Petrol marketers have called for urgent intervention by the federal government to arrest the fast increase in the pump price of diesel to prevent imminent distribution crisis.
The marketers said petrol scarcity is imminent in the country as they can no longer sustain the distribution of petrol and other products nationwide with the price of diesel used to power their trucks now selling for N1,100/litre in many locations.
This is as the Nigerian National Petroleum Company Limited (NNPC), in a sweeping reorganisation exercise, compulsorily retired all its management staff with less than 15 months to statutory retirement with immediate effect.
Also, President Bola Ahmed Tinubu has declared that Nigeria would no longer welcome investment crumbs from multinational energy firms.
The marketers, under the aegis of Natural Oil and Gas Suppliers’ Association of Nigeria (NOGASA), raised the alarm yesterday.
The association’s president, Mr Benneth Korie, said that diesel had witnessed incessant hikes in prices in recent months, a development worsened by marketers’ inability to secure cheap bank loans that will enable them restock and sell petrol at the current petrol price of N617/litre.
Korie lamented that the rapidly-rising diesel price was evidently causing hardships in haulage transportation and commuting alike.
He, therefore, called on the government to intervene before the sector gets grounded and derails the anticipated growth.
The NOGASA president assured that finding lasting solutions to the incessant hikes in diesel price is a major issue that will be addressed by the union at its annual general meeting coming up in October.
“NOGASA is worried about the ugly development and is trying to understand why prices of diesel are going as high as N950 to N1,100 per litre in the market with a view to moderating the prices and shocks in the economy,” he said.
Experts, however, say the hike in diesel price may stem from the rise in crude oil price, which currently stands at $95 per barrel. Another factor is the naira slump, which is inching towards N1,000/$1 in the parallel exchange rate market.
Korie advised that Nigeria refineries should be given emergency attention by the government to ensure rising energy cost does not derail the economy.
“We will continue to deliver on our mandate as we make progress in the oil and gas Industry.
“We advise that suppliers should go about their respective businesses until proper resolution will be taken at the NEC meeting”, Korie stated.
LEADERSHIP checks showed that diesel sold as high as N1,080 per litre in different parts of Lagos yesterday.
A visit to filling stations around Ojota, Ikorodu axis revealed that there was an increase in the price of diesel.
Total filling station at Ikorodu road also increased its price from N980 to N1,014 per litre of diesel, yesterday.
Along Lagos-Ibadan Expressway, the prices vary as most of the filling stations visited have the stock presently. Only one filling station sold diesel in Magboro area of Lagos, and it sold at N1,000 per litre.
NNPCL retires management staff
Meanwhile, the NNPCL has sent all management staff with less than 15 months to statutory retirement on compulsory early retirement.
A statement signed by management yesterday and posted on the company’s X (formerly Twitter) handle early yesterday said the action takes immediate effect from today.
The notice said: “In our bid to pursue effective organisational renewal to support the delivery of our strategic business objectives, it has become imperative to rejuvenate our workforce.
“Consequently, in addition to the recent exit of three executive vice presidents, other management staff with less than 15 months to statutory retirement will be exiting the company effective 19th September 2023.
“This is in line with our commitment to scale up NNPC Ltd.’s capabilities through targeted talent management and equal opportunity for all Nigerians.”
LEADERSHIP recalls that on September 17, 2023, NNPCL announced the appointment of new executive vice presidents to spearhead critical sectors. Oritsemeyiwa A. Eyesan was appointed as the executive vice president for the upstream sector; Olalekan Ogunleye for gas, power, and new energy, and Adedapo A. Segun for the downstream sector.
It said their appointments were in line with NNPC Ltd.’s commitment and drive for organisational renewal, anchored on its business imperatives, standards of excellence, people development, and strengthening of its competencies and capabilities through broad-based leadership exposure.
This strategic restructuring is a result of pivotal recommendations put forth by the Energy and Natural Resources sub-committee of the Bola Ahmed Tinubu Advisory Council back in June 2023.
