Nigeria, four others ban Europe’s dirty fuel imports

Minister of State for Petroleum Resources, Ibe Kachikwu

Nigeria and four other West African countries have agreed to ban the importation of Europe’s dirty fuels, the United Nations Environment Programme has said.

The UNEP said the move would dramatically reduce vehicle emissions and help more than 250 million people to breathe safer and cleaner air.

It said together, Nigeria, Benin, Togo, Ghana and Cote d’Ivoire agreed on December 1 in Abuja to introduce strict standards to ensure cleaner, low sulphur diesel fuels and vehicles emission standards, effectively cutting off Europe’s West African market to export its dirty fuels.

UNEP noted that a report by Public Eye in September this year exposed how European trading companies were exploiting the weak regulatory standards in West African countries, allowing for the exportation of fuels with sulphur levels up to 300 times higher than was permitted in Europe.

The Head of UN Environment, Erik Solheim, was quoted as saying, “West Africa is sending a strong message that it is no longer accepting dirty fuels from Europe. Their decision to set strict new standards for cleaner, safer fuels and advanced vehicle emission standards shows they are placing the health of their people first.

“Their move is an example for countries around the world to follow. Air pollution is killing millions of people every year and we need to ensure that all countries urgently introduce cleaner fuels and vehicles to help reduce the shocking statistics.”

Alongside the introduction of the new standards, the West African group has agreed to upgrade the operations of their national refineries, both public and privately owned, to produce fuels of the same standards by 2020, according to UNEP.

Nigeria’s Minister of Environment, Amina Mohammed, said, “For 20 years, Nigeria has not been able to address the vehicle pollution crisis due to the poor fuels we have been importing. Today, we are taking a huge leap forward, limiting sulphur in fuels from 3000 parts per million to 50 parts per million, this will result in major air quality benefits in our cities and will allow us to set modern vehicle standards.”

The UN Environment said it had been supporting countries in West Africa to develop policies and standards to stop the practice of importing fuel with dangerously high sulphur levels and introduce cleaner fuels and vehicles.

“Reducing the emission of the global fleet is essential for reducing urban air pollution and climate emissions. A combination of low sulphur fuels with advanced vehicles standards can reduce harmful emissions of vehicles by as much as 90 per cent,” it stated.

Imo State Government Intervenes To End Artificial Fuel Scarcity

The artificial fuel scarcity experienced on Friday in all parts of Imo state seems to have been resolved following the intervention of the Imo State government.

This was after hours of dialogue between the men of the Nigeria Security And Civil Defense Corps (NSCDC), members of the Imo state Independent Petroleum Marketers and the Petroleum Tanker Drivers Association, Imo State chapter.

The news came as a shock to residents of Imo State as they woke up on Friday morning to discover that petrol stations across the state were under lock and key.

The artificial scarcity was said to have been as a result of the alleged harassment and intimidation of tanker drivers by the NSCDC officials which recently led to the accidental shooting of a tanker driver.

The tanker driver is purportedly lying unconscious at the Federal Medical Centre, Umuahia, Abia state.

Most of the petrol stations visited in the Owerri metropolis were locked, as people were seen gathered at entrances of the petrol stations waiting for positive news.

Commuters were also seen stranded at various bus stops within the city.

Solidarity Protest

It was also gathered that the Independent Petroleum Marketers Of Nigeria Imo state chapter, had gone on strike, as a solidarity protest following the continuous harassment of tanker drivers by the NSCDC officials.

This according to the Chairman of the Independent Marketers Association in the Southeast, Bobby Ebere Chidick, is a regular occurrence.

“This is not the first time this will happen, it’s been happening, intimidation and harassment of our drivers, we had to take this step this time around because it’s pertaining to life and death.

“One of our drivers has been shot by the Civil Defense, he’s lying unconscious at the Federal Medical Centre Umuahia,” he said.

In justifying their actions, he further stressed that “it is a solidarity protest to try to notify the government of the activities of the Civil Defense”.

