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Economy

FG plans cooking gas export ban to crash price

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The Federal Government is to stop the exportation of Liquefied Petroleum Gas, popularly called cooking gas, in a bid to increase its volume domestically so as to warrant a crash in price.

It stated on Thursday that LPG producers in Nigeria and key stakeholders in the industry had been told to stop exporting the commodity out of Nigeria, following the recent jump in the cost of cooking gas.

Although the volume of LPG consumption in Nigeria depends on the specific timeframe, figures obtained from the Nigerian Midstream Downstream Petroleum Regulatory Authority indicated that in 2022, the total cooking gas consumption across the country was 1.4 million metric tonnes.

Data from the agency put total domestic production during the review period as 600,000MT, while imports accounted for 800,000MT.

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In 2021, total consumption was estimated at around 800,000MT, as domestic production was about 300,000MT, while the volume that was imported in that year was put at 500,000MT.

Cooking gas consumption has been increasing significantly, with ambitious targets to reach five million metric tonnes by 2029, as LPG dealers stated that though Nigeria exports the commodity, the country relies heavily on imports to meet domestic demand.

This implies that the Federal Government could stop the export of over 600,000MT of cooking gas based on its drive to crash the price of the commodity locally.

Findings showed that the cost of refilling a 12.5kg cylinder of cooking gas in Abuja, Lagos, Kano and some other states had climbed to about N18,000. It was specifically N17,500 in Abuja on Thursday, a product that sold for less than N9,000 in November last year.

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LPG dealers under the aegis of Nigerian Association of Liquefied Petroleum Gas Marketers had predicted mid last year that a 12.5kg cylinder would cost N18,000 going by the incessant hikes in its cost.

To tackle this, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, constituted a committee in November 2023, headed by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed.

But up till today (Thursday), the cost of the commodity has maintained a northward movement, as many LPG users are gradually shifting to the use of charcoal.

But while speaking on the sidelines of the internal stakeholders’ workshop in Abuja on Thursday, Ekpo stated that the Federal Government had asked LPG producers to stop exporting the commodity.

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He named some international oil companies including Mobil, Shell and Chevron as producers, stressing that the government was interfacing with them to crash cooking gas prices.

In November 2023, a kilogram of cooking gas was about N700, but the product is now sold at about N1,400/kg. Some operators stated that the cost would increase further if the government fails to intervene.

Ekpo said, “With the issue of gas, you have seen the demonstration of the Federal Government by withdrawing all taxes and levies from the importation of gas related equipment. It is a big incentive.

“On the issue of LPG (cooking gas), we are interacting with the critical sectors to ensure that there is no exportation of LPG. All LPG produced within the country will have to be domesticated. And when this is done, the volume will increase and, of course, the price will automatically crash.

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“I’m in contact with the regulator, NMDPRA, we have meetings almost on a daily basis and with the producers of the gas like Mobil, Chevron and Shell. So there is that hope that things will turn around.

“And that is also why we are having this engagement to know exactly what the problems are, so that we can address them once and for all.”

When told that the removal of Value Added Tax on LPG seems not to be reflecting on the cost of the commodity, the minister stated that cooking gas investors were trying to maximise their profit from the sale of the product.

“Excuse me, it is not going to reflect that way. We are dealing with human beings. A policy has been put in place and these people, the investors, want to maximise the profit that they are going to get from it all.

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“So at the end of the day we had to come in, which is why you have the regulator. We are interfacing with them to make sure they crash the price. We are meeting with them on a daily basis,” Ekpo stated.

It was reported in December 2023 that the Federal Government had exempted the importation of LPG and its equipment from the payment of customs duty and Value Added Tax, as the move was expected to result in a drop in the cost of cooking gas across the country.

This was disclosed by the Federal Ministry of Finance in a letter (dated November 28, 2023) to the Special Adviser to the President on Energy; Comptroller-General of the Nigeria Customs Service; and the Chairman of the Federal Inland Revenue Service.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, signed the letter.

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Meanwhile, when asked on Thursday to state when government vehicles would start running on Compressed Natural Gas as always championed by the government, the gas minister stated that he would speak on this later.

“The Presidential Initiative on CNG was set up before the inauguration of the ministers, but I’m interfacing with them. The Federal Government committee is working towards realising the goals. So the moment I get a clearer picture about it I will address you accordingly,” Ekpo stated.

Nigeria has over 208 trillion standard cubic feet of gas reserves and is now viewed as a gas-rich nation.

But most of the country’s gas resources remained untapped due to several reasons such as lack of investments in the sector, the shift from fossil fuels, policy issues, among others.

