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FG Pays N1 Trillion Monthly As Petrol Subsidy — Pinnacle Oil MD

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In a revelation that underscores the ongoing challenges in Nigeria’s oil sector, Pinnacle Oil and Gas Limited has disclosed that the country is incurring about N1 trillion every month on petrol subsidies.

This disclosure was made by the Managing Director/CEO of the indigenous oil and gas company, Robert Dickerman, during the Nigeria International Energy Summit (NIES) held in Abuja.

Despite the government’s efforts towards deregulation in the downstream sector, the persistence of such a hefty subsidy indicates a significant financial burden on the nation’s economy.

The subsidy mechanism, intended to make petrol affordable for Nigerians, has inadvertently resulted in the product being cheaper within the country compared to neighbouring nations.

This price disparity has been identified as a key driver for the smuggling of petrol across borders, further complicating the subsidy issue.

Speaking at the forum’s panel session six, which focused on Nigeria’s Downstream Sector, Dickerman highlighted the paradox that, despite substantial progress in the industry, the massive subsidy is a clear indication of the challenges still facing Nigeria’s oil and gas sector.

He said the situation not only affects the government’s finances but also impacts the operational dynamics of companies within the sector, like Pinnacle Oil and Gas, which operates across the entire downstream value chain.

Dickerman stated that the continued payment of subsidies at such a scale raises questions about the sustainability of such expenditures and the need for more effective policies to address the underlying issues.

He said, “Nigeria has a long history of allocating resources to oil and gas production at the expense of most other economic and social programs. To balance this, there has been a long-standing policy to mitigate consumer costs via palliatives such as fuel and food subsidies.

“But one of the net effects of oil money is underinvestment in local production, manufacturing and other value-added activities that could generate foreign currency through exports. There has also been a large under investment in the maintenance and upgrade of existing infrastructure including electricity, roads, health care, water, waste, education and financial infrastructure such as consumer credit.

As a result, we have a huge negative trade deficit, except for crude oil and LNG, and our banks are not sufficiently capitalized to support significant new capital programs.

“With legacy monetary policymaking currency exchange difficult, we desperately need Foreign Investment. This is a reality. So the best policy during this time of crisis is a national policy to transform our economy/regulations/laws to accommodate and encourage FDI.

“Foreign investors, foreign lenders and government-run DFIs have been very clear about what they want to see: Conservative fiscal policy, tackling corruption, enabling competitive markets, and enforcement of fairness in markets through policy, regulation and the ability to enforce contracts. Keeping that context in mind, I want to point out that there is still a massive subsidy in PMS, albeit in the FX portion of PMS Price, not the global price in dollars.

“The consequences of this subsidy are: The cost of gasoline in Nigeria is the lowest in Africa by far, which encourages smuggling out, further depriving Nigeria of value. Smuggling causes Nigeria to subsidize neighbouring countries even while our economy struggles. The cost is hurting the entire budget, Federal and State, as critical programs cannot be funded to pay this subsidy. It is currently calculated to be about 1 trillion Naira/month.

“Also, with this subsidy in place, ceasing subsidy payments would result in no petrol supply, if there are no refineries producing gasoline. All supplies come from the international market, which will only sell at market prices.

“There is no competition in bulk supply, as only the national champion owned by the government can import. Wholesale and retail prices are set based on their subsidized cost and they determine who gets supply. Without a competitive market, foreign investors are discouraged from investing in this sector in Nigeria.

“The solution to this problem seems obvious, even acknowledging the daily struggles most citizens and companies have today with reduced purchasing power, high inflation, high interest costs and high unemployment that exists today. Short-term palliatives have never resolved long-term issues in any nation at any time in history. We need long-term solutions.”

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You have given a lease of life to FCT,” Tinubu hails Wike for sterling infrastructure deployment

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By Kayode Sanni-Arewa

President Bola Tinubu hailed the Minister of the Federal Capital Territory (FCT), Nyesom Wike, for restoring life to the nation’s Federal Capital Territory.

