FG urged to promote gas as alternative to petrol

The torrential fall of the Naira which has turned the petroleum supply chain into a quagmire is fast eroding the projected gains after the federal government finally removed the petrol subsidy regime.

Oil marketers and government officials also appear not to be on the same page when it comes to the actual landing cost of Petroleum Motor Spirit and the impact that Nigeria’s fluctuating currency has had on the importation of the product.

Presently, it has been calculated that landing cost of Premium Motor Spirit, PMS also called petrol has averaged N1,009 a liter going by prevailing rate of N1,500 per dollar, from N720 per litre recorded in October 2023.

Though, this cannot independent be confirmed by our Correspondent as President of Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, said such figures may still be disputed because there are other associated costs like insurance, port charges and cost of hiring vessels.

It has also been reported that the country is paying about N907.5 billion subsidy on petrol monthly as the country’s foreign exchange crisis pushed the actual cost of litre of fuel to N1,203, signalling a return of subsidy regime.

However, an inside source at the Nigerian National Petroleum Company Limited, NNPCL, denied the insinuation.

The source said such reports are falsehood and should be disregarded as subsidy has gone.

“I think we should take a look at the provisions of the Petroleum Industry Act, PIA, which gives the NNPCL the responsibility to ensure energy security at any time. Though it operates as a limited liability company that pays dividend to shareholders, nonetheless the PIA vests that responsibility to the Company to provide buffer and secure the country’s energy demands and perhaps that is what is erroneously being interpreted as return of Subsidy.
The group CEO of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, had said at the birth of NNPCL that the country was spending over N400 billion monthly on petrol subsidy, but investigations into Nigeria’s petrol pricing dynamics have revealed a significant surge in the landing cost of petrol, attributed to the escalating exchange rate.
In his views, the chief executive officer, CEO, of the Center For The Promotion Of Private Enterprises, CPPE, Dr. Muda Yusuf, said, “Evidently, the currency depreciation has partially eroded the subsidy savings.”
According to Yusuf, this is because the cost of fuel importation has increased, when converted to naira, adding.

Besides, the mounting inflationary pressures has inherently increased the subsidy because the pump price had remained fixed while the landing cost has been on the increase.”
This he said is understandable in the light of the current hardships being experienced by the citizens.

“The government is unlikely to go back to full subsidy. Doing so, would amount to a complete reversal of a major pillar of the current reforms. Besides the government do not have the fiscal space to ensure full restoration of subsidy.
“The objective of the reform is actually to exit completely from fuel subsidy regime. But this will take some time as the economic fundamentals are still weak.” he advised.
Just recently the International Monetary Fund (IMF) claimed that the Nigerian government has, through the backdoor, resumed the payment of subsidies on petrol.

LEADERSHIP WEEKEND writes that on May 29, 2023, President Bola Tinubu announced an end to petrol subsidy, which caused a hike in the prices of goods and services in the country.
Following that announcement, the Central Bank of Nigeria (CBN) collapsed the different exchange rate regimes into one, with the value of the naira to the dollar weakening.
The IMF recently issued a statement on the conclusion of its Executive Board’s Post Financing Assessment with Nigeria, during which it expressed concerns that the government had capped the prices of fuel at retail stations.

The IMF advised Tinubu to completely stop the payment of subsidies on petrol to free funds to run the government.
In reaction, some Groups and individuals rejected the IMF position for what they described as “anti-masses policies”, and called on Nigerian government to explore home grown options that would fix the economy and better the life of the people.
But the minister of Information and National Orientation, Mohammed Idris, on Wednesday, said petrol importation in the country reduced by 50 per cent since the withdrawal of the fuel subsidy.
Idris said this at the third edition of the ministerial press briefing series, where the coordinating minister for Health and Social Welfare addressed journalists in Abuja.

He said,“Petrol importation has been reduced by 50 per cent since the withdrawal of the fuel subsidy. The Nigerian Stock Exchange All Share Index crossed the 100,000 mark – its highest ever, mainly due to the pragmatic reforms initiated by the President, which inspired investor confidence in the Nigerian economy.
It is also encouraging to state that oil production has risen from 1.22 million barrels per day in the second quarter of 2023 to 1.55 million barrels per day in the fourth quarter of 2023.”
President Bola Tinubu announced the removal of petrol subsidy during his inaugural address on May 29, 2023, saying, “Subsidy is gone.”

Idris notes that President Tinubu has also given a directive for the design of a Social Security Unemployment Programme to cater for unemployed graduates.
Equally, President Bola Ahmed Tinubu, has stated that the decision of his administration to remove subsidy on Premium Motor Spirit (PMS) was premised on the need to ensure long-term energy security and economic prosperity of Nigeria.

