Business

NNPCL Reveals How Subsidy Retarded Infrastructure Development

Published

2 years ago

March 25, 2023

The Nigerian National Petroleum Company Limited (NNPCL) on Thursday said that Nigerians have missed enormous infrastructure development due to the protracted fuel subsidy regime in the country.

The NNPCL disclosed that the amount spent on fuel subsidy payment could provide 7,500km of road network at N400 million per kilometre and 37 well-equipped 120 Beds Tertiary Health Centres at N32 billion per hospital annually.

Mr Lawal Musa, Senior Business Advisor to the GCEO, NNPCL disclosed this in Abuja at a joint National Association of Nigerian Students (NANS)/Civil Society Organisations (CSOs) sensitisation workshop on the NNPCL Operations.

Musa, in a presentation entitled “Petroleum Industry Act (PIA) and the Nigerian Economy’’ said the Federal Government spent as much as N4.8 trillion annually on fuel subsidy at the expense of the wellbeing of Nigerians.

In an analysis of the opportunity cost of the subsidy spending, he said deregulation could deliver 500,000 new houses and education and skill up of two million Nigerian students, among others.

He said it could deliver N12 trillion in four years to Nigeria while annual Premium Motor Spirit (PMS) under recovery would escalate to N3 trillion.

He said the cost of fuel subsidy outweighed the direct benefits particularly to the masses.

He further said that deregulation could provide additional 27,000 megawatts of electricity to Nigerians and build and equip 2,400 hospitals in 774 LGAs.

“Nigeria is the largest producer of crude oil in Africa, possessing 28 per cent of Africa’s reserve, with petroleum contributing significantly to the country’s economy.

“The benefits derived have over the years been eroded due to the amount paid on subsidy, a regime has been fuelling the vicious circle of poverty in the country,’’ he said.

Musa explained that the PMS (fuel) was sold lowest price in Nigeria among most West African countries in spite of the average cost of $2.7 per litre globally, which amounted to up N570 per litre.

According to him, verifiable PMS demand data is critical to National planning and energy security.

In an overview of the PIA and New NNPCL structure, Mrs Oritsemeyiwa Eyesan, the Chief Strategy and Sustainability Officer, NNPCL, said the new entity was incorporated as a commercial company to be run like any other private company in the country, following the provision of the PIA 2021.

Eyesan, represented by Mr Vincent Ogbu, her Business Advisor said NNPCL’s activities were guided by three core values namely integrity, excellence and sustainability.

She explained that the signing of PIA into law overhauled the institutional, regulatory and fiscal framework for the Nigerian petroleum industry and provided structured approach for managing host community development and investments.

She further said that significantly, the PIA mandated incorporation of old NNPC and established NNPCL as a fully commercial entity.

“Under the Act, NNPCL is to conduct affairs without recourse to government fund. The new NNPCL is being owned by 200 million Nigerians with Ministries of Finance and Petroleum Resources as major shareholders,” she said.

Earlier, the NNPCL Group Chief Communications Officer, Garbadeen Muhammad, said the NNPC was engaging with students as critical stakeholders in the new organisation which belonged to over 200 million Nigerians including the Nigerian students.

Muhammad said the engagement which would be done annually, was aimed to enlighten the students and CSOs on the NNPCL as a new entity registered by the Corporate Affairs Commission under the Company and Allied Matters Act.

Also speaking, the National President of NANS, Usman Barambu, thanked the NNPC for the enlightenment workshop which had exposed the students on the new structure and operations of the oil company.

Barambu urged the company to ensure availability of fuel and tackle fuel scarcity in the country as well as opening of opportunities for ordinary Nigerian graduates to gain employment in the company.

Mr Olayemi Success, Chief Convener, Civil Society for Justice and Equity called for the removal of the fuel subsidy and urged government to channel the money towards improving the education sector.
NAN

Business

Naira Continues To Appreciate Against Dollar On Official Market

Published

3 days ago

August 1, 2025

Editor

The naira continued its appreciation against the dollar at the foreign exchange market on Tuesday.

Accordingly, the naira strengthened further to N1,533.18 against the dollar on Tuesday, from N1,534.21 traded the previous day.

This represents a gain of N1.03 against the dollar on a day-to-day basis and marks the second consecutive day of appreciation at the official FX market.

Meanwhile, on the black market, the naira depreciated further to N1,545 per dollar on Tuesday from N1,537 traded on Monday.

Recall that the naira had similarly closed Monday’s trading session with mixed sentiments, recording gains at the official market but depreciating at the parallel market.

Business

Dangote Refinery Gets New CEO

Published

3 days ago

August 1, 2025

Editor

The Dangote Petroleum Refinery and Petrochemicals has appointed David Bird, the former head of Oman’s Duqm Refinery, as its new Chief Executive Officer.

A report by S&P global on Friday said, Bird heads the refinery’s petroleum and petrochemicals division in a strategic move to overcome production challenges and advance its next wave of expansion.

Effective from July 2025, the former Shell head of operations at its Balau Pokom refinery stepped in as CEO of the Dangote Group’s fuels and petrochemicals business, which commissioned the world’s largest single-train refinery last year.

Our correspondent also observed that the CEO participated at the just concluded Dangote Leadership Development Program Graduation Ceremony.

The appointment signals the company’s renewed focus on scaling production, streamlining operations, and positioning itself as a dominant force in Africa’s refining and petrochemical landscape.

