Oil marketers in Nigeria and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have called for the removal of fuel subsidy.
The groups said the Federal Government should stop the payment of subsidy, which gulped a whooping N60.37 billion in November 2019.
The oil marketers, under the umbrella body, Major Oil Marketers Association of Nigeria (MOMAN) said the Nigerian government should relax control and let the price of petrol be determined by market forces. The association said no matter how long Nigeria distances itself from the decision, it will have to embrace it at some point.
Nairametrics had reported that the Petroleum Product Pricing Regulatory Agency (PPPRA), disclosed that the Nigerian National Petroleum Corporation (NNPC) spent an average of N39.59 subsidizing every litre of petrol imported into the country in November. The NNPC, which is the sole importer of petrol in the country, reported that Nigeria consumes between 55 million and 60 million litres of petrol every day while Punch reported that FG is expected to spend N750.81 billion on petrol subsidy in 2020.
Subsidy payments degrades industry: Clement Isong, the Chief Executive Officer and Executive Secretary, MOMAN, which comprises of Total Nigeria Plc, Forte Oil Plc, OVH Energy Limited (an Oando licensee), MRS Oil Nigeria Plc, Conoil Plc and 11Plc (formerly Mobil Oil Nigeria Plc), subsidy payment degrades operational efficiency and economics of the downstream sector.
“We are consistent in our view that the subsidy payment or subsidy in the petroleum downstream sector degrades operational efficiency and economics of the downstream sector.
“We don’t think it is good for the industry as a whole. The industry is fraught with malpractices throughout the supply chain and needs improved governance and transparency,” Isong said while suggesting deregulation of the industry.
“We think it is only deregulation that can help us clean up the industry and bring back efficiency.”
PENGASSAN’s spokesperson, Fortune Obi, also backed MOMAN’s request, stating that the position of the association remains that subsidy should be removed because the country can’t pay it forever.
Where subsidy payment will be useful: Both associations said the cost of subsidy could be disbursed to finance infrastructure which is in dire need of the capital. Also, while MOMAN said the payment on fuel subsidy could be used to improve the road, PENGASSAN called for the funds to be used on revamping the refineries.
Obi said, “Amount that is to be used for subsidy should be invested in our refineries to give us the quantity of petroleum products we need.” He advised that the government should invite investors and let them operate it as a commercial business.
#DigitalSkillsTraining: FG announces conclusion of selection process
Only successful applicants that are contacted by the Ministry are to report at the training venue.
The Federal Government through the Ministry of Youth and Sports disclosed that the selection process for the upcoming Digital Skills Training has been concluded for the #DigitalSkillsTraining from April 11th to 30th, 2021.
This was disclosed in a statement by the Ministry of Youth and Sport on Sunday evening.
“The Federal Ministry of Youth and Sports Development wishes to inform the general public and all Nigerian Youths that the selection process has been concluded for successful applicants for the #DigitalSkillsTraining scheduled for April 11 to 30, 2021,” the statement said.
The Ministry added that only successful applicants that were contacted by the Ministry are to report at the training venue. Those who were not successful but arrive at the training would not be admitted.
“Upcoming #DigitalSkillsTraining Programmes of the Ministry will be widely publicized on youthandsport.gov.ng , on : noya.ng and on the Ministry’s social media handles,” the statement added.
What you should know
Recall that Nairametrics reported in November 2020, that the Ministry of Youths and Sports Development announced it will scale up its digital skills training to cover 500,000 youths across the country after securing funding under the COVID-19 stimulus budget.
Cost of building materials rise by over 60% in one year
The price of building materials in the market experienced a rise of over 60% in the last one year.
The cost of Cement, Steel, Tiles and Plaster of Paris (PoP) cement, among others have risen by over 60% between March 2020 and March 2021.
For instance, the cost of steel, which was sold at N234,000 per tonne as of March 2020, had increased to N380,000 at the end of March 2021. This represents a 62% increase within the period under review.
While Dangote Cement increased from N2,600 to N3,800 (though it is sold at N3,600 in some areas in Lagos), Lafarge Cement and BUA Cement increased from N2,400 and N2,250 to N3,600 and N3,250 respectively within the same period.
The price hikes are not limited to the cost of steel and cement alone but also to other materials like Tiles, PoP cement, and roofing sheets.
The cost of super white cement increased from N2,500 (25kg) to N3,700, and the cost of high-quality white cement (40kg) also increased from N4,000 to N6,500.
The cost of gravel increased from N80,000 to N140,000; that of 8mm diameter and 25mm diameter (imported) increased from N234,000 and N245,000 to N330,000 and N380,000 respectively.
Doors are not left out in the hike. Costs of Flush door (high quality), Panel door and Turkish steel door (1,500 x 2,100) also rose from N35,000, N40,000, N165,000 to N60,000, N75,000 and N235,000 respectively.
Why the hike?
Industry experts have attributed the hike to persistent depreciation of the naira and the rising cost of other building materials.
Tunde Oluwole, a fellow of the Nigerian Institute of Builders, explained that the development was caused by high interest rate, inflation, increasing exchange rate and scarcity of forex in the country.
He said, “The increasing prices in Nigeria is a result of the combined effects of high-interest rates, devaluation of the naira, inflation, and non-effective distribution network of the materials.”
To Kolawole Adebisi, an Estate Developer, the development in the cement industry is caused by the ban of imported cement in the country.
He told Nairametrics that he is not against the ban, as the government’s intention is to boost local production of cement but explained that “the local manufacturers were unable to produce enough cement to meet the demand and this contributed to the rising cost of the product.”
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.
- NSE approves delisting of 11 Plc shares.
- Berger Paints Nigeria Plc reports a 67% decline in Profits in FY 2020.
- MTN Nigeria raises N73.5 billion from CP Issuance to finance operations.
- Jaiz Bank proposes dividend worth N884 million for shareholders.