He said the duty of the NSCDC was to secure pipelines rather than monitoring trucks. He insisted that the matter must be resolved once and for all.

Confirming the incident, the Zonal Coordinator, Zone E of the NSCDC, Ben Dikuro, explained that the it happened accidentally in the course of discharging their primary duties.

He however debunked allegations of intimidation and harassment by his men, saying that the NSCDC will continue to discharge their duties as regards transpiration of petroleum products.

According to him, “we got an intelligence report about illegal diversion of petroleum product around Okigwe axis.

“My men swung into action and in the course of doing their duty, there was a misunderstanding and accidentally a driver was shot in the leg”.

In defense, he explained that it wasn’t intentional, adding that he had sent a team to the hospital to look after him.

Meanwhile, the state government immediately called for a meeting between both parties to resolve the issue and avert any harsh effects it might have on the masses.

The outcome of the meeting with the Deputy Governor of Imo State, Eze Madumere, was however positive as both parties resolved the issues amicably and the petroleum marketers promised to re-open as soon as possible.

“Thank God the Imo state Deputy Governor has intervened, we have been in a meeting since the last 4 hours and we have resolved to reopen our business”

The chairman of the Independent Marketers Association said.

Market Fundamentals Still Support N135-N145 Pump Price, Says PPPRA, Marketers

The Petroleum Products Pricing Regulatory Agency (PPPRA) and key oil marketers in Nigeria’s downstream petroleum sector have said that the current fundamentals guiding the importation and sale of petrol in the country were still favourable for petrol to be sold within the government-approved pump prices of N135 to N145 per litre.

The PPPRA and marketers which include the Nigerian National Petroleum Corporation (NNPC), Major Oil Marketers Association of Nigeria (MOMAN), and Depot and Petroleum Products Marketers Association (DAPPMA) stated this after an emergency meeting with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu in Abuja.

The meeting, according to a statement from PPPRA, was convened by Kachikwu as a response to recent news of a possible increase in the pump price of Premium Motor Spirit (PMS).

It was attended by the Group Managing Director of the NNPC, Dr. Maikanti Baru, the Acting Executive Secretary of PPPRA, Mrs. Sotonye Iyoyo, the Acting Executive Secretary of Petroleum Equalisation Fund (PEF), Ahmed Bobboi, as well as the Executive Secretary of MOMAN, Obafemi Olawore, and the Executive Secretary of DAPPMA, Olufemi Adewole.

The statement was however signed by the trio of Iyoyo, Olawore and Adewole, and it stated: “The meeting reviewed the state of the downstream sub-sector, especially as it relates to products supply, distribution, pricing and FOREX sourcing. The meeting also reviewed recent concerns expressed at certain quarters, on the sustainability of the current PMS price band.”

“After exhaustive deliberations, stakeholders present were in the affirmative that the speculations of an imminent upward price review of PMS was unfounded. This position is premised upon the fact that the current market fundamentals, as captured on the PPPRA pricing template for PMS, confirmed that the market is operating within the existing price band of N135-N145 per litre.

“The claim is therefore both unfounded and deceptive, as there is no basis for pricing speculations as being circulated within the last few days,” it added.

The PPPRA from this, assured that the country will continue to have an uninterrupted supply and distribution of petroleum products.

It said the promise was in line with its overall goal of facilitating a vibrant and robust downstream sector, and that Kachikwu has also assured of the federal government’s continued commitment to the welfare and well-being of all Nigerians.

Former Group Managing Directors of the NNPC had last Saturday stated that the that the price cap of N145/litre on petrol was not consistent with the liberalisation policy of the government especially with the foreign exchange rate and other price determining components such as crude cost, Nigerian Ports Authority (NPA) charges, remaining uncapped. They thus suggested that the government’s cap on pump price be taken off to allow for market parity.

Nigerian government rejects call to increase fuel price

The Nigerian government will not increase the pump price of petrol despite a demand that it should do so, officials have said.

The forum of former Group Managing Directors of the Nigerian National Petroleum Corporation, NNPC, on Sunday called for the price increase by calling for a removal of price cap in the pricing template.

