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DOMESTIC AIRLINES ASK COURT TO TERMINATE FG-ETHIOPIAN DEAL

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Ethiopian Airlines

The national carrier project may be stopped by the court as domestic airlines have taken the Federal Government and its foreign technical partner and majority shareholders to court.

About eight local airlines and their association took the government to court on Friday, listing Nigerian Air, Ethiopian Airlines, Minister of Aviation, Hadi Sirika, and Attorney-General of the Federation, Abubakar Malami, as defendants.

Among other prayers, the indigenous airlines want the court to stop the national carrier deal and withdraw the Air Transport Licence already issued to Nigeria Air by the Federal Government/Nigerian Civil Aviation Authority.

They also claimed that the firm which served as Transaction Adviser for the transaction, was incorporated in March last year and alleged that the company was linked to the aviation minister.

The local airlines further alleged that ATL issued to Nigerian Air did not pass through the normal security clearance.

According to them, the Federal Government’s partnership with Ethiopian Airlines on the project will send domestic airlines out of business by opening up the domestic air travel market to Ethiopian Airlines.

In September this year, the Federal Government named Ethiopian Airlines Consortium as preferred bidder for Nigeria Air. The Minister of Aviation, Hadi Sirika, announced this in Abuja.

But it was learnt on Sunday that the Registered Trustees of the Airline Operators of Nigeria, including Azman Air, Air Peace, Max Air, Topbrass Aviation and United Nigeria Airlines, filed a suit against the move on Friday.

The defendants in the suit include Sirika, Nigeria Air Limited, Ethiopian Airlines, and the Attorney-General of the Federation, Abubakar Malami. The suit was filed in the Federal High Court of Nigeria in the Lagos Judicial Division.

Four defendants

The first, second, third and fourth defendants in the suit were Nigeria Air Limited, Ethiopian Airlines, Senator Hadi Sirika, and Attorney-General of the Federation.

The court summoned Sirika and other defendants named in the suit to cause an appearance to be entered for them to the summons within 30 days after service of the summons on them.

The court said the summons was for the determination of several questions. It outlined the questions to include, “1. Whether on proper construction of the Companies and Allied Matters Act 2020, SEC (Securities and Exchange Commission) Nigeria Consolidated Rules & Regulations 2013 (as amended in 2022), Nigerian Investment Promotion Commission Act, International Civil Aviation Organisation Convention, Civil Aviation Act, Public Procurement Act, Concession Regulatory Commission (Est.) Act, 2005, Federal Competition and Consumer Protection Act, Procurement Processes for Public Private Partnership in the Federal Government under the National Policy on Public Private Partnership (N4P) and Nigeria Civil Aviation Regulations, 2015 and other regulatory statutes on aviation, companies and investment laws in Nigeria; the action, conduct and or decisions in the sale of the shares and operations of the 1st defendant is not invalid, null & void.

“2. Whether on construction of International Civil Aviation Organisation Convention, among others, the entire administrative actions and decisions of the third and fourth defendants in the sale of the shares of the 1st defendant to the 2nd defendant and its consortium is not invalid, void and of no effect having regard to the process embarked upon and the extant local and international laws and regulations on aviation including the terms and condition stated in the request for proposal.

“3. Whether, on a construction of Section 78 (1) & (2) of the Companies and Allied Matters Act 2020, Rule 406(2) of SEC Nigeria Consolidated Rules & Regulations 2013 (as amended in 2022), section 20 of the Nigerian Investment Promotion Commission Act, Article 7 of the International Civil Aviation Organization Convention, section 33 of the Civil Aviation Act Cap C13 LFN 2004 (as amended in 2006); the 2nd Defendant and its consortium were competent and qualified to bid for shares in the 1st Defendant and commence business accordingly.

“4. Whether, on a construction of Sections 4 & 5, among others, of the Infrastructure Concession Regulatory Commission (Est.) Act, 2005; Sections 24 & 27, among others, of the Public Procurement Act; and Clauses 2, 3 and 4 of the Procurement Processes for Public Private Partnership in the Federal Government under the National Policy on Public Private Partnership, sections 76-81 of the Federal  Competition and Consumer Protection Act; the selection of the 2nd Defendant and its consortium as the sole bidder in the bidding exercise for the Nigeria Air Project conducted by the 1st, 3rd& 4th Defendants is proper, lawful and valid?

