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Wednesday 29 May 2019
BUSINESS DAY
news Senate approves N69bn subsidy payment to 20 oil marketers OWEDE AGBAJILEKE, Abuja
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he Senate on Tuesday approved the payment of N68.9 billion as outstandingsubsidyclaims to 20 petroleum marketers. A breakdown of the amount shows that while the Senate approved the payment of N10.8 billion as subsidy claim to Tanzila Petroleum Company, it okayed another N58.1 billion for 19 oil marketing companies. Someoftheoilmarketersare Conoil,Oando,A&EPetroleum, MatrixEnergy,OntarioOil&Gas Limited, Swift Oil Limited and Honeywell (HOGL). Others are Blacklight, Fatgbems Petroleum, Forte Oil, Frado International, Tempogate Oil, Linc Nigeria Limited, IPMAN Investment, Hudson Petroleum, among others. The approval followed the adoption of the report of its Committee on Petroleum Downstream on the Promissory Note Programme and a Bond Issuance to Settle Inherited Local Debts and Contractual Obligations to Petroleum Marketers. Presenting the report, Chairman of the Senate Committee Petroleum Down-
stream, Kabiru Marafa, observed that there were differences in submissions made by the Federal Ministry of Finance, Petroleum Products Pricing Regulatory Agency (PPPRA) and oil marketers. He attributed the discrepancies to the use of different input parametersforthecalculationof the subsidy payable value. “The differing calculation processeswhichcouldn’tdefine thestepusedtoarriveatthetotal subsidy due value (e.g. it could not be determined if simple or compoundinterestmethodwas adopted in the computation or the interest was computed on the forex differential element amongst others).The internal inconsistencies which do not followthesetprocessingparameters by the government agencies,”thereportofthepanelread. Some of the oil marketers and the amount approved for them include: Ontario Oil & Gas Limited N9.8 billion, Conoil N8.3billion,OandoN4.9billion, Matrix N4.6 billion, Honeywell (HOGL) N4.3 billion and Swift Oil Limited N4 billion. OthersareForteOilPLCN3.8 billion, Blacklight N3.7 billion, Stallionaire N3 billion, Tempogate Oil N2.3 billion, among others.
L-R: Jacob Olufemi Williams, managing director, Willao Nigeria Limited; Abiodun Amokomowo, managing director, Ibile Holdings Limited, and Olayinka Oladunjoye; commissioner for commerce, industry and cooperatives (representative of Lagos State governor), at the commissioning of The Campbell Centre in Lagos, recently.
Sanwo-Olu, Ihedioha, Babagana, 26 others take office as governors today …amid high expectations, slowing economy MICHAEL ANI
F 233 companies scramble for slots as NNPC starts natural gas liquid bids HARRISON EDEH, Abuja
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he Nigerian National Petroleum Corporation (NNPC) has started natural gas liquids bid pre-qualification exercise for 2019-2021 and the corporation is prioritising companies with proven investments in gas utilisation, storage, distribution and marketing infrastructure. Two hundred and thirty-three (233) companies have joined in the bidding process. Maikanti Baru, NNPC group managing director, said at the bid opening on Tuesday in Abuja that the bid is to maximise the value of the natural gas liquid resources for the benefits of Nigerians and other stakeholders. “As a corporation, our current pursuit is to continuously grow our domestic gas supply and utilisation while also maximising value from our utilised knock-off condensates and natural gas liquid resources,” Baru said. “The strategic focus in the coming months is to expand domestic liquefied petroleum gas (LPG) supply from our established local sources while also encouraging investments in storage, marketing and distribution infrastructure,” he said. Represented at the bid opening by Saidu Mohammed, GMD, Gas and Powers, the NNPC boss said the corporation is focused on
engaging qualified companies to off-take natural gas liquids for the domestic and international markets. “The objective is to further ensure the selection of offtakers is aligned with tested transparent and accountable procedures in compliance with the Public Procurement and Nigerian Content Acts,” he said. He noted that selected companies would be encouraged to ensure maximisation of transportation, marketing, and distribution to widen LPG market. The bidding process was conductedwiththefullobservation of Centre for Transparency watch, officials of the Bureau for Public Procurement (BPP) and the Nigerian Extractive Industry Transparency Initiative. In the last three years, Nigeria has been putting in place mechanisms to help the country make the most of its abundant natural gas reserves. In 2016, relying on Nigeria’s petroleum law empowering the minister of petroleum resources to take flared gas and commercialise it, Ibe Kackikwu, minister of state, launched the National Gas Flare Commercialisation Programme to involve thirdparty investors or off-takers. On April 11, Kachikwu said that 226 companies had submitted bids to participate in the commercialisationprogramme.
