequalities made COVID-19 worse and that COVID-19 in turn made inequalities worse. There is here a vicious cycle that threatens trust and social cohesion. Therefore, we recommend stronger redistributive policies and universal access to basic public services like health, education, and social security,” said Gaspar.

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