“5. Whether the entire process for the sale and transfer of shares of the in the 1st Defendant to the 2nd defendant and its consortium by the 3rd and 4th Defendants is in line with the provisions of the Infrastructure Concession Regulatory Commission (Est.) Act, 2005, Federal  Competition and Consumer Protection Act, International Civil Aviation Organisation Convention, the National Policy on Public Private Partnership, sections 76-81 of the Federal  Competition and Consumer Protection Act and does not affect the entire process including the selection, approval or grant to the 2nd Defendant and its consortium by the 3rd and 4th Defendants is not invalid and thereby entitling the entire process to fresh bidding  exercise?”

The domestic airlines demanded, in the court document, an order directing the immediate revocation and cancellation of the Air Transport License issued by the Nigerian Civil Aviation Authority to the 1st Defendant.

N2bn damages

They also demanded an order of N2bn only as damages “for the injury suffered by the Plaintiffs and still suffering as a result of the wrongful exclusion of the Plaintiffs, wrongful action; unlawful bidding and selection processes and their wrongful projection of the plaintiffs as not having properly, rightly and timely bid for the Nigeria Air project.”

The Federal Government’s choice of Ethiopian Air¬lines as the core investor and technical partner in the Nigeria Air project, had been described as a win for the East African carrier and a huge loss for Nigeria.

Some critics argued that instead of giving Ethiopian Airlines a 49 per cent stake in Nigeria Air, there could have been better partnership arrangements that would benefit Nigeria more.

The Assistant General Secre¬tary, Aviation Round Table, Olumide Ohunayo, said though Ethiopian Airlines had been a successful airline in Af¬rica, its partner carriers on the continent had all failed.

Ohunayo named the failed partner carriers to include Congo Air¬ways, Tchadia Airlines, Zam¬bia Airways and others, adding that it was on Asky Airline that was surviving as it (Asky) just upped its fleet of aircraft to about 12.

The Chief Execu¬tive Officer, Centurion Security Limited, Capt. John Ojikutu (retd.), had said in an interview with The PUNCH that similar partnerships in the past by the defunct national carrier, Nigeria Airways, with KLM and South African Airways in the early 1990s did not benefit Nigeria.

He said this new move with Ethiopian Airlines would not be different from the others.

Aviation minister

As analysts and operators raise diverse concerns about the national carrier project, the government through its aviation minister, Sirika, gave reasons why it picked Ethiopian Airlines as the preferred bidder for Nigeria Air.

Sirika told journalists in Abuja on Thursday that Ethiopian Airlines was the only airline that responded to the government’s requests for expression of interest and fulfilled all the stipulated conditions laid down by Nigeria.

He said other airlines in the world ignored Nigeria’s call to join hands with the country to float a national carrier despite the fact that he personally went to the airlines and met with them at several air shows and international aviation events to convince them.

Sirika, however, said the airline proved that it was not only efficient and prosperous by registering over $1bn profit after tax even in the wake of COVID-19, but had continued to flourish despite the challenges in the aviation sector globally.

He said, “We did not cede Nigeria Air to Ethiopian Airlines. It is the only airline in the world that made $1bn profit even during the COVID-19 pandemic. It is the most prosperous, efficient and leading airline in the African continent and it was the only airline that responded to our request for partnership to run the airline after many months of advertisement of expression of interest.

“Even after some interested persons asked Nigeria to extend the time of EoI and we did, none of them showed interest. Officials of the Ministry of Aviation led by me personally visited some of the leading airlines across the world and pleaded with them to take up the partnership with Nigeria to set up the airline.

“None of them signified interest except Ethiopian Airlines, which has been allotted 49 per cent shares, while Nigerian institutional investors take up 45 per cent and the Federal Government will take up only five per cent.

“The choice of Ethiopian Airlines is good for Nigeria and it is in line with the African Union Agenda. Our desire is for Africa to come together and lead the African aviation market through our new partnership with Ethiopian Airlines. The partnership will also reduce cost of operations and airfares for Nigerian and African air travellers as opposed to the current situation.

“Contrary to what people think, let it be known that Ethiopian Airlines emerged as the preferred partner of Nigeria Air through a transparent and credible process that cannot be faulted because we want the project to succeed so that Nigeria can have an airline that does not suffer the fate of the former Nigeria Airways.”

