Economy

Nigeria orders oil marketers to open CNG pumps in filling stations

Published

6 months ago

May 16, 2024

The Nigerian government has concluded plans to ensure marketers open Compressed Natural Gas pumps in filling stations across the country.

For that, the government said intending retail licensees would be now required to establish a CNG point in their filling stations before getting final government approval.

The government asked oil marketers to commence the process of establishing Compressed Natural Gas points at their filling stations to increase consumer accessibility.

The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, disclosed this during a meeting with key oil marketing companies on Tuesday in Abuja.

The discussion was to address the issues of incessant scarcity of petroleum products in the country and propose alternative solutions.

Ahmed also disclosed that a major conversation they had was in the area of the Compressed Natural Gas initiative of the Federal Government.

He implored the major marketers to explore the availability of CNG in their gas stations as President Bola Tinubu has directed that government vehicles to be purchased henceforth must be CNG-powered.

He said new applications for retail licences would no longer be approved without CNG points.

Ahmed, who described the push by the federal government to encourage the use of CNG as an alternative to petrol as a revolution, said the government was determined to reduce the burden of petrol on the economy.

He added, “We also discussed the CNG revolution and our collective effort to ensure that we reduce the burden on the economy by having an alternative by having an alternative to PMS which is very costly especially due to exchange rate fluctuations and instability. we are looking at gas because we have it in abundance, we have over 200 trillion cubic feet of gas. All we need is to harness the industry to produce, invest and be good for the consumer and CNG is the way to go.

“We discussed our plans and collective responsibility to add CNG in our petrol stations very soon just like we have PMS, diesel and kerosene, we also want to have CNG so that it would provide easy access to the consumers but of course, we have to address the supply side and we are working with the producing companies, our sister agency, NUPRC and NNPC Limited as well as Gas Aggregation Company of Nigeria to ensure that the product is also available at a competitive cost to the consumers.

“Secondly, we want to reduce the burden of the importation and consumption of PMS. we explored the possibility of converting the energy requirement of retail outlets and depot by the stakeholders here going into solar but of course there is a high entry cost and we have discussed that and it is going to be in phases.

By doing so, we will reduce the demand for diesel in terms of powering our generators by utilising solar options. Once we are done with consultations, we will require that CNG add-ons be put in petrol stations and for new applications, one of the requirements will be that you must have CNG add-on in the petrol station”, he said.

Speaking to journalists after the meeting, the chief executive stated that authority will not dictate the price band of the products but assured that stopgaps like the Dangote Refinery would bring succour to the local industry.

He said the government would not set the price of petroleum products from the Dangote refinery upon its full operation.

He stressed that though the government was encouraging local refining of petroleum products to reduce imports, it would not compel oil marketers to buy from Dangote Refinery as the decision was commercial.

The authority had recently stated that it would soon issue a fully valid operating licence to the 650,000 barrels per day capacity petroleum refinery. The facility started releasing Automotive Gas Oil, popularly called diesel to the domestic market in April this year. It has yet to release Premium Motor Spirit, popularly called petrol.

He said, “There are concerns about the ability to import petroleum products especially diesel and aviation fuel and the advent of the Dangote refinery. We allayed the fears of the marketers and told them that the Dangote refinery is a major achievement in our country because the past we were importing every litre of petroleum products we required except those supplied by modular refineries. And as an oil-producing country, we believe at NMDPRA that we should support our local industry. And that is why we encourage our marketers to patronise our local refineries.

“But, at the same time, it is a commercial decision that they have to make between the suppliers and the clients. NMDPRA will not determine how much it is sold or how much you are buying. It is their own decision to go to Dangote refinery and purchase, and for Dangote refinery to determine the price they sell. As a regulator, we will not determine the price, we are only interested that the nation is well supplied.”

On the recent shortage of petrol across the country, Farouk blamed it on the logistics problem faced by NNPC Limited in moving products from offshore to onshore depots.

He also hinted at plans to equip retail outlets and trucks with trackers to oversee product movement, dispensing, and volume accounting to obtain a precise estimate of our national consumption.

“We also talked about our national consumption, the requirement for our national consumption for petrol stations, retail outlets and trucking industries to put some trackers that monitor the movement of the product as well as the dispensing and accounting for the volume sold or transported so that we can have a very good estimate of our national consumption. Because currently what we do is rely on trucking information rather than the actual delivery into retail outlets or other consumption areas.”

Speaking on behalf of the companies, the CEO, Matrix Energy, Mr Abdukabir Adisa Aliu said the companies were ready to support the government in its effort to increase energy sources for Nigerians.

“It is the country first and it is when you have a good country that the marketers will be able to operate and the consumers would be able to buy. I think the decision of the Federal Government supersedes all other decisions that we have. We are all in alignment with the decisions of the government and plead with Nigerians to be patient”, he stated.

Economy

FG services foreign debt with $3.5bn

Published

6 days ago

November 13, 2024

Kayode Sanni-Arewa

The Federal Government spent $3.58 billion servicing its foreign debt in the first nine months of 2024, representing a 39.77 per cent increase from the $2.56bn spent during the same period in 2023.

This is according to data from the Central Bank of Nigeria on international payment statistics.

The significant rise in external debt service payments shows the mounting pressure on Nigeria’s fiscal balance amid ongoing economic challenges.

Data from CBN’s international payment statistics reveal that the highest monthly debt servicing payment in 2024 occurred in May, amounting to $854.37m.

In comparison, the highest monthly expenditure in 2023 was $641.70m, recorded in July. The sharp contrast in May’s figures between the two years ($854.37m in 2024 versus $221.05m in 2023) highlights the rising cost of debt obligations, as Nigeria battles massive devaluation of the naira.

The CBN showed significant month-on-month changes in debt servicing costs, with some months recording sharp increases compared to the previous year. A breakdown of the data revealed varied trends across the nine months.

In January 2024, debt servicing costs surged by 398.89 per cent, rising to $560.52m from $112.35m in January 2023. February, however, saw a slight decline of 1.84 per cent, with payments reducing from $288.54m in 2023 to $283.22m in 2024.

March recorded a 31.04 per cent drop in payments, falling to $276.17m from $400.47m in the same period last year. April saw a significant rise of 131.77 per cent, with $215.20m paid in 2024 compared to $92.85m in 2023.

The highest debt servicing payment occurred in May 2024, when $854.37m was spent, reflecting a 286.52 per cent increase compared to $221.05m in May 2023. June, on the other hand, saw a 6.51 per cent decline, with $50.82m paid in 2024, down from $54.36m in 2023.

July 2024 recorded a 15.48 per cent reduction, with payments dropping to $542.50m from $641.70m in July 2023. In August, there was another decline of 9.69 per cent, as $279.95m was paid compared to $309.96m in 2023. However, September 2024 saw a 17.49 per cent increase, with payments rising to $515.81m from $439.06m in the same month last year.

The data raises concerns about the growing pressure of Nigeria’s foreign debt obligations, with rising global interest rates and exchange rate fluctuations contributing to higher costs.

The global credit ratings agency, Fitch, recently projected Nigeria’s external debt servicing will rise to $5.2bn next year.

This is despite the current administration’s insistence on focusing more on domestic borrowings from the capital market.

It also estimated that approximately 30 per cent of Nigeria’s external reserves are constituted by foreign exchange bank swaps.

Regarding external debt, the agency said external financing obligation