Tinubu stated this in his keynote address at the opening ceremony of the 7th Nigerian International Energy Summit (NIES) at the Banquet Hall of the Presidential Villa, Abuja on Tuesday, 27th February, 2024.
The president who was represented at the event by the minister of Information and National Orientation, Mohammed Idris, noted that the petroleum subsidy had, over the years, strained the country’s economic resources, leading to inefficiencies and, most importantly, hindering ability to invest in critical areas of energy security.

He admitted that the decision to remove the petroleum subsidy was a challenging one, but stressed that it was a step that must be taken to secure Nigeria’s energy future and foster economic growth.
He added that by removing the subsidy, “We are creating a more transparent and accountable energy sector. The funds that were previously allocated to subsidizing petroleum products are now redirected towards developing and upgrading our energy and other social infrastructure”.

However, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said the only way out of this quagmire is to tap and explore the country’s vast gas deposits and bring it into useful disposition.

The PETROAN president Billy Gillis-Harry, in a conversation with our Correspondent, said government should escalate activities around gas adoption as alternative to petrol.
He said his association has made significant strides in promoting the adoption of Autogas in vehicles across the country.

Our correspondent reports that PETROAN, is working such that over 7,000 filling stations under the association be converted into gas dispensing outlets. These conversion centers will be used for dispensing Autogas, including compressed natural gas (CNG) and Liquefied Petroleum Gas (LPG), into vehicles.

The body is engaging in various intervention projects, including collaborations with manufacturers of conversion kits for LPG, LNG, and CNG. Notably, they held discussions with their Asian partners, primarily from India, who are eager to support their initiatives.
He advocated that the government’s financial support for consistent vehicle conversion to run on gas would be a more effective form of palliative compared to direct cash transfers to vulnerable households.

Such an intervention, he believed would significantly reduce the dependence on petrol and alleviate the burden of petrol imports due to foreign exchange constraints.
The adoption of gas as an alternative fuel source is seen as the most viable solution to mitigate the current high cost of petrol.

With 7,000 retail outlets already registered for conversion centers, government funding to support these conversions, which would be another form of palliative for the public.
PETROAN has partnered with a company capable of producing 70,000 conversion kits monthly, enabling them to target the conversion of 70,000 vehicles each month. The vision is to have hundreds of thousands of vehicles running on gas within the next three to six months.

In support of this initiative, oil marketers represented by the Depot and Petroleum Marketers Association of Nigeria (DAPPMAN) have pledged to donate 100 CNG buses to help ease the impact of petrol subsidy removal.

Furthermore, President Bola Tinubu announced that his administration has allocated N100 billion between now and March 2024 to acquire 3,000 units of 20-seater buses powered by CNG.

The drive towards Autogas adoption and the establishment of conversion centers signifies a significant step towards reducing the country’s dependence on traditional petrol-based fuels.

According to the Minister of State Petroleum Resources (Oil), Sen

Heineken Lokpobiri, said, in spite of the abundant oil and gas reserves in the country, Nigeria suffers from energy poverty as the reserves have not translated to economic prosperity contrary to what obtained in the Middle East.

He therefore implored the summit to unravel what other oil producing countries were doing to bring economic prosperity to their countries that Nigeria hasn’t done.

He noted that the task of exploring oil reserves should be given to those who have proven capacity, both financially and technically to be able to explore oil and gas reserves for the benefit of Nigerians and the global energy landscape, adding that, the easiest way to guarantee energy security in Nigeria was to get the right investment.

He also noted that, in exploration, the target should be to explore these resources in a more environmentally friendly and sustainable ways.

Lokpobiri charged the delegates at the summit to come up with brilliant ideas in ensuring that we have energy security in Nigeria and ramp up production. “The only way we can guarantee energy security is to increase production in the upstream so that we will be able to provide the right quantity to service our obligations, both locally and internationally”.

The battle to shore up the value of the Naira and clean up the financial system continued yesterday with the Central Bank of Nigeria (CBN) revoking the operating licences of 4,173 Bureaux De Change (BDC).

Invoking its powers under the Bank and Other Financial Institutions Act (BOFIA) 2020, Act No. 5, and the Revised Operational Guidelines for Bureaux De Change 2015 (the Guidelines), the apex bank accused the affected BDCs of non-compliance with various regulatory provisions.