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OIL-PRODUCING STATES BORROW N1.3TN AMID N6.4TN WINDFALL

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Minister of Finance, Budget and National Planning, Zainab Ahmed

•PANDEF, others ask N’Delta governors to showcase development projects

•Oil-producing states received N1.9tn as derivation fund under Buhari – Minister

•13% derivation includes DESPADEC funds, money judiciously spent, says Delta

The total debts of 10 oil-producing states rose from N2.04tn in December 2015 to N3.35tn as of June 2022, according to sub-national debt reports of the Debt Management Office.

This means that a total of N1.31tn was borrowed within a period of about seven years by the states.

The 10 states are: Rivers, Akwa Ibom, Delta, Edo, Abia, Ondo, Imo, Cross River, Bayelsa and Lagos.

This came as findings by The PUNCH show that the oil-producing states received the sum of N6.4tn in federal allocation and 13 per cent derivation fund.

The Federal Government disbursed a total of N1.98tn as a share of the 13 per cent derivation fund to oil-producing states, the Minister of Finance, Budget, and National budget, Zainab Ahmed, disclosed on Thursday, at the sixth edition of the PMB Administration Scorecard.

She stated that the amount was paid in seven years despite some of the funds preceding the current administration.

She said, “One of the key functions of the Ministry of Finance Budget and National Planning is in support of states. The President understands very clearly that this economy wouldn’t have been growing consecutively or wouldn’t have been able to pull ourselves out of recession twice.

“We wouldn’t have been able to grow consistently without enabling the states to grow because it is a federation.

“Mr. President has been very uniquely generous in his support to states. I can say no president has provided the level of support provided to the states of the Federation.

“He understands that the federating units need to work together as one to achieve the targets that he has set for the country. So, everybody goes to support sub-national governments.

“In seven years, we have disbursed N1.98 trillion in funds to oil-producing states.”

The PUNCH recalls that the 13 per cent derivation fund has been a controversial issue after comments by Rivers State Governor, Nyesom Wike, alleging that the oil-producing states had refused to disclose their own shares paid by the Federal Government from 1999 to all the Niger Delta States.

Ahmed further said that the government had supported states of the federation N5.03tn and an additional $3.4bn since 2015.

She said, “With respect to sub-national governments, the ministry goes over and above its statutory role to provide financial support to States:

“A total of N5.03tn plus an additional $3.4bn has been released to states by the Federal Government over the life of this administration.

“Each of these payments has distinct repayment terms with some given as grants and others as loans with favourable repayment terms, including a long amortisation period.

“The support covers the 13 per cent Derivation refund to oil-producing states, refunds for construction of federal roads, ecological support, support from the Development of Natural Resources Fund, Paris Club refunds, support from the Stabilisation Fund, COVID intervention amongst others.”

Reeling out the details, Ahmed said N445bn was given as salary bailout to states except Akwa Ibom, Anambra, Jigawa, Lagos and Yobe in September 2015, while N340bn was disbursed to states except Lagos and Osun as excess crude loan. Also, N610bn was allocated to all states, except Lagos, as a budget support facility.

Other support included: $2.67tn as an outright Paris Club refund; N750m disbursed in 2021 as an SFTAS reward; and N600bn paid as withdrawal from payment of subsidy in April 2022.

Speaking further, the minister revealed that the non-oil sector had continued to maintain high-level performance in terms of revenue generated, adding that it was currently the mainstay of the nation’s economy.

She said that the sector contributed N1.71trn out of the total revenue of N4.19trn, an outturn of 100.7 per cent compared to the budget projection.

“Today, I call your attention to the very high performance of the non-oil sector of our economy. As of September 2022, the Federal Government’s share of oil revenues to fund the budget was N535.5bn representing 32.6 per cent performance), while non-oil tax revenues totalled N1.71tn an outturn of 100.7 per cent compared to the budget projection.

“The non-oil revenue share of funding the Federal Government has improved. We have been able to move from contributing 35 per cent to the federal budget to contributing 73 per cent to the financing of the federal budget.”