The sub-committee, committed to instigating vital reforms in the energy sector, set a stringent timeline of 0 to 100 days for the new administration to meticulously head-hunt competent, seasoned, and reform-driven leaders within the NNPC.
The primary aim is to ensure that the company functions as a commercial entity in strict accordance with the provisions of the Petroleum Industry Act (PIA), effectively contributing taxes and profits to the Federation Account.
Beyond executive appointments, the sub-committee underscored the urgency to realign NNPCL by divesting it of policymaking roles and advocating for the strategic sale of certain assets.
These comprehensive recommendations reflect a resolute effort to fortify the NNPC, facilitating its alignment with statutory mandates and transforming it into a more efficient and profit-oriented entity.
Note also that the sub-committee proposed a generation of a substantial $17.4 billion in funds, primarily through well-structured NNPC sell-downs.
The committee’s vision entails strategically selling down interests in joint ventures to a minority position.
This approach is meticulously designed to streamline operations, introducing an operating model that eradicates the traditional cash call system, fostering financial efficiency and sustainability.
Furthermore, the committee advocated for a prudent divestment of interests in refineries while simultaneously advocating for the development of a robust Nigeria Liquefied Natural Gas (NLNG) operating model.
These twin strategies, meticulously planned, are poised to realign NNPCL’s financial structure, injecting agility and a more lucrative trajectory.
The sum of $17.4 billion represents a significant injection of funds that can potentially steer NNPCL towards a more profitable and resilient future.
In July last year, the national oil firm, formerly known as Nigerian National Petroleum Corporation, transited fully into a commercial entity, becoming the Nigerian National Petroleum Company Limited.
The official transitioning into a private entity means that the oil company is now being regulated in line with the provisions of the Companies and Allied Matters Act.
The group chief finance officer of the firm is therefore expected to bear additional tasks of ensuring the liquidity of the group as well as the efficient allocation of capital to its businesses based on returns and business relations.
Also, the federal government is to halt all forms of funding for projects and sundry purposes of the firm, compared to what was obtainable in 45 years of the NNPC before it transitioned to a limited liability company.
The oil company has since been operating as a limited company, run by a chief executive officer and executive vice presidents.
Nigeria No Longer Settling For Crumbs – Tinubu
Meanwhile, President Bola Tinubu has stressed that Nigeria is no longer settling for crumbs and leftovers on the investment agenda of the world’s biggest energy conglomerates.
Tinubu who played host to a delegation consisting of the global leadership of an oil & gas transnational giant, ExxonMobil, on Monday in New York, said Nigeria has never been more ready for business than it is now.
In a statement by presidential spokesman, Ajuri Ngelale, Tinubu noted that following an illustrious private sector career as a professional accountant in the oil & gas industry, he had proven his capacity to take difficult decisions as president and is best prepared to solve problems and crush all bottlenecks standing in the way of new and large-scale capital flowing into Nigeria’s oil and gas industry.
“The knotty issues require direct supervision on my part. Despite many contending obligations, I will sit down and oversee the process of removing these encumbrances to job and wealth creation for the Nigerian people. We know the industry. We grew up in it. We are positioned to solve the problems, and we are pragmatic, and we will solve the problem,” the president said.
ExxonMobil’s President of Global Upstream Operations, Liam Mallon, assured President Tinubu that he is aware of the new and personal commitment that the president is bringing to bear on behalf of Nigeria and is well placed to reciprocate the president’s efforts with new investment as he pledged new production of nearly 40,000bpd in its Nigerian operations in phase one of a new investment push in Nigeria.
“What you told us was that your team would collaborate with us, and that has proven true. We have made significant progress since we last met. We are growing our production, and we are working hard on expanding in deep-water production. We appreciate your efforts, and we will respond in kind. The time is right. Thank you for your leadership,” the ExxonMobil President stated.