By Adedapo Adesanya
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has accused the federal government of engaging in monopolistic deregulation of the downstream sector.
The National Operations Controller of the association, Mr Mike Osatuyi, made the disclosure against the backdrop of government inability to allow market forces to determine the petroleum pump price in the country.
He stressed the need for the government to enforce total deregulation of the petroleum downstream sector, something the body claims has been reserved for only one or a few selected players.
Explaining the reason behind the accusation, he said that government through the Nigerian National Petroleum Corporation (NNPC) has been the sole importers of petrol and few markets operating crude for the refined white product under the name Direct Supply Direct Purchase (DSDP) which negates the principle of market deregulation of the sector.
According to him, government monopolising importation of petrol goes against the principle of equal participation and the creation of a level playing field in the business.
“There is need for government to allow other players into the market to import petrol by making forex available at CBN official rate as promised severally by the Honourable Minister of State for Petroleum, Mr Timipre Sylva.
“The federal government should make forex available to oil marketers for import so as to drive down petrol price now that crude price is at $52 for Brent and $49.5 for WTI per barrel,” he said.
“Although the federal government has announced plans to make foreign exchange available to petroleum product marketers but we are waiting to be called upon to deliberate on the modalities involved.
“Government should make foreign exchange available to petroleum product marketers, like IPMAN, MOMAN and DAPPMAN, in order to make the importation of petrol into the country competitive, reduce the rising cost of the product and stop the overdependence on the NNPC for its importation and pricing,” he said.
Mr Osatuyi, who also doubles as the National Deputy President, (South) Indigenous Gas Traders Association of Nigeria (INGASAN) said availability of forex to oil marketers would stop the current monopoly in the importation of petrol by NNPC who has been the major importer of petrol over the years with other players in the downstream oil business buying the product from them.
The controller explained that this had not been the case since the government announced full deregulation of PMS (petrol) in march 2020, adding that there are still cases of price band control up to August 2020.
“From September, the price band control was withdrawn with the hope that full deregulation will surface but what we have been experiencing now is monopolistic deregulation.
“NNPC is the only player allowed to access forex for importation of petrol in addition to the crude for petrol handed down to few players in the industry.
“Government and NNPC are the only parties that can explain the type of deregulation we are practising in Nigeria.
“Government should allow all players to participate in the deregulation processes so that we can bring private-sector efficiency to the system which will bring down the price,” Mr Osatuyi added.
Further, Mr Osatuyi commended the President Buhari administration on the gas policy launched in January 2020 and particularly the launching of autogas programme for the country.
“Apart from reducing or total stoppage of gas importation into the country, the seriousness of the Federal Government on gas expansion programme will create jobs through the production and supply chain mechanism.
“Gas will be cheaper for Nigerians. It will serve as alternative means of powering of our vehicles through the usage of compressed natural gas (CNG).
“Liquefied Petrol Gas (LPG) will also serve as power for our generator which will make power cost be cheaper if crude oil goes up to $80 per barrel,” he added.
Nigeria’s Pension Funds Reach N14.27bn as Contributors Near 10 million
By Adedapo Adesanya
The National Pension Commission (PenCom) says the total number of registered contributors and the value of pension fund assets stand at 9,795,957 million and N14.27 trillion respectively, as at June 2022.
The Director-General of PenCom, Mrs Aisha Dahir-Umar, gave the figures at a recent workshop themed Increasing Informal Sector Participation In The Contributory Pension Scheme (CPS): The Case for Micro Pension Plan (MPP).
Mrs Dahir-Umar, represented by the Head, Corporate Communications, Mr Abdulqadir Dahiru, said the increasing number of pension funds and contributors was responsible for the recapitalisation of the Pension Fund Administrators (PFA’s) by PenCom.
“The reason for the recapitalisation exercise was to ramp up the capacity of the PFA’s to manage the increasing number of registered contributors and the value of pension fund assets which stood at 9,795,957 million and N14.27 trillion respectively, as at June 30, 2022.
“PenCom increased the Minimum Regulatory Capital (Shareholders’ Fund) requirements of PFAs from N1 billion to N5 billion in 2021.
“All PFAs have complied with the commission’s directive to increase their minimum capital during the exercise which had a 12-month transition between April 27, 2021, and April 27, 2022,” she said.
According to her, the theme of the workshop aligned with the commission’s objective of expanding coverage of the CPS as it relates to the micro pension plan.
The director-general explained that the objective was to bring into the CPS, Nigerians working in the informal sector and those who were self-employed through the MPP.
Mrs Dahir-Umar noted that strategic efforts to drive the MPP remained one of the significant areas of focus of the commission.
She said the MPP was conceptualised to expand pension coverage to the informal sector, including small-scale businesses, entertainers, professionals, petty traders, artisans and entrepreneurs.