N6.4tn windfall

Oil-producing states got N4.46tn from Federation Account Allocation Committee between 2016 and 2020, according to data from the National Bureau of Statistics collated by The PUNCH. When combined with the N1.98tn allocated to oil-producing states as a share of the 13 per cent derivation, the amount moves to N6.4tn.

Within the period under review, Delta got the highest allocation of N804.27bn while Cross River got the least, N147.86bn.

The allocation of other states were as follows: Akwa Ibom, N769.19bn; Lagos, N523.63bn; Rivers, N675.54bn; Edo, N255.32bn; Abia, N225.47bn; Ondo, N250.86bn; Imo, N234.37bn; and Bayelsa, N575.39bn.

According to the NBS, FAAC gets oil revenues and related taxes, revenues from the Nigerian Customs Service, company income tax, any sale of national assets as well as surplus and dividends from state-owned enterprises.

Kogi oil-producing status: Enugu’s exclusion from 13% derivation injustice, say Ohanaeze, state

N1.3tn debt

Meanwhile, the total debts of 10 oil-producing states rose from N2.04tn in December 2015 to N3.35tn as of June 2022, according to sub-national debt reports of the Debt Management Office.

A further breakdown showed that in 2015, a total of N1.22tn was from domestic creditors while $1.84bn (or N817.27bn at the Central Bank of Nigeria’s exchange rate of N444.17 per dollar as of November 1, 2022) was from external sources.

By June 2022, N2.42tn was borrowed from domestic sources while $2.31bn was from foreign sources such as the World Bank and African Development Bank.

For sub-national domestic debts, Lagos leads with the most debt, from N218.54bn domestic debt in 2015 to N797.31bn by June 2022.

It is followed by Delta, whose debt rose from N320.61bn domestic debt in 2015 to N378.88bn by June 2022.

Third on the list is Rivers, from N134.97bn domestic debt in 2015 to N225.51bn by June 2022.

For foreign debt, Lagos leads with the most debt, from $1.21bn in 2015 to $1.27bn by June 2022.

It is followed by Edo, whose external debt increased from $168.19m to $268.31m.  Cross River is next, from $136.4m to $215.74m within the period under review.

PANDEF, Kio-Briggs kick

The Pan Niger Delta Forum and popular rights activist, Ann Kio-Briggs, have taken a swipe at the Federal Government over claims that the N1.98tn it disbursed to the Niger Delta region was not commensurate with the level of development in the region.

The National Publicity Secretary of PANDEF, Ken Robinson, said, “As you know, the fact of the matter is that it is the resources of the Niger Delta people that the Federal Government of Nigeria is plundering, wasting over the years. To say that they have given the Niger Delta N1.98tn as reported and all that is unnecessary. What is N1.98tn?

“How much has been taken away from the Niger Delta compared to the devastation that has been done to the Niger Delta environment and the livelihoods of the people that have been decimated?

“And all these complicate or increase the social and economic challenges of the area. There are more people who ordinarily would have been involved in farming or fishing who are now looking for jobs.”

The PANDEF spokesman explained that no amount of funds allotted to the crude oil and gas-rich region was too much, being the goose laying the golden egg.

He, however, said it was not an excuse for the poor governance in the country, which he said was not peculiar to the Niger Delta alone.

 “And I think that some of these governors in the Niger Delta should also do more in terms of showcasing what they are doing with the resources that they got. And that we will say that whether the level of development is commensurate to the amount of money received is relative because of the difficult terrain the Niger Delta is faced with in terms of developmental challenges.”

On her part, Kio-Briggs said the Federal Government must be specific and come up with facts as to which agency or governors the amounts they claimed to have disbursed was given for purposes of accountability.

She said, “First of all, I don’t like it when the government says that they have disbursed so much money.

“When you want to give information, you have to give credible, verifiable, truthful information to people, so that people can make up their minds. You can’t make up their minds for them.

“Why do I say this? You can’t just say you have disbursed so much to Niger Delta, no. Say I have disbursed N2.3trillion hypothetically to the Niger Delta Development Commission; I have disbursed N5. 2tn to the Ministry of Niger Delta.”

Continuing, Kio-Briggs stated that the people of the region were not fools to believe hook, line and sinker anything the Federal Government says.

Delta debunks claim

Meanwhile, Governor Ifeanyi Okowa of Delta State has said the state is the most solvent in the country, with enough credit to liquidate all outstanding fiscal obligations.