The allegations against them, according to the CBN Acting Director of Corporate Communications, Hakama Sidi Ali, are: failure to pay all necessary fees, including licence renewal, within the stipulated period in line with Guidelines; non-rendition of returns in line with the Guidelines; and non-compliance with guidelines, directives and circulars of the CBN, particularly Anti-Money Laundering (AML); Countering the Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF) regulations.

The CBN said that in a bid to ensure better compliance and regulation of the Bureau de Change sector in Nigeria, it had embarked on revising the regulatory and supervisory guidelines for their operations.

“Once the revised guidelines are implemented, all stakeholders in the sector will be obligated to comply with the new requirements,” the CBN said.

It asked the public to take note of this development and follow the guidelines accordingly. The list of the affected Bureaux De Change operators can be found on the CBN’s website at www.cbn.gov.ng.

The revocation of the BDCs’ licences came just days after the CBN allowed BDC operators to resume forex transactions at the Nigerian Autonomous Foreign Exchange Market (NAFEM) – the official market, and released draft guidelines proposing significant changes to how BDCs operate.

Although the licence revocation has sent shock waves through the industry, observers of the financial sector seem not to have been surprised as the apex bank on Monday excluded the affected BDCs from access to dollar sales from the official market.

Of the 4,800 CBN-licenced BDCs, only 785 had access to forex from the official window on Monday after the apex bank resumed sale of dollars to the operators.

The CBN penultimate Friday raised the minimum capital requirements for BDC operators to N2 billion for Tier 1 licence holders and N500 million for a Tier 2 licence under the CBN’s revised Regulatory and Supervisory Guidelines for Bureau de Change (BDC) Operations.

Before now, a general licence cost N35 million.

The CBN and the Economic and Financial Crimes Commission (EFCC) had earlier launched a clampdown on street trading of foreign exchange by BDCs, in a multi-pronged approach by the authorities to address perceived irregularities in the forex market.

Some BDC operators were accused of manipulating the forex exchange which is said to be largely responsible for the current state of the national currency.

Justice Mohammed Nasir Yunusa of the Federal High Court, Kano on Wednesday convicted and sentenced three illegal bureau de change operators to three years imprisonment for operating without a requisite licence.

The convicts, Umar Ibrahim Muhammad, Abubakar Yakubu Garba and Muhammad Tijjani, were jailed after pleading guilty to one-count separate charges of illegal dealing in foreign currency without an appropriate licence.

Over 70 million bank customers are at risk of losing access to their accounts when the Central Bank of Nigeria’s directive on restricting accounts without Bank Verification Numbers and National Identification Numbers goes into effect.

The CBN had on December 1, 2023, in a circular directed that a ‘Post no Debit’ restriction be placed on all bank accounts without the BVN and NIN from Friday, March 1, 2024.

‘Post No Debit’ is a term used to describe a restriction imposed by banks on specific accounts, preventing customers from making withdrawals, transfers, or any other debits from such accounts. This measure effectively freezes the funds in the account, rendering them inaccessible for the duration of the restriction.

The circular, jointly signed by the Director, Payments System Management Department, Chibuzo Efobi; and Director, Financial Policy and Regulation Department, Haruna Mustapha, read, “It is mandatory for all Tier-1 bank accounts and wallets for individuals to have BVN and/or NIN. It remains mandatory for Tiers 2 & 3 accounts and wallets for individual accounts to have BVN and NIN.

“For all existing Tier-1 accounts/wallets without BVN or NIN: Effective immediately, any unfunded account/wallet shall be placed on ‘Post No Debit or Credit’ until the new process is satisfied. Effective March 1, 2024, all funded accounts or wallets shall be placed on ‘Post No Debit or Credit’ and no further transactions permitted. The BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024.”

The circular went on to warn banks in the country that a “comprehensive BVN and NIN audit shall be conducted shortly and where breaches are identified, appropriate sanctions shall be applied.”

As the deadline approached, some banks sent out messages to their customers to regularise their accounts in line with the new CBN directive. While some asked customers to visit their physical branches, others made provisions for customers to update their accounts online.

FirstBank Nigeria in an email to customers said, “Please ensure that your Bank Verification Number and National Identification Number are linked to your account number on or before February 29, 2024.

“You can seamlessly update your account information with your BVN and NIN by visiting any FirstBank branch close to you. Please note that the Central Bank of Nigeria through its circular: PSM/DIR/PUB/CIR/001/053 dated December 1, 2023, has directed that effective March 1, 2024, all funded accounts without BVN shall be placed on ‘Post No Debit or Credit’ and no further transactions permitted.”

