Connect with us
nairametrics

Energy

Petrol price to increase further, FG to add strategic reserves’ management cost

The pump price of petrol may be witnessing an increase as FG is set to add to it, strategic reserves’ financing cost.

Published

on

IPMAN, PPPRA, NNPC, Reduce funding oil subsidy - IMF to Nigeria , Oil marketers, PENGASSAN call for subsidy removal 

There could be a further increase in the retail pump price of petroleum products like petrol, kerosene and diesel.

This is due to the Federal Government’s proposal of the addition of the cost of managing the national strategic stocks of petroleum products to the retail price of the commodities.

READ: Petrol supply drops by over 23% due to decline in consumption

According to a report from Vanguard, this proposal is contained in the 2020 Petroleum Industry Bill (PIB) which is currently before the National Assembly for passage.

This means that the passage and subsequent signing into law of the PIB, will lead to further increase in the pump price of petrol. Other things being equal, as the cost of managing the national strategic fuel stocks would, from then, form an integral component of the pricing template of petroleum products and would determine the pump price of the commodities.

GTBank 728 x 90

READ: Local refining; A panacea for Nigeria’s reliance on imported refined products

Other current components of the pricing template, apart from the landing cost include the National Transportation Average (NTA), the Nigeria Ports Authority (NPA) charges, marketers margin and transportation costs.

In the new PIB that is before the National Assembly, the new Nigerian Midstream and Downstream Petroleum Regulatory Authority that would emerge from the scrapping of the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Petroleum Equalization Fund (PEF), is to be saddled with the responsibility of setting up and managing the national strategic stocks of petroleum products.

Coronation ads

READ: #EndSARS: IPMAN warns of looming fuel scarcity across the country

The new agency would determine the amount to be charged as a levy for financing the strategic petroleum products’ reserves. Which would form part of the retail price of each of the petroleum products, and also mandate to work with security agencies in deciding areas of the country where the national strategic stocks would be maintained and distributed. The 2020 PIB partly reads;

  • The Authority shall: establish, administer and ensure the storage and distribution of the national strategic stocks of petroleum products in accordance with regulations issued by the Authority.
  • Determine and publish the amount to be charged as a levy for the financing of the national strategic stock, which shall form part of the retail price of each petroleum product, such levy to be determined as a percentage of the retail price and be deducted on a wholesale basis.
  • And designate, in consultation with the appropriate authorities and national security agencies, the strategic locations across the country where the national strategic stocks shall be distributed and maintained.”

READ: FG clamps down on filling stations, others for faulty measuring and weighing equipment

The PIB is also proposing that facilities and infrastructure which are to be specifically defined by the soon-to-be-established Nigerian Midstream and Downstream Petroleum Regulatory Authority for the storage of national strategic stocks would be exempted from the provisions of the law relating to open access.

The other functions of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in the new PIB include; regulating and monitoring technical and commercial midstream and downstream petroleum operations in Nigeria, and determining appropriate tariff methodology for processing of natural gas, transportation and transmission of natural gas, transportation of crude oil, and bulk storage of crude oil and natural gas.

Jaiz bank ads

READ: DAPPMAN highlights critical role of warehousing and logistics in growth of downstream sector

Stanbic IBTC

What this means:

This is going to add more financial burden to Nigerians who are already complaining of the high cost of petroleum products, which has negatively impacted on the price of goods and services.

It can be recalled that the Federal Government had some time ago proposed a new charge on petroleum products for road maintenance across the country. This was roundly condemned by Nigerians and some stakeholders before the idea was later suspended.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

1 Comment

1 Comment

  1. Ugana Clement

    October 25, 2020 at 8:42 pm

    Please I want to buy Mini Bus things are not going down well with us 2kid of 7 and 5 yrs From Eastern Obolo in Akwa ibom State 07084150148

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Energy

Engineer Sanusi Garba assumes office as Chairman of NERC

The new NERC boss has assumed office today in an investiture event witnessed by other Commissioners of the Commission.

Published

on

Engineer Sanusi Garba, today, December 3, 2020, formally assumed office as the Chairman of the Nigerian Electricity Regulatory Commission (NERC).

This is according to the statement issued by the media team of the NERC via the official Twitter handle of the Commission.

Engineer Garba whose appointment was confirmed by the Nigerian Senate on Tuesday will be replacing Professor James Momoh, the outgoing chairman of the Commission.

Speaking at the handover ceremony today, the New Chairman of the Commission recognized the efforts and the hard work of Prof. Momoh and thanked the outgoing chairman for his contributions to the development of the Commission and the sector in general.

GTBank 728 x 90

However, Professor Momoh on his part pledged his continuous support to the Commission and thanked President Muhammadu Buhari for the opportunity to serve the country.