Okowa spoke through his Chief Press Secretary, Mr Olise Ifeajika, while speaking to The PUNCH on Thursday in Asaba.

He said, “This 13 per cent accrued to the oil-producing area for the past seven years included what NDDC and DESPADEC gave. But the one the state commissioner for finance stated earlier was about the discounting N240bn Nyesom Wike raised.

“Okowa could have taken the option to discount the entire N240bon expected from the 13 per cent derivation refunds as was done by other states but decided to take only N100 billion to complete some legacy projects.

“Governor Okowa, being a prudent and considerate leader, chose to keep the balance of the funds for the in-coming administration.”

The State Commissioner for Finance, Mr Fidelis Tilije, had recalled that Okowa administration faced serious financial challenges at inception in 2015, a situation that necessitated some borrowings at that time. You will recall that when the administration of Sen. Dr. Ifeanyi Okowa came on board, the economy of this state and that of Nigeria was clearly in dire straits.

“Therefore, a lot of rejiging had to be done for us to be able to survive and pay salaries. The salary bailouts was not for Delta state alone.”

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FUEL SCARCITY: NO PLANNED PRICE HIKE, SAYS FG, QUEUES SPREAD

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Mele Kolo Kyari OFR. Group Chief executive officer of the Nigerian National Petroleum company limited (NNPC)

•There will not be fuel price hike during Yuletide period, says govt

•NMDPRA assures motorists current stock can last for 34 days

•Govt can’t continue subsidy amid diversion – NNPC source

For the first time in weeks since the scarcity of Premium Motor Spirit, popularly called petrol, began, the Federal Government opened up and declared on Wednesday that there was no plan to increase the pump price of petrol, at least during the Yuletide season.

However, the government’s comments came amid a worsening and persistent fuel scarcity, which spread further on Wednesday across the country. Also, the cost of the commodity rose to as high as N285/litre in some filling stations in Abuja.

Oil marketers stated that the black market cost of petrol in Lagos had risen to about N450/litre, while it sold for more than that price in some other states.

But the government disclosed on Wednesday that there was fuel supply stock that could last the country for 34 days.

This came as a senior official of the Nigerian National Petroleum Company Limited confided in The PUNCH that subsidy on the PMS was becoming unbearable for the oil firm, amid product diversion.

As concerns around fuel price and supply heightened, the government declared that it had no plan to increase the price of petrol, describing comments on PMS price and its availability as speculations.

However, the government, through its Nigerian Midstream and Downstream Regulatory Authority, did not state any approved pump price for petrol, neither did it condemn the hike in PMS price by marketers nationwide.

The PUNCH had exclusively reported on Wednesday that the pump price of petrol could hit N400/litre at most filling stations before the end of this year, going by the continued scarcity of the product, according to oil marketers.

This will represent over 100 per cent increase in the pump price over the period.

The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, had told our correspondent that most IPMAN members, who owned bulk of the filling stations across the country, were now subjected to purchasing PMS at about N220/litre, which was why many outlets currently dispensed at about N250/litre and above.

He said the cost of the commodity had been rising due its unavailability and other concerns in the sector, stressing that consumers should be ready to pay between N350/litre to N400/litre before the end of this year.

Reacting to the concerns around PMS price and its availability, in an advisory issued in Abuja on Wednesday, the NMDPRA said, “This advisory addresses speculations on the price and availability of Premium Motor Spirit.

“The authority wishes to inform the general public that the Federal Government has no intention of increasing the price of PMS during this period. The Nigerian National Petroleum Corporation Limited has imported PMS with current stock levels sufficient for 34 days.

“Consequently, marketers and the general public are advised to avoid panic buying, diversion of products, and hoarding. In keeping with the authority’s responsibilities as outlined in the Petroleum Industry Act, the authority assures the public that it would continue to monitor the supply and distribution of all petroleum products nationwide especially during this holiday season.”

Meanwhile, some senior officials at the NNPC had earlier confirmed to our correspondent that subsidy was becoming too burdensome on the national oil company, as this was another reason for the scarcity of PMS.

NNPC is the sole importer of petrol into Nigeria. It has been shouldering this task for several years now, after other marketers of the commodity stopped importing the product due to their inability to access foreign exchange as required.