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Ekpo was also asked whether the government would allow operators in the sector to run most of their transactions in naira, as against the popular practice of dollar transactions, and he said the matter would be discussed at the meeting by stakeholders.

“If you were there when the director on gas was presenting what we discussed during the stakeholders meeting on February 6, 2024, it (the concern) was presented, and I will have the views of the implementers and regulators today. Then from there we can take a decisive decision on how to address it,” the minister stated.

Earlier during his speech at the workshop, he said the aim of the event was to reposition the Nigerian gas sector for optimal performance, in line with President Bola Tinubu’s agenda to unlock Nigeria’s abundant gas resources for economic development and poverty eradication.

“This is the second in a series of engagements with stakeholders in the gas sector, the first being the consultative meeting I held with external stakeholders in the gas sector on February 6, 2024 which provided a platform for me to hear from the various associations and groups operating across the gas value chain with a view to understanding the pain points of the industry operators.

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“It is my expectation that having heard from the operators in our industry, we as policymakers, regulators and policy implementers will internalise the feedback from our stakeholders and customers to proffer workable solutions to tackle the issues bedevilling our nation’s gas sector.

“With over 208 trillion standard cubic feet in proven gas reserves, Nigeria has no business with energy poverty, and it is imperative for us to rise up as a people to tackle these challenges head-on,” Ekpo stated.

He stated that as part of efforts to ensure a high level of performance and accountability within the Federal Government, the President, through the office of the Special Adviser on Policy and Coordination, had released the Presidential Priorities and Ministerial Deliverables for 2023 – 2027 to create a performance tracking mechanism for the Minister of Petroleum Resources and relevant agencies.

“The theme for this workshop – ‘Harnessing Nigeria’s Proven Gas Reserves for Economic Growth and Development,’ is very apt and provides a platform for us to galvanise action and take the necessary steps to release this nation’s abundant gas reserves to accelerate our industrialisation and develop the economy for the good of our teeming population,” Ekpo stated.

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The Chief Executives of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Ahmed Farouk, and the Nigerian Upstream Petroleum Petroleum Regulatory Commission, Gbenga Komolafe, were in attendance at the internal stakeholders’ workshop on Thursday.

Representatives from other agencies under the petroleum ministry such as the Nigerian National Petroleum Company Limited, Petroleum Technology Development Fund, directors from the Federal Ministry of Petroleum Resources, among others, were also in attendance.

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Economy

Petrol to sell at N935 per litre from today-IPMAN

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The Independent Petroleum Marketers Association of Nigeria (IPMAN), says the price of petrol will drop to N935 per litre by Monday in view of Dangote Refinery’s new arrangement.

IPMAN said the new price was necessitated by the reduction in Dangote Refinery’s fuel ex-depot price and uniform arrangement, which would enable marketers to sell at N935 in their outlets nationwide.

Alhaji Maigandi Garima, IPMAN National President, who made this known on Sunday in an interview with the News Agency of Nigeria (NAN) in Abuja, lauded the Dangote refinery for the development.

NAN reports that Dangote refinery recently announced a significant reduction in fuel price by 7.27 per cent from N970 per litre to N899.50 per litre at its loading gantry and provided generous credit terms to marketers.

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In the bid to ensure that the price reduction gets to the end consumers, it signed a partnership with MRS to sell petrol from its retail outlets nationwide at N935.

The price reduction which is designed by Dangote refinery to alleviate transport cost during the festive period and beyond, has already commenced in Lagos, and will be offered nationwide from Monday.

“Dangote refinery has brought another new arrangement of loading and pricing by which marketers would pay a fixed ex-depot price of N899. 50k.

“The refinery is running a programme whereby it wants the fuel consumption across the country to be at the same rate. We are expecting the new arrangement to kick-start on Monday.

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“We have been loading from the Dangote refinery and the refinery is saving us in this festive period,’’ he said.

The IPMAN president said previously it was loading at N970 per litre at Dangote refinery, but based on the arrangement and promise from Dangote, by Monday fuel price will drop to N935.

Garima said the downstream sector competition being witnessed currently was expected by marketers since due to deregulation, adding that it would see the price of fuel dropping continuously.

“That is the reason why we have been asking the government to allow private sectors to participate in the refinery business.

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“Very soon more refineries are coming up and the country will see a lot of price reduction in the downstream sector,’’ he said.

He recalled that during the 2023 yuletide, per litre of fuel was sold at N2, 000 in the Northern and Eastern part of the country because fuel was being imported at that period.