President Tinubu, who spoke on Tuesday when he inaugurated the Southern Parkway from Christian Centre to Ring Road One, a project that started 13 years ago, also said completion of the project was a mark of his commitment to inclusive and sustainable development.

The President, who headed to the inauguration site on arrival from Lagos, identified that the newly inaugurated road, which the FCT administration named after him, would not only ease traffic congestion, but also enhance mobility and creativity for the residents and visitors to city.

“But transformative projects you are seeing, I heard from his remark that this project could have been an abandoned project for 13 years, scratching the surface. Once again, our dear landlord, Barrister Ezenwo Nyesom Wike, thank you for bringing life back to our Federal Capital Territory.

I understand the Southern Parkway not only represents a physical artery that connects vital areas within FCT, but also symbolises our collective aspirations for connectivity, ease of livelihood, accessibility and progress.

“By providing a seamless and efficient transportation corridor, this road will not only ease traffic congestion, but also enhanced mobility and creativity for the residents and visitors to FCT.

“The completion of the Southern Parkway underscores our, as we strive to build a world-class capital city. We recognise the fact that infrastructure is an enabler of jobs, economic development and prosperity. We believe we are going to achieve all of that.

“The needs of our citizens is paramount in our minds, so for making our citizens the central focus of our development, we believe Nigeria will succeed. As we formally inaugurate this road, I am greatly honoured, I heard him mentioning my name as the beneficiary. Thank you very much; thank you for being a very good team leader, we all collectively will not let you down,” the President said.

He lauded the FCT Minister, Wike, for his vision and hard work, which he said had effected changes, both structurally and administratively, to the capital and has inspired many citizens.

“I must recognise your vision that is revolutionary and very inspiring to many of our people. The changes you made to the FCT – structural and administrative – is yielding results and elevating the heart of many Nigerians, thank you very much.

“Today, we are here to mark a significant milestone in the journey of our nation towards progress and development. As we commemorate our first year in office when I was inaugurated as the President of the Federal Republic of Nigeria, it is a great joy and challenge that we have a huge job on our…, “ he said.

Wike said the projects had dragged on for several years.

However, he said the coming of the current administration and President’s unflinching support had led to the completion of the project amongst others, that are ready for inauguration.

He said the FCTA and the FCT Residents appreciated Tinubu’s support and laudable achievements.

He said: “It is in this regard and for many other patriotic persuasions that the FCT Administration hereby humbly resolved that this very important road be named the “BOLA AHMED TINUBU WAY”.

The Minister said the Southern Parkway was one of the principal arteries conceived and planned as a freeway to provide access and connectivity to the Southern development flank of the city as provided in the Abuja Master Plan.

He said other principal artery was the Northern Parkway which had been substantially developed over the years to service the Northern districts.

According to Wike: “Southern Parkway at par with the Northern Parkway, this project which was awarded in December, 2010 to Messrs Setraco Nig. Ltd. at the contract sum of N16,234,553,335.64 (Sixteen billion, Two Hundred and Thirty-Four Million, Five Hundred and Fifty-Three Thousand, Three Hundred and Thirty-Five Naira, Sixty Four Kobo).

“Later it was revised to N35,757,763,310.18 (Thirty-Five Billion, Seven Hundred and Fifty-Seven Million, Seven Hundred and Six-Three Thousand, Three Hundred and Ten Naira, Eighteen Kobo) in March, 2021 due to changes in scope and other economic indices.

“The scope of work comprised the construction of 5.4km length of the road – made up of 2 main carriageways of 4 lanes each and 2 service carriageways of 2 lanes each, making a total of 12 lanes.

“It also includes the construction of 4 number Interchanges (a total of 8 bridges) in addition to the provision of associated underground engineering infrastructure facilities.

“I am happy to further inform your Excellency that the project is now completed in line with the “Renewed Hope Agenda” of Mr. President. The completion of the project will indeed enhance traffic circulation around the City Centre thereby reducing delays in travel time; complementing the developed portion of the Northern Parkway by easing the traffic congestion experienced in the Southern Districts of Garki, Gudu, and Durumi as well as accelerating the development of the Southern axis of the city in general, thereby bringing improved socio-economic benefits to residents and visitors to the city.