“The MPP was implemented to curb old-age poverty by assisting the workers, as mentioned above, to contribute while working and build long-term savings to fall back on when they become old, ” Mrs Dahir-Umar said.
The director-general stated that to create awareness of the MPP, the commission, in collaboration with the Pension Fund Operators Association of Nigeria, was currently championing an industry media campaign in major cities in the country’s six geopolitical zones.
She said it was expected that the exercise would bring about increased effectiveness and efficiency as well as improved service delivery in the industry.
“Let me re-affirm the commission’s commitment to creating awareness and holding social dialogue on the workings of the CPS with relevant stakeholders towards the smooth implementation of the scheme in Nigeria,” she said.
Outrage Over Payment of N18.39bn Daily for Fuel Subsidy
By Adedapo Adesanya
Some Nigerians have started to express anger over the disclosure by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, that the sum of N18.39 billion is used by the federal government daily to pay for fuel subsidy.
Speaking during an investigative hearing of the House of Representatives ad hoc committee looking into the petroleum subsidy regime between 2017 and 2021, the Minister revealed that, “The total amount of subsidy per day is N18.397 billion per day.”
“So, if you are projecting for the full year, it would be N6.715 trillion. If you are projecting for half year, it would be 50 per cent of that,” she informed the lawmakers.
According to the Finance Minister, this was calculated using the information provided by the Nigerian National Petroleum Company (NNPC) Limited and the regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
She said the information showed that 64.96 million litres of fuel are the projected average daily truck out, adding that N1.774 trillion was paid to independent oil marketers as subsidy in four years.
Aside from the increasing cost of petrol importation, economic and energy experts have continued to decry the rising cost of fuel subsidy by the federal government.
In January, the federal government said it will retain fuel subsidy indefinitely and amended the 2022 budget to provide funds for that purpose, a move that saw the provision jump over 800 per cent to N4 trillion.
Mrs Ahmed, at that time, said the government realised that the timing of the planned removal of the petrol subsidy was problematic and would worsen the suffering of Nigerians.
According to her, all payments on fuel subsidies were supposed to cease from July 2022 but, “subsequent to the passage of the [Finance] Act, we went back to amend the Fiscal Framework that was submitted to the National Assembly to incorporate this demand, but after the budget was passed we have had consultations with a number of stakeholders.
“It became clear that the timing is problematic, that practically there is still heightened inflation, and also removal of subsidy will further worsen the situation, thereby, imposing more difficulties on the citizens, and Mr President clearly does not want to do that.”
Naira Exchanges at N694/$1 in Peer-to-Peer FX Segment
By Adedapo Adesanya
The Naira depreciated against the United States Dollar at the Peer-to-Peer (P2P) window of the foreign exchange market on Thursday by 0.32 per cent or N2 to sell for N694/$1 in contrast to the preceding day’s rate of N692/$1.
However, it closed flat against the greenback in the Investors and Exporters (I&E) segment of the FX market at N429.38/$1 amid a slump in the value of transactions at the ecosystem.
According to data from the FMDQ Securities Exchange, forex transactions worth $63.30 million were carried out during the session compared with the $120.46 million reported a day earlier, indicating a decline by $57.16 million or 47.5 per cent.
But at the interbank segment, the local currency moved in the same direction on Thursday, appreciating against the British Pound Sterling and against the Euro.
It was observed that the domestic currency appreciated against the Pound Sterling by N1.72 to trade at N508.24/£1 compared to the previously traded rate of N509.96/£1 and against the Euro, the Naira gained N11.06 to settle at N420.83/€1 compared with the previous day’s N431.89/€1.
Also, in the black market, the domestic currency improved its value by N2 to trade at N678/$1 in contrast to the N680/$1 it was sold on Wednesday.
Meanwhile, in the cryptocurrency market, investors counted more losses as the appetite for the digital coins waned, with Shiba Inu (SHIB) dropping 9.9 per cent to sell for $0.00001343 and Dogecoin (DOGE) losing 8.4 per cent to close at $0.07429.
Cardano (ADA) depreciated by 8.1 per cent to settle at $0.4951, Solana (SOL) slumped by 6.2 per cent to sell at $38.30, Binance Coin (BNB) slid by 5.0 per cent to close at $291.64, Ripple (XRP) depreciated by 3.7 per cent to finish at $0.3616, Litecoin (LTC) went down by 3.0 per cent to quote at $58.99, Bitcoin (BTC) recorded a 2.5 per cent drop to end at $22,818.66, while Ethereum (ETH) retreated by 1.5 per cent to trade at $1,817.11, with the US Dollar Tether (USDT) retaining its previous day’s value of $1.00 due to the strong performance of the US Dollar against other currencies.
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