Ecobank Nigeria wrote, “Please be informed that the Central Bank of Nigeria through its circular dated December 1, 2023, has announced that all accounts without Bank Verification Number and/or the National Identity Number would not be able to carry out transactions from March 1, 2024.

“Consequently, you will be required to update your account information with your National Identification Number and Bank Verification Number if you have not done so already.” It, however, offered an online solution.

Fintech firm, OPay, also called on its customers to complete the regularisation of their accounts by linking their BVN or their NIN as mandated by the apex bank, offering them both online and offline options.

A Tier-1 account refers to a bank account that can be opened with minimal or no form of documentation. Such an account can be opened with a passport photograph and has a limit of N50,000 deposit and an operating balance of N200,000 and is mostly not linked to the BVN and is targeted at the unbanked population.

This space is dominated by fintech firms and there are concerns that the lax Know Your Customer requirements are loopholes that are being used to perpetuate fraud.

The National President of the Association of Mobile Money and Bank Agents in Nigeria, Sarafadeen Fasasi, who called for an extension of the deadline, said while the policy was a good move to improve banks’ KYC requirements, its implementation was worrisome.

He said, “We are all aware that it is a good policy for the system for us to have good KYC, but unfortunately, what we have a challenge with is the implementation. This is another wrong implementation. Before you give a deadline, you must have provided the access points. As of today, we have about 104 million NINs out of 200 million people expected to have NINs. So, there is a gap of about 100 million.

“It is the same thing with the BVN, which as of the last report was about 59.9 million out of 134 million expected bank accounts. That means we have over 70 million accounts, which will be affected.”

According to data from Statista, as of 2021, the number of active bank accounts in the country was around 133.5 million, with savings accounts making up about 120 million.

Fasasi claimed that the National Identity Management Commission lacked the capacity to deliver 100 million NINs within the required timeframe.

He said, “The question is, can the NIMC deliver the gap of about 100 million NINs within the deadline? The answer is no, so why should this drive Nigerians into another problem? For BVNs, we have a huge gap to deliver and only bank branches can enrol BVN as of today.

“Based on our research, about 300 local government areas out of the 774 LGAs in Nigeria have no bank branches; so, who are those who are going to provide BVN enrolment at those LGAs? It means that people are going to run into trouble.

“Also, the highest that the banks have done is 500,000 enrolment per month. We are not ready for this. Why the rush? Why not plan that every month, this is what we want to achieve based on our capacity and access points?”

He lamented that this was coming at the same time as the National Communications Commission had directed telecom companies to bar mobile lines without the NIN.

“Who is pursuing us in Nigeria in this critical period where everyone is groaning under adverse economic conditions? They want to add extra trauma; I think we need to reconsider this,” he concluded.

The Chairman, Consumer Rights Awareness, Advancement and Advocacy Initiative, Moses Igbrude, said the apex bank ought to assess the level of compliance before wielding the big stick.

He said, “You must check the challenges and the parties who are responsible for the NIN and BVN. What of Nigerians in the Diaspora? They should give more time for this linkage so that they will not disrupt the banking system.

“It is a multifaceted issue involving many players. What is the infrastructure required for them to work? Otherwise, they will use a legal way to disenfranchise a lot of people.”

The President, Bank Customers Association of Nigeria, Dr Uju Ogubunka, called for an extension of the deadline to enable more bank customers regularise their accounts in line with the CBN directive.

Ogubunka told Saturday PUNCH, “We know that some of our members have linked their accounts with the BVN/NIN as directed by the CBN. At this point, I think it will be wise to give an extension, because the telecom network has been a bit inclement and, then of course, you talk about power; some of us were unable to charge our phones for some time because there was no power. And these things are happening almost everywhere.

“People are willing to do what they’re supposed to do, but conditions within the environment are a bit difficult. So, I will personally suggest that we consider what is happening and give some extension.”

He went on to suggest that a test run where restrictions would be placed on some affected accounts might be of help in sensitising people to the importance of the directive.

“Another thing that they can do is maybe do a test run so that people will know that it is something that can be done. Some people may not even believe that it is possible to restrict transactions. So, if you do a test run for one day or even a few hours, you announce that those who have not linked up will be unable to access their accounts temporarily, maybe for 24 hours or 12 hours, then give an extension. That should help,” Ogubunka added.

He stated that there had been no reports that banks had started to restrict bank accounts without the BVN and NIN.

“No one has reported that to us yet. But then, they may not know until they want to make use of the accounts. It is not as if they are using the bank accounts every minute of the day. It is only when they want to make use of it and then see that they can’t get through, that is when they have an issue. So far, we don’t have any report on that,” he said.