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ew hours from now, a total of 29 governors-elect will take the oath of office as governors for a fouryear term, having won the March 9, 2019 governorship election in their various states. Those to be sworn in today include seven first-time governors and 22 incumbents who have won a second term. In Lagos, Babajide SanwoOlu of the All Progressives Congress (APC) will succeed the outgoing Governor Akiwunmi Ambode of the same party, while in Imo State, Emeka Ihedioha of the People’s Democratic Party will take over from Rochas Okorocha of the APC. Also to be sworn in are Inuwa Yahaya (Gombe, APC), Darius Ishaku (Taraba, PDP), Abdullahi
Sule (Nasarawa, APC), MaiMala Buni (Yobe, APC), Seyi Makinde (Oyo,PDP),DapoAbiodun(Ogun, APC), Abdulrahman Abdulrazaq (Kwara, APC), Babagana Zulum (Borno,APC),AhmedUmarFintiri (Adamawa, PDP), and Mohammed Mattawale (Zamfara, PDP), whowasrecentlydeclaredwinner bytheSupremeCourt. Others include Ifeanyi Ugwuanyi (Enugu, PDP), David Umahi(Ebonyi,PDP),Muhammad Badaru (Jigawa, APC), Okezie Ikpeazu (Abia, PDP), Abubakar Bello (Niger, APC), Emmanuel Udom (Akwa Ibom, PDP), Ben Ayade (Cross River, PDP), Ifeanyi Okowa (Delta, PDP), Nasir El-Rufai (Kaduna, APC), Mohammed Badaru (Jigawa, APC), Aminu Masari (Katsina, APC), Atiku Bagudu (Kebbi, APC), Simon Lalong (Plateau, APC), Nyesom Wike (Rivers, PDP), Samuel Ortom
(Benue, PDP), Aminu Tambuwal (Sokoto, PDP), and Abdullahi Ganduje (Kano, APC). The governors will be ushered in with high expectations from the citizenry amid negative economic indices across the country. Many citizens, weighed down by worsening poverty, look up to the incoming governors for salvation. For these governors, this might not be the time to promise so many and achieve so little, but analysts say they should focus on the core areas they can make impact on the common man. Sanwo-Olu, incoming governor of Lagos State, would have to deploy an effective and efficient means that would ease flow on movement for the well over 20 million Nigerians living and doing business in the coastal
state that prides itself as the Centre of Excellence. Incoming governors in the North of the country will be faced with the challenge of improving the safety and security of the populace whom they will pledge today to govern. Many parts of the North have for long been ravaged by the Boko Haram insurgency, while the herdsmen threat has spread far into the North-Central and many parts of the South. Many of the states’ economies are also in a precarious condition. With allocations from the Federation Account ever dwindling,analystshaveemphasised the need for diversification of the economy away from the traditional reliance on monthly allocations from Abuja towards deploying far-reaching economic policies that would drive growth in their respective states.
Electricity regulator rises from slumber, sanctions erring operators ... Abuja pays N300m in fines, PPIP LVI and Cummins Power ordered to pay millions for infractions
ISAAC ANYAOGU
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ummins Power Generation Nigeria Limited (CPGNL) has become the third company ordered to pay millions of naira in fines for infractions against its licence in an indication that the electricity regulator is now awakening to its responsibility of regulating Nigeria’s floundering electricity sector. In an order published May 28, the Nigerian Electricity Regulatory Commission (NERC) ordered Cummins Power Nigeria Ltd to pay as much as N3 million in fines for noncompliance with the Electric Power Sector Reform Act and terms of its off-grid generation licences, as well compensate
Ikeja Electric for lost revenue for encroaching on the DisCo’s distribution network. This month alone, NERC has meted out sanctions on Abuja and PIPP LVI DisCos for different infractions. While Abuja DisCo has been ordered to pay N300 million in fines over cases of electrocution in its franchise areas and to conduct a detailed safety audit of its network to prevent further infractions, PIPP LVI, like Cummins, is on the hook for encroaching on Eko DisCo’s distribution network and tampering with its distribution infrastructure. Cummins applied for an off-grid electricity generation licence in 2016 to supply power to the Nigerian Carton and Packaging Manufacturing
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Company Limited (NICAPACO), lIupeju, Lagos and was granted. But Ikeja Electric filed a petition against the company on August 9, 2018 accusing it of encroaching on its network by supplying customers on Ikeja Electric’s priority feeders without the approval of the Commission. Ikeja Electric further objected Cummins’ application for an off-grid licence on grounds of encroachment into the DisCo’s distribution network and tampering with distribution infrastructure. According to NERC, its investigation panel confirmed that Cummins had constructed distribution infrastructure without the Commission’s approval and ordered the @Businessdayng
company to defend its actions in January this year. In its defence, Cummins said when it filed an application for a licence to supply power to NICAPACO, it did not receive an objection within the specified period and it did not receive any correspondence from NERC that any objections had been received. So it took NERC’s silence as acceptance, in line with the Executive Order 01 issued by the Vice President for the purpose of ease of doing business. Cummins thereafter entered into a supply arrangement with NICAPACO and commenced supply of offgrid electricity.
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