What you should know

  • The new Chairman of Nigerian Electricity Regulatory Commission (NERC), Engineer Sanusi Garba is a seasoned professional in the Nigerian Energy Supply Industry (NESI), and also a top officer in the Commission.
  • Prior to his nomination as the Chairman of NERC, Garba served as the Vice Chairman of NERC, under the leadership of Prof. Momoh. He also served as the Chief Executive of Katsina Steel Rolling Co. Ltd and the Director (Power) in the Federal Ministry of Power with responsibility for the Generation, Transmission and Distribution aspects of the electricity industry.
  • He also served as Executive Director (Generation) at the Niger Delta Power Holding Co. Ltd during which he provided technical and commercial leadership for the efficient operation of seven (7) NIPP thermal power plants.
  • Engr Garba, who is a seasoned professional has served on many Federal Government Committees including the Presidential Committee on Power Sector Reform (2007/8) and the Presidential Task Force on Power (2009/10).

Continue Reading

Energy

Buhari moves against DISCOs that collect money for prepaid meters

President Buhari has warned that tough measures will be taken against DisCos or their agents selling prepaid meters to their customers.

Published

on

Buhari moves against Discos and agents that collect money for prepaid meters

President Muhammadu Buhari said he will enforce tough measures against any electricity distribution company (Discos) or their agents selling prepaid meters to their consumers, against the directive that they should be distributed free.

According to a report from Punch, this disclosure was made by the Special Adviser to the President on Infrastructure, Ahmed Rufai Zakar, who represented President Buhari at the FGN/NLC-TUC ad-hoc committee on electricity tariff stakeholders engagement in Ibadan, Oyo State on Wednesday, December 2, 2020.

He said the President understands the plight of Nigerians on issues surrounding electricity and is determined to deal with bad elements.

(READ MORE: Power: Distribution of meters resumes in Lagos, Abuja, Kaduna and others)

What they are saying

He said, “We have made it very clear through the regulator’s direct order, as well as intervention from the Ministry of Power that the meters are to be provided to Nigerians at no cost. Even for meters that were paid for, there is the directive from the regulator to the discos that they would need to find a way to reimburse those citizens over time.

GTBank 728 x 90

“In cases where we find any disco or disco representatives selling the meters or exploiting Nigerians to be able to get meters by paying, we would take the full measures of the law. The President has mandated that these meters must be free. We have also said that they must come from local manufacturers. This would create jobs and revive our industry.

What you should know

  • The President had earlier directed that 6 million prepaid meters manufactured or assembled locally should be made available to electricity consumers to stop their opposition against estimated billing and even increase in electricity tariff.
  • While stating that he remains committed to the protection of poor and vulnerable Nigerians from increased electricity tariffs and arbitrary estimated billings, the President said he is working to ensure that Discos commit to increasing the number of hours of electricity supply everyday and improve on the quality of service.

Continue Reading

Energy

TCN restores collapsed electricity grid

TCN has now restored the electricity grid system which collapsed across the country over the past weekend.

Published

on

TCN MD Abdulaziz, four other directors receive appointment letters

The Transmission Company of Nigeria (TCN) has restored the collapsed electricity grid system across the country.

This was disclosed by the Acting Managing Director of TCN, Mr Sule Abdulaziz, during a media briefing on Wednesday.

According to the TCN boss, the system which collapsed on Sunday evening was restored within 40 minutes of the incident.

He said, “The company immediately went into action and stabilised the system in Abuja, before other parts of the country. There is nothing strange but it is normal for a system to collapse and that can happen in any country of the world.

“Since I came on board, we never had any system collapse and this one that happened on Sunday was restored immediately which is the fastest system collapse recovery. We are guarding the grid, we don’t want the system collapse to happen, but when it happens, the most important thing is what was done and how it was done to restore the system.”

GTBank 728 x 90

What you need to know

Three days ago, Nairametrics reported that the recent power blackout in the country was due to multiple trippings.

General Manager, Public Affairs, TCN, Ndidi Mbah, who made the announcement through a statement said the company had started the process of restoration to the national grid.

Mbah pointed out that the places that power is yet to be restored were Calabar, Makurdi, Jos, Gombe, Yola, Ugwuaji and Maiduguri axis.

Coronation ads

She stated, “The Transmission Company of Nigeria (TCN) regrets to inform electricity consumers nationwide that at 11:25 am today, the nation’s electricity grid experienced multiple trippings, which led to the collapse of the system.’

“TCN has since commenced grid restoration; power has been successfully restored to every part of the country, except Calabar, Ugwuaji, Markurdi, Jos, Gombe, Yola, and Maiduguri axes. The effort is however ongoing to ensure full restoration nationwide.”

Continue Reading