Multiple bankers, who spoke with Saturday PUNCH on condition of anonymity, said the banks had not yet started to restrict accounts without the BVN and NIN.

They said directives had been issued from their headquarters to create a seamless linking process to avoid account deactivation.

A bank official said, “No one is deactivating accounts yet. They have been sending emails to customers to calm down so that a more seamless linking process will be communicated to customers. They will be reached via text and email. Some people used the NIN to open or update their accounts already so they won’t need to do it again.”

On the number of possible affected customers, the official stated, “We haven’t got the affected number yet. It has to be spooled by our IT team from the backend.”

Another official confirmed the directive to assist more customers via email.

“The deadline still stands; however, not all accounts are blocked because some opened theirs with the national ID from the inception. But we will be reaching out via email and text,” the official wrote to one of our correspondents.

A News Agency of Nigeria report on Friday revealed that customers continued to besiege various bank branches in Lagos to meet the CBN deadline for linking BVN and NIN to their accounts.

The customers also asked the CBN to extend the deadline for them to link their BVNs and NIN with their accounts.

With the implementation of the directive, there was a significant gathering of customers at various banks as early as 8am on Friday to link their NINs with their bank accounts.

A security officer at a Guaranty Trust Bank branch in the Abule Egba area, while addressing customers who were eager to gain entry into the banking hall, said the message sent out by the bank to its customers concerning the directive was a random one.

He said not all customers that got the message were affected by the directive. This got the customers infuriated, as they said the bank should have sent out messages to only those affected. At another GTB branch in Egbeda, the bank advised customers to register online using specified codes displayed on the walls outside the banking hall.

However, at Polaris Bank, the crowd was not allowed to converge, and those who went into the banking hall were told by the customer service desk to produce their NIN slips.

Those without the slips were turned back. Customers who explained their mission to the bank’s security officers before entering the banking hall were told to get the slips.

Two bank employees used mini computers to do the first registration at the entrance before the security guards allowed the customers into the banking hall.

At Providus Bank on Nnamdi Azikiwe Road, customers were given forms and were assisted with registration simultaneously. The situation was similar at Wema Bank on Broad Street and other banks visited on Lagos Island.

Meanwhile, calls and text messages sent to the CBN spokesperson, Hakama Sidi, yielded no response as of the time of filing this report.

Abia state Governor, Alex Otti, says his administration is looking at the issue of N35,000 wage award approved by the federal government for workers with a view to implementing it.

Governor Otti made the disclosure when he received in the audience, the executive members of the Nigeria Labour Congress (NLC), Abia State Council, who were on a working visit. He said that a committee has been set up to that effect and has submitted its first report.

He however said that he directed the Committee to deepen its work and report to him, adding that he has directed the Commissioner for Finance to look at the discriminatory salary structure for health workers in the state as it concerns the issue of consolidated health salary structure (CONHES).

The Governor said that his administration will critically look into arrears of salary owed Abia workers in various MDAs and parastatals including ABSUTH, ASUBEB, ASCETA, Abia state Polytechnic, primary school teachers among others by the previous administration.

He also said that a team is working with the Nigerian Union of Pensioners to reach a resolution on how to defray the pension arrears owed pensioners in the state.

Governor Otti observed that there are still bad eggs in the system who still engage in padding of salaries and other vices, imploring the NLC to help identify such people who are stealing from the government.

“There are a lot of people who are collecting salaries but are not coming to work. My challenge to NLC is to help us, what they (ghost workers) are doing, they are stealing from you. It is very important you take it as a responsibility,” he said.

He noted that his administration may not be sharing money as was the case in the past, but that he is busy creating a conducive atmosphere for survival of every Abia citizen as well as bringing back all companies that left the state due to infrastructural decay.

Earlier, the State Chairman of the NLC, Comrade Ogbonnaya Okoro, appealed to the Governor to consider implementing the N35,000 wage bill approved for workers by the federal government, address the high-handedness of some government appointees against civil servants, offset arrears of salaries ranging from 3-30 months owed various categories of workers by the previous administration.

Comrade Okoro also used the forum to draw the attention of the Governor to the verification issue that has denied some workers their salaries for about 7 months now, alleging victimization of workers by Valumbra floor mill, Aba among other issues.

He commended Governor Alex Otti for his numerous achievements in office including keeping to his promise of paying salaries to Abia workers on 28th of every month, urging the Governor to see Abia workers as integral part of his administration.

“You are doing well and every Abian is happy. Things are happening. It shows that we did not make a mistake when we said we want change,” the NCL boss added.