“Your Excellency, Distinguished Ladies and Gentlemen, on assumption of office in August 2023 we were confronted with many uncompleted projects that have dragged on for several years.” [with report by The Nation]

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ASUU Urges FG To Stop Tax Waivers, as Reps Summon First Bank, Others over Non Remittances of Education Tax

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By Gloria Ikibah 
 
 
 
This President Academic Staff Union of Universities (ASUU), Professor Victor Osodeke has called on the federal government to immediately stop tax waivers meant to fund tertiary institutions in the country.
 
 
Prof. Osodeke who said this during a public hearing on Monitoring of Collection, utilization and other associated services relating to Education Tax from 2011 – 2022, organised by the House of Representatives Committee on Tertiary Education Trust Fund (TETFund), on Tuesday, blamed the poor funding of tertiary institutions and incessant industrial actions to waivers granted to banks and other private institutions.
 
 
Chairman of the Committee, Rep. Miriam Odinaka Onuoha also directed First Bank of Nigeria and other Banks to appear before it alongside its Tax Consultant to reconcile the Education Tax Computation not remitted to TETFund by the banks between 2011 and 2022.

 

 
 
Rep. Onuoha who gave the directive when some commercial banks appeared before the committee to defend their non-remittance of Education Taxes over the years, said there were disparities between the figures that was in the Bank’s Financial Statements as Provisions for that purpose and what the Bank actually remitted to the Federal Inland Revenue Service (FIRS).
 
 
Upon their admittances of such discrepancies, without any substantial explanation, the Committee therefore summoned the Banks to come along with details of their Tax computations, External Auditors and Tax Consultant along with proofs of remittances by 20th June, 2024. 
 
 
‘The Banks disregarded their own Financial Statement liabilities on Education Tax and made  under remittances’.
 
This followed a motion by Rep. Oluwole Oke who prayed that the banks appeared before the committee with the tax consultants with details of that tax computation on a yearly basis.
 
 
The Chairman said out of the 15 banks invited, about seven were supposed to appear before the committee on Tuesday, while only three of them showed up with three other writing to seek a new date to appear.
 
 
Full list of Banks summoned to appear on the 20th June with the aforementioned documents and persons include, Zenith Bank, Access Bank,  First Bank, United Bank for Africa ( UBA), Sterling Bank, Keystone Bank, FBN Quest Merchant Bank, First Bank, Guarantee Trust Bank, Stanbic Bank , Wema Bank, Eco Bank, Fidelity Bank, Jaiz Bank and Unity Bank. 
 
 
Deputy Chairman of the Committee, Rep. Bappa Aliyu Misau had observed that First Bank under remitted its education tax deductions to TETFund, an action which he said was punishable under the law.
 
 
Misau said: “unfortunately, you do not have the year-by-year breakdown but  the available records you submitted in 2011 was N603,801. Then, in 2012, you are owing N301,263,135, in 2013, you have a credit balance of N102,713,615. 
 
 
“Again, in 2014, you had a credit of N2.933, 659, then if you go to 2015, you have N25 million as outstanding, in 2017, N169, 852,600 outstanding, in 2018 you have N98 million outstanding, in 2012, you paid N7.877,451 then in 2020 N148 million credit, in 2021, N269,618,626.6 debit. 
 
 
“Therefore, in 2022, you had N3.748,984, 654.64. Then you add it up, you sum the credit and the debit, you ended up with N3.749,353,260 outstanding. You know there is penalty for Non-Remittance”.
 
 
An Executive Director with First Bank, Bashir Yusuf who represented the bank at the meeting told the lawmakers that between 2011 and 2022, the Bank posted a Profit Before Tax (PBT) of N795,123 billion. 
 
 
When asked to take the figure year by year, the FBN Executive Director said, it was a summary of the presentation, he said, “unfortunately Madam Chair what I have is the summary of the presentation. 
 