The report read, “Nigeria’s Dangote Group has appointed the former head of Oman’s Duqm refinery as CEO of its petroleum and petrochemicals business as it strives to overcome production challenges and advance its next wave of expansion.”

It, however, noted that the Dangote Group founder Aliko Dangote, will remain as chairman of the refining business and CEO of the wider conglomerate, which is also active in cement, fertilizers and sugar refining.

The business is expected to tap Bird’s experience expanding the Duqm refinery and diversifying its crude slate as CEO of OQ8, a role he adopted months before the Omani complex began its first test runs in 2023.

Commenting on his appointment, Bird said his focus at Dangote will involve advancing the group’s footprint beyond the Nigerian market and across the African continent.

As CEO of the refining business, he will be responsible for ensuring maximum output and efficiency for the refinery, and aims to make the group a leader in the global market, a LinkedIn update noted.

The appointment comes after a string of unit upsets and “design issues” that have stalled the ramp-up process of the 650,000-b/d refinery, while its leadership has called out a hostile business environment for challenging its operations.

Since it was commissioned in January 2024, Dangote has quickly grown its market share in the Nigerian fuel sector, displacing large volumes of gasoline imports that the country once relied on.

However, Aliko Dangote has railed against “rent-seeking” trade partners and substandard fuel imports for putting strain on the business.

In a previous interview with Platts, Bird emphasised a trading-led approach to achieve a competitive edge in the refining sector, with a focus on high utilisation rates, efficiency and feedstock flexibility.

His approach aligns with a recent shift from the Dangote complex to process a wider range of crude grades, partially spurred by limited availability of the Nigerian oil it was designed to process.

However, the Nigerian refinery is still obliged to sell fixed volumes of its oil products into the domestic crude market under a naira-based trade agreement with the Nigerian National Petroleum Company, a 7.2 per cent stakeholder in the business.

As the Dangote Group eyes its next wave of growth, it plans to expand the capacity of the Lagos refinery to 700,000 barrels per day, build out port infrastructure and establish foreign storage assets in Namibia and other countries.

In August, it is set to roll out its own distribution business with a fleet of 4,000 CNG-powered trucks.

Dangote Group officials have also shared ambitions to list the refining business on the London and Lagos stock exchanges, and Aliko Dangote reiterated plans to take the business public.

After years of setbacks and budget challenges, the speed of the refinery’s ramp-up in 2024 caught many analysts by surprise, and the complex quickly began exerting pressure on global oil benchmarks as it began exporting its products.

Yet despite beginning test runs on its main gasoline outlet, the residue fluid catalytic cracker, in Q3 2024, the company has since suffered repeated outages on the unit in 2025, forcing it to rely on its lower-yield reformer and sacrifice output over extended periods.

Speaking to Platts earlier in July, a Dangote executive said the RFCC was running at 85 per cent. He denied reports that the company will undergo a planned turnaround on the unit in December.

According to S&P Global Commodities at Sea data, Nigeria exported some 220,000 b/d of petroleum products in July 2025, when outages at NNPC facilities made Dangote the country’s only active refiner.

The complex exported 30,000 b/d of residual fuel, a refining byproduct which would normally be kept on site for further processing in the RFCC under normal operations.

Exports continue to be dominated by jet fuel, which accounted for 45 per cent of total shipments, and gasoil with a 24 per cent share.

Business

Petrol Tankers To Stop Loading Beyond 45,000 Litres By October 1 – IPMAN

Published

3 days ago

August 1, 2025

Editor

The Western Zone of the Independent Petroleum Marketers Association of Nigeria has said tankers will no longer load more than 45,000 litres of the product from October 1.

The Chairman of the zone, Chief Oyewole Akanni, disclosed this in an interview with the News Agency of Nigeria in Ibadan on Friday.

Akanni stated that the measure was adopted in a joint meeting involving IPMAN, the government and other stakeholders, held to reduce the cases of petroleum tanker accidents.

The stakeholders, he said, are the Petroleum Tanker Drivers, Nigerian Association of Road Transport Owners, the Nigerian Midstream and Downstream Petroleum Regulatory Authority and oil marketers.

He said, “Before now, some tankers carried up to 90,000 or 60,000 litres, which was dangerous.

“Those big tankers damage our roads, as the trucks are made to carry far more than they were designed for.

“And when overloaded, they become unstable and fall, causing accidents.”

Akanni stated that the government had also mandated all tankers to install safety covers that prevent spillage in the event of a crash.

“With these covers, even if a tanker falls, fuel won’t spill, except if the tank is punctured,” he said.

He, however, lamented the activities of vandals, who deliberately puncture fallen tankers to steal fuel, describing it as a major challenge.

The IPMAN chairman also said that PTD discovered that most accidents occurred at night due to fatigue.

“We have, therefore, instructed drivers not to drive at night.

“Once it is 7.00 p.m., they must park and continue their journey by 7.00 a.m. the next day, but some still disobey this directive,” he said.

Akanni assured that IPMAN would continue to work with stakeholders to ensure that tanker-related accidents were minimised.

He said that the spate of fatalities had triggered federal interventions, calling for stricter regulations, mass education, and enforced safety reforms.

According to Akanni, the incidents form part of a broader wave of tanker disasters across Nigeria.

“These are marked by systemic failures, including overloading, poor infrastructure, inadequate enforcement, alongside dangerous public practices like fuel scooping,” he said.

NAN