“Your report on Monday fully captured what is happening in the downstream oil sector, with respect to the supply and availability of PMS,” a senior official at the company, who pleaded not to be named due to lack of authorisation, stated.

The source added, “How can we continue to import 60 million litres of petrol daily and keep subsidising it, while millions of litres are either diverted or cannot be accounted for? The burden is too much, as you rightly captured in that story.”

On Monday, The PUNCH exclusively reported that the lowest price the Nigerian National Petroleum Company Limited could sell petrol to marketers, assuming there was no subsidy, was N400/litre.

Oil marketers, who made the disclosure, also gave other reasons for the continued scarcity of petrol, which had led to the lingering queues at filling stations nationwide.

They said PMS imports charges were becoming unbearable for the sole importer of the commodity – NNPC, disclosing that the oil firm had been subtly pushing these charges to depot owners.

It was learnt that depot owners, on their part, were also passing the charges to filling stations, which in turn push it to final consumers of the product, a development that has led to the increase in the pump price of the commodity.

It was also gathered that the Federal Government had quietly allowed depot owners to raise the ex-depot price of petrol to about N185/litre, whereas the approved rate used to be N147/litre.

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NNPC PETROL PRICE WITHOUT SUBSIDY IS N400/LITRE – MARKETERS

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The lowest price the Nigerian National Petroleum Company Limited can sell Premium Motor Spirit, popularly called petrol, to marketers, assuming there is no subsidy, is N400/litre, it has been learnt.

Oil marketers, who made the disclosure on Sunday, also gave other reasons for the continued scarcity of petrol, which had led to the lingering queues at filling stations nationwide.

They said PMS imports charges were becoming unbearable for the sole importer of the commodity – the Nigerian National Petroleum Company Limited, disclosing that the NNPC had been subtly pushing these charges to depot owners.

It was learnt that depot owners, on their part, were also passing the charges to filling stations, which in turn push it to final consumers of the product, a development that has led to the increase in the pump price of the commodity.

It was also gathered that the Federal Government had quietly allowed depot owners to raise the ex-depot price of petrol to about N185/litre, whereas the approved rate used to be N147/litre.

This came as the scarcity for petrol continued on Sunday. Many retail stations in Abuja were shut due to lack of products to sell. Residents had to resort to black marketers, who sold their products in jerry-cans.

The same scenario played out in parts of Nasarawa and Niger states, as oil marketers explained that the rise in the dollar was also contributory to the PMS scarcity witnessed in Nigeria.

“The dollar is affecting PMS purchase, something you were buying for about $15/tonne when the dollar was about N440 to N450, but currently the dollar is about N750 to N800. Definitely the price of the product will increase,” a major marketer, who pleaded not to be named due to lack of authorisation, stated.

The official added, “You can buy a product, say $10/tonne from maybe Russia, it will get to Nigerian waters at that rate, but most of those mother vessels, as soon as they discharge into your own vessel, whatever rate you now pay will be international rates in dollar.

“The mother vessel has its limit, it has to be stationed at Atlas Cove. But the daughter vessel you are going to charge, which brings in the product, will be charged in dollars. They don’t take naira. So all these charges come in dollars.”

The source stated that these charges were currently hitting hard on the NNPC, as the oil company was finding it tough to bear the increased fuel imports’ rates.

“All vessels operate on international rates and it must be in forex. So as it is now, the rates are getting so high for NNPC to bear alone. Some of these charges have to be pushed to depots that are taking the products and they have to pass it on to consumers,” the oil marketer stated.

The source added, “The subsidised ex-depot rate for petrol from NNPC is about N147/litre, but tell me, which depot is selling at that rate today? I know somebody who said he bought from a depot at N182/litre. And he got it at this rate because he did bulk purchase, he bought about 20 trucks.

“And he bought it from one of the major marketing companies. So when you make a bulk purchase at N182/litre, then you can imagine what those who are buying one or two trucks will have to pay for the product.

“This means that there is hardly any depot you can go to now that you can get products for less than N185/litre. And by the time you buy at N185/litre at the depots, why won’t they sell at N200/litre and above?”

This development was confirmed by the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, who stated that NNPC was currently finding it tough to continue subsidising PMS.

“The least that NNPC can sell petrol is over N400/litre to depots and not at N145/litre, but because of subsidy, which is becoming over-bearing on them, the oil firm has been struggling to subsidise,” he stated.