A removal of the price cap would mean that marketers would be free to sell petrol at their desired price, based on several factors such as the exchange rate and international crude price. With the Naira exchange rate going down by over 50 per cent to about N412 since the current petrol price was fixed, approving the recommendation would have meant Nigerians pay more for petrol.

The Nigerian government through the Petroleum Products Pricing Regulatory Agency, PPPRA, however, said on Monday that it will not accept the advice.

The former GMDs had in a 12-point communiqué at the end their meeting with the incumbent GMD of the NNPC, Maikanti Baru, said the price cap of N145 per litre of petrol was “not congruent with the liberalization policy.”

The removal of the cap under a liberalised market environment would allow marketers of petroleum products to sell products at any price to enable them recover cost.

The Forum said the current ceiling price of N145 per litre did not factor the current foreign exchange (FOREX) rate and other price components of the pricing template, like crude oil cost and Nigerian Ports Authority (NPA) charges, which remain uncapped.

While stating the government’s response, the acting Executive Secretary of PPPRA, Sotonye Iyoyo, said the proposal was the personal opinion of the former state oil chiefs.

“If it was a recommendation, that is what it is – a personal opinion. I’m not aware government is planning any fuel price increase. We are in a liberalised market already,” she told PREMIUM TIMES.

The spokesperson of the NNPC, Garba Deen Mohammed, also described the advice as an “opinion.”

“The forum was expressing its opinion, which it is entitled to,” Mr. Mohammed reported. “NNPC is a player in the petroleum industry and has a right to have its views about the industry. Nobody is bound by the opinion.”

In the communiqué, the forum also asked the federal government to include funding of joint venture operations as first line charge to guarantee sustainable oil and gas production and national reserve growth.

The industry has, for years, been contending with challenges of dwindling investments to grow production and national reserves, due to inability of government to meet its funding obligations to the joint venture regularly.

The meeting also reviewed issues affecting operations of the oil and gas industry as well as recommendations to resolve them.

The issues include the insecurity in the Niger Delta, NNPC’s poor corporate reputation, poor state of the country’s refineries, current state of petroleum products supply pricing template, and need to focus attention on the Chad Basin in the ongoing frontier oil exploration activities in the northern part of the country.

Other issues include operations of the National Petroleum Investments Management Services, NAPIMS; Petroleum Industry Bill, PIB; NNPC’s relationship with its partners; NNPC’s dwindling revenue base and rising debt profile as well as its widening pension funding gap.

During the meeting, Mr. Baru presented the status of NNPC’s finances and the state of the oil and gas industry, spanning his management’s 12 business focus areas towards restoring the corporation on the path of growth and profitability.

In its review of the current state of industry and ways to resolve issues militating against its progress, the meeting was concerned about declining production levels and the consequences on the country’s revenue.

On insecurity, the meeting noted the threat to oil production and damage to the Niger Delta environment. It said there was need for government and security agencies to refocus their engagements with the various host communities to build sustainable partnership toward a lasting solution to the problem.

The former GMDs urged government to ensure the refineries were refurbished using the Original Equipment Manufacturers (OEMs), while their operations were restructured as Incorporated Joint ventures (IJV) modelled after the Nigerian Liquefied Natural Gas (NLNG), with credible technical and financial partners.

The meeting also asked the government to ignore the proposal in the draft PIB for an NNPC investment subsidiary, NAPIMS, to be removed from the state oil firm. it said that would inhibit its effective function as a national oil company in comparison with its peers in other countries.

On its dwindling revenue base, the former GMDs said they were concerned with the situation and called for particular attention to be focussed on revenue generating entities – the Nigerian Petroleum Development Company, the retail arm, and the refineries – to restore its growth and profitability.

Worried by the high level of NNPC’s debt profile, the former oil chiefs urged its management to urgently ascertain its true financial status and immediately decide on the most appropriate capitalization model.

“If the current situation remains unchecked, it could lead to the crippling of the corporation and the nation’s oil & gas sector, the mainstay of the Nigerian economy,” they said.