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Federal government says the price of petrol will not reduce significantly even when Dangote refinery takes off

Ministers make it clear that the price of petrol will not drop significantly even when the product is refined at home.

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The price of Premium Motor Spirit (PMS) or petrol will not drop significantly even when Nigeria begins to refine most of the crude oil it consumes, according to Minister of Finance, Budget and National Planning, Zainab Ahmed and Minister of State for Petroleum Resources Timipre Sylva.

Nigeria’s refineries have been moribund for years, meaning that Africa’s number one oil producer has to export crude oil for processing and import the finished products.

The 650,000-barrels-per-day Aliko Dangoterefinery in the Lekki area of Lagos is set to commence operations next year, with Nigerians hoping that this would drive down the pump price of petrol in a recently deregulated market.

Not so fast, says Ahmed.

“The Dangote refinery is sitting within an Export Processing Zone so they are insulated from that.

“When we buy fuel from Dangote, we will be buying fuel at the international market price. The only savings that we will be making is the savings of freight which is shipping,” Ahmed said on an NTA breakfast programme, according to a report by Punch.

Ahmed said deregulation will however open up the petroleum sector for more private players, a development she says will benefit Nigeria in the long run.

“What we are doing is enabling the petroleum sector to actually grow. There have been a number of refineries that have been licensed for several years. None of them was willing to start refining under the regime that we had where fuel was controlled.

“But we will still have landing cost; labour cost and the marketers will still have to put a margin.

“These refineries being those that are supposed to have come to operate can now come in because they are assured that when they produce, they can sell at market rate and recover their investments and make some reasonable profits,” she said.

She added that, “it will mean more refineries will open, they will employ people and fuel will be available in different parts of the country and not just relying on the government refineries.

“Those refineries are old and even if we turn them around, we will not be able to operate them at optimal capacity, so while the NNPC is trying to rehabilitate them, we also need to encourage the private sector refineries to come on stream and even state governments that have the capacity.”

Petroleum Resources Minister Sylva said the pump price of petrol will not drop significantly even if Nigeria is refining crude oil locally.

He said the major determinant of the cost of petrol is crude oil and as long as it remains high in the international market, the cost of petrol at the local gas station will not drop.

“For now, our supply is coming mostly from imports as we all know. And that doesn’t really have an impact on the price as people would think,” Sylva said.

“The only difference that would happen if our supply was coming from in-country would have been the freight price.

“But whether it is coming from outside or coming from within, it will be about the same cost because when you import, the only difference is that you will have to pay the freight.

“But it is the same cost of crude and whether you are refining or not, you will have to pay the market price for the crude.”

The pump price of petrol in Nigeria went from N145/liter to N162/liter on September 1, with President Muhammadu Buhari clearly stating afterwards that his administration can no longer afford to subsidise the product.

A cross section of Nigerians have kicked against the new price regime and there have been a handful of street protests to boot.

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Lagos to totally close Third Mainland Bridge again ahead of full reopening

Lagos State Government has announced a 24hour closure of the Third Mainland Bridge from midnight Friday, February 26.

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The Lagos State Government has announced that it will shut down the Third Mainland Bridge for 24 hours from midnight Friday, February 26 to midnight Saturday, February 27.

The expected total closure of the bridge is to enable the contractors to move the equipment used for its rehabilitation and maintenance ahead of the full reopening of both the Oworonshoki and Adeniji bound lanes open to traffic.

The disclosure is contained in a statement issued by the Lagos State Commissioner for Transportation on Wednesday, February 24, 2021.

Oladeinde, therefore, advised motorists approaching the Third Mainland bridge from Ogudu, Alapere and Gbagada to use Ikorodu Road, Jibowu and Yaba, as alternative routes, while Iyana Oworoshoki-bound traffic from Lagos-Island, Iddo, Oyingbo, Adekunle and Yaba are to use Herbert Macaulay Way, Jibowu and Ikorodu Road as alternative routes.

The Commissioner assured that traffic management personnel would be deployed along the affected routes to minimize the impact of the shutdown and address any traffic impediments during the closure.