He added that the highest price of which fuel could be sold there currently is N1, 100 because refineries are running in the country.

“By the time Warri and Kaduna resume production, one can buy products at cheaper rates and it is good for the economy,’’ he added.

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He however commended the Naira for the crude swap deal, adding that it is a good development for the growth of the economy.

The NNPC Ltd. had also slashed fuel ex-depot price from N1, 020 to N899.

The fuel price reduction reflects response to deregulation and increased industry competition.

(NAN)

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Economy

SEC orders public companies to publish financial statements online by Jan 2025

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The Securities and Exchange Commission (SEC) has issued a new directive requiring all publicly listed companies in Nigeria to publish their financial statements on their official websites, effective January 2025.

This was disclosed in a circular issued by the Commission on Thursday, stressing the importance of the move for investor confidence and regulatory compliance.

The SEC warned that non-compliance with this directive would attract strict sanctions, demonstrating its commitment to improving transparency and accessibility in the Nigerian equities market.

According to the SEC, “The Securities and Exchange Commission (‘the Commission’) has observed that public companies file their periodic returns with the Commission and relevant securities exchanges without simultaneously publishing the same on their websites. This omission contravenes Rules 39 and 41 of the Commission’s Rules and Regulations.”

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The Commission noted that while publicly listed companies routinely file periodic returns with it and relevant securities exchanges, many fail to make these financial statements accessible to the investing public on their websites. This practice, it noted, violates the requirement to ensure that financial disclosures are readily available to guide investors in making informed decisions.

SEC explained the rationale for the directive, stating that publishing financial statements online provides seamless access for the investing public. This ease of access, the Commission said, is essential for encouraging sound investment decisions and ensuring investor confidence in the market.

“Timely disclosures remain a key component of shareholder engagement,” the Commission stated. “The publication of periodic returns on their websites is aimed at providing seamless access by the public to such information, which would serve as a guide to making sound investment decisions.”

The Commission further noted that effective from January 2025, any public company that fails to simultaneously file its periodic returns with the SEC and relevant securities exchanges and publish them on its website will face penalties.

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Economy

Dangote Refinery, NNPCL resume fight over $1bn loan

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Dangote Group, owners of Dangote Refinery, and the Nigerian National Petroleum Company Limited, NNPCL, have clashed over a $1 billion crude oil-backed loan.

Recall that barely 24 hours ago, in a statement credited to NNPCL spokesperson Olufemi Soneye, the state-owned oil firm said it secured a $1 billion loan backed by crude to support the Dangote Refinery during liquidity challenges.

However, Dangote Group spokesperson, Anthony Chijiena, has described NNPCL’s claim as ‘misinformation’.

The company clarified that the $1 billion crude backed loan is about five percent of the total investment that went into building the 650,000 barrels per day refinery.

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According to him, it is inaccurate to say NNPCL facilitated $1 billion for Dangote Refinery amid liquidity challenges.

Chijiena explained that NNPCL had proposed a 20 percent stake investment valued at $2.76 billion in the Dangote Refinery, but that didn’t materialise.

He noted that NNPCL was able to invest $1 billion, which amounts to 7.24 percent equity value.

“Our decision to enter into a partnership with NNPCL was based on recognition of their strategic position in the industry as the largest offtaker of Nigerian crude and, at the time, the sole supplier of gasoline into Nigeria.

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“We agreed on the sale of a 20 percent stake at a value of $2.76 billion. Of this, we agreed that they will only pay $1 billion while the balance will be recovered over a period of 5 years through deductions on crude oil that they supply to us and from dividends due to them.

“If we were struggling with liquidity challenges, we wouldn’t have given them such generous payment terms.

“As of 2021, when the agreement was signed, the refinery was at the pre-commission stage. In addition, if we were struggling with liquidity issues, this agreement would have been cash-based rather than credit-driven.

“Unfortunately, NNPCL was later unable to supply the agreed 300 thousand barrels a day of crude, given that they had committed a greater part of their crude cargoes to financiers with the expectation of higher production, which they were unable to achieve.

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“We subsequently gave them a 12-month period for them to pay cash for the balance of their equity given their
inability to supply the agreed crude oil volume.

“NNPCL failed to meet this deadline, which expired on June 30th, 2024. As a result, their equity share was revised down to 7.24 percent. These events have been widely reported by both parties.

“It is, therefore, inaccurate to claim that NNPCL facilitated a $1 billion investment amid liquidity challenges.

“Like all business partners, NNPCL invested $1 billion in the refinery to acquire an ownership stake of 7.24 percent. That is beneficial to its interests,” the Dangote Group statement said.

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