He added, “That is why you see the lapses. The government is looking for dollars to import this product and pay the contractors importing for NNPC, and it is also trying to subsidise PMS.”

Ukadike explained that the landing cost of PMS in Nigeria was about N450/litre, as he noted that subsidy on PMS was no longer sustainable.

“The government will not continue to be Father Christmas and cripple the economy. Subsidy must stop!” he stated.

Agencies keep mum

The Group General Manager, Group Public Affairs Division, NNPC, Garba-Deen Mohammad, did not respond to enquiries when contacted. In fact, the NNPC has remained mute on issues around fuel scarcity.

Similarly, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the regulator of the downstream oil sector, stayed mute when contacted.

 The NMDPRA, just like NNPC, has also remained mute on this matter since last week. The agencies of the Federal Government have decided not to speak on the cost of PMS, amidst the scarcity of the product and attendant queues.

The President, Petroleum Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, told our correspondent that the crisis in the downstream oil sector would continue until the industry was deregulated.

“We have said it times without number that this issue will continue to drag as long as there is subsidy on petrol, which from all indications is no more sustainable. So the best thing is to stop it,” he stated.

Meanwhile, Ukadike also stressed that the continued payment of subsidy on petrol was taking a toll on not just the resources of NNPC but also on the Federal Government.

He said, “It is becoming increasingly difficult for them (NNPC). In fact, it is taking a toll on the economy generally. And even the Federal Government cannot contain it.

“So the best way out is just to allow people to be able to adapt to the non-subsidy regime in order to relax the pressure on the dollar and the government can then invest in other sectors.

“All these issues, including the subsidy regime, contribute to the scarcity we see across the country. The naira is crashing against the dollar, there is less supply of products, NNPC and the government are battling to subsidise petrol, why won’t there be scarcity?”

Subsidy gulps N6.88tn

Last month, The PUNCH exclusively reported that the administration of Nigeria’s President, Major General Muhammadu Buhari (retd.), could spend not less than N10.976tn as subsidy petrol from when it came to power in 2015 till May 2023.

The report showed that already, the government had spent about N6.88tn in subsidising the commodity, according to data obtained from NNPC and the Nigeria Extractive Industries Transparency Initiative.

The President and his party, the All Progressives Congress had, however, kicked against the fuel subsidy scheme that was implemented by the previous administration of the Peoples Democratic Party, while campaigning in 2015.

NEITI had stated in a report submitted in September to the House of Representatives ad-hoc committee investigating the fuel subsidy regime from 2013 to 2022, that petrol was subsidised all through these years.

In October, the Minister of Finance, Budget and National Planning, Zainab Ahmed, told members of the House of Representatives that the Federal Government’s projection was to spend N6.72tn on subsidy in 2023.

She, however, said the second option of the government was to keep fuel subsidy till June 2023 and that in this option, fuel subsidy was projected to gulp N3.3tn.

A combination of all the above figures indicated that the Buhari regime could spend nothing less than N10.976tn on petrol subsidy from 2015 and June 2023.

IPMAN laments scarcity

Meanwhile, the National Controller, Operations, IPMAN, Mike Osatuyi, told The PUNCH on Sunday that its members still lacked the product, adding that few filling stations which had PMS were selling between N230 and N240 per litre.

“We don’t have products because we could not get to buy. There are currently no products at depots”, he said.

According to him, IPMAN currently has over 30, 000 members nationwide, and accounts for 70 per cent ownership of retail outlets in Nigeria.

“Our members are in the villages and outskirts. Go everywhere, you will see our stations”, Osatuyi added.

A Depots Association of Petroleum Products Marketers Association of Nigeria source who pleaded anonymity said its members had paid for products but were not getting any from NNPCL.

“We have people who have paid but were not given. But the NNPC would say it has stock. Where is the stock and why don’t we have products in our tanks?”

The Chairman, IPMAN, Lagos Satellite Depot, Ejigbo, Akin Akinrinade, had said members of the association ought to be getting supply from the Pipelines and Product Marketing Company.

He said members had made payments in excess of N1bn since October 2021.

He however said the products were yet to be delivered, forcing members to patronise private depots for products while at the same time, servicing loans borrowed from banks for their money with PPMC.

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