He was also full of commendation for Lagosians for their cooperation during the prolonged repair works of the bridge and assured that the bridge is now safe for use by everybody.

What you should know

  • The Federal Government had on July 24, 2020, announced the partial shutdown of the Third Mainland Bridge for a period of 6 months for another round of rehabilitation works.
  • This was extended by an extra one month due to disruption caused by the #EndSARS protests last year, when the re-opening date moved to February 15, 2021.
  • The Federal Government later announced that the bridge, which was to reopen on February 15 will no longer be opened as work was expected to commence on the casting of the last expansion joint on the bridge before it will be finally reopened.
  • The 11.8km bridge, which was commissioned in 1990 by the then Military President, Ibrahim Babangida, is the longest of the 3 bridges connecting Lagos Island to the Mainland.
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FG urged to sell-off “unproductive” Ajaokuta Steel Plant

The FG has been urged to sell the moribund Ajaokuta steel plant located in Kogi State.

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The Federal Government has been urged to sell the moribund Ajaokuta steel plant located in Ajaokuta, Kogi State. The FG was advised to sell the defunct facility to the private sector, which would be more capable to turn the massive structural investment into a profitable venture.

The call was made by the Chairman and Managing Director of Energy Services Limited, Chief Sunny Onuesoke who spoke to newsmen in Warri after visiting the plant last week.

He lamented that no Nigerian would feel good about the country after visiting the $8bn structural investment which has never“produced a single bar of steel since reaching 98% completion as far back as 1994.”

On his visit to the plant, he reported that it was a very emotional experience for him.

“I went there, I cried and asked what exactly is the problem?” he said.

He reflected on the numbers associated with the moribund Ajaokuta steel Plant from its flag off in 1979 to date.

  • 3.9bn was budgeted for the resuscitation of the facility in 2016
  • 4.27bn was budgeted for the same purpose in 2017

Onuesoke said that successive governments have plunged about $8bn into the complex since 1979. He lamented that the FG has been wasting the huge sum of N2 billion for payment of staff salaries every year for doing nothing.

“Why would anyone continue to pump money into an unproductive enterprise? Why do government keep promoting, paying staff salaries, pensioning, and retiring them?

“Why does government spend an appropriation budget on the maintenance of a plant that is not working? How do you maintain a non-commission plant?” Onuesoke queried.

The Ajaokuta steel plant has been in a moribund state for four decades with no concrete plans on the ground for its full resuscitation.

What you should know 

  • It was earlier reported on the 3 key reasons why the Ajaokuta Steel Plant has remained moribund for more than 4 decades. You can find them here
  • The Ajaokuta steel company was constructed by the Soviet Union in 1979 under a cooperation agreement with Nigeria, the complex reached 98% completion by 1994.
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SEC denies knowledge of Oando shareholder’s court case

SEC has denied ever being served with court processes with respect to the purported matter at the FCT High court.

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The Securities and Exchange Commission (SEC) has denied the claim by one of Oando Plc’s shareholders, Engr Patrick Ajudua, that he won a court case against the capital market apex regulator.

SEC disclosed in a statement it issued and seen by Themoneymetrics on Wednesday that there was never a time it was served with court processes with respect to the purported matter at the FCT High court.

It stated, “The attention of the Securities and Exchange Commission (the Commission) has been drawn to several publications in the media, where it is reported that a shareholder of OandoPlc, purportedly obtained a judgment from the Federal Capital Territory High Court against the Commission.

“The Commission wishes to inform the general public that it was never at any time served with court processes with respect to the purported matter at the FCT High court. The Commission will consequently take all necessary steps to verify and set aside the purported decision of the said Court.”

What you should know

  • On Tuesday, Ajudua, reportedly won a legal suit, which was filed at the High Court of the FCT against SEC, according to Our source.
  • He filed that the directive of the SEC suspending Oando’s Annual General Meeting is in breach of his right to freedom of association as guaranteed under Section 40 of the Nigerian Constitution and Articles 9, 10 & 11 of the African Charter on Human and Peoples Rights.
  • In the said hearing presided over by Honorable Justice O. A Musa, all cases filed were granted in his favor.
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