 
 
“I crave the indulgence of the committee to take what we shared with the Committee. I prepared the summary for the presentation, so that if there are issues, we can take those issues, especially if there are matters that we need to settle outside the Committee room, our consultants.
 
 
“So, I am very sorry, I don’t have the breakdown by year, but I have the summary over the period. We had the net accessible profits of N28 billion, which is the difference between the allowable and the disallowable expenses on the PBT we posted over the period.
 
 
“In terms of tax liability over the period, we have a tax liability of N5.498 billion. Then, over the periods of the audit by the Committee, that is 2011 to 2022, we had additional assessments. It was on the basis of those assessments conducted between 2014 and 2021 that we had an additional liability of N852 million.
 
 
“So, in terms of total TETFUND Tertiary Education Tax Fund liability and payment, we made a payment of N5.493 billion. 
 
 
 
“And in terms of outstanding liability over the period, we have Nil liability over the period and other subsequent items associated with outstanding liability are also ready”.
 
 
He further stated that there were issues that cannot be resolved at the committee hearing, adding that “what you have are items that are classified as taxable. 
 
 
“We have some differences based on the provision of exemption order that was issued by the President in 2011. That’s why I said some of these issues we will not be able to resolve at this sitting.
 
 
“When the Committee asked the Bank to provide the Exemption Order on Education Tax as it relates to the matter under review, he could not provide any , Furthermore , the Bank already made  provisions in their Financial Statements for same Education Taxes without remittances in those respective years”.
 
 
 
Representatives of ASUU criticizrd the Banks for providing different figures to the Committee after making submissions earlier in January 2024 under Oath. 
 
 
The Union further requested the FIRS to stand-up to their duties on the efficient and honest  tax collection and stop the games playing with the Banks. 
 
 
The Union further commended the Committee for taking up the challenge to expose the fraud and corruption while enforcing compliance in our tax systems by some Corporate gurus despite their huge profits, yet unwilling to pay necessary taxes in support of Education to help the sector grow and the development of the Country human capital.
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JUST IN: Court Stops Police, SSS, Military From Evicting Emir Sanusi

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By Kayode Sanni-Arewa

The Kano High Court sitting on Miller Road has stopped the police, the State Security Service (SSS) and Nigerian military from evicting the Emir of Kano, Muhammadu Sanusi II, who was recently reinstated.

Granting the order, Justice Amina Adamu Aliyu of the Kano High Court also restrained the security agencies from arresting or harassing the emir and his kingmakers.

The judge held “that an order of interim injunction is hereby granted restraining the Respondents either by themselves, their agents, privies, representative, and assigns from further harassing, intimidatin, inviting, arresting and or invading the personal or official residence of the Applicants (Gidan Rumfa); his servants and or any of the Kano Emirate kingmakers of doing such acts that would be capable of interfering with the Applicants’ rights generally in relation to this suit pending the hearing and determination of the motion on notice.

“That an order of interim injunction is hereby granted restraining the Respondents from attempting to hijack, pick, commandeer, confiscate any of twin spear of authority, the Royal Hat of Dabo, the Ostrich-feathered shoes, the knife and sword of the Emir of Kano as well as symbols of authority pending the hearing and determination of the motion on notice

“That an order of interim injunction is hereby made restraining the Respondents from taking further steps in connection with the matter or maintaining status quo of staying all action pending the hearing and determination of the motion on notice.

“That it is further ordered that the Respondents are restraining from interfering with the functions, duties of the 1″ Applicant as the Emir of Kano pending the hearing and determination of the mation on notice dated 28 May, 2024.”

The case was filed by the emir alongside the four kingmakers of Kano: Madakin Kano Yusuf Nabahani; Makaman Kano Ibrahim Sarki Abdullahi; Sarkin Bai Mansur Adnan and Sarkin Dawaki Maituta Bello Tuta.

The motion on notice is adjourned to June 13, 2024 for hearing.

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