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FUEL SCARCITY: THERE’S CONFUSION IN OIL SECTOR -IPMAN

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The Independent Petroleum Marketers Association of Nigeria has said there is confusion in the oil sector in Nigeria, following the prolonged fuel scarcity that has been hitting hard on the country for months.

The Deputy National President, IPMAN, Zahra Mustapha, said this on Friday while speaking during an interview on Channels TV’s Sunrise Daily.

When asked about what was happening in the industry leading to the prolonged scarcity, Mustapha said the issue is complex, admitting that independent marketers do not also “really understand what is going on.”

He said, “The fact of the matter is that we are in a very complex situation because the burden of subsidy that the government is carrying is no more sustainable and the volume that the NNPC for now, being the sole importer of the petroleum product, PMS, has been hit hard, because of that the supply that we receive as the marketers at the loading point is being reduced by over 50 per cent.

“It doesn’t seem that they (NNPC) are bringing in more, if they are, we will be getting the volume we usually get before. Since July/August last year the volume we receive now is not up to 40 or 50 per cent of what we usually get.

“As at today with what is trending in the private depots, the volume we are getting is not enough. With the look of things in the private depots, I assume it is not enough, because if they have it they won’t hoard it.”

As regards the recent price adjustments, the IPMAN deputy president said the regulatory body would be in the best position to answer the public and give details on why and how the price was adjusted to the new one.

He, however, explained that “the cost of bringing the products to the public is not going to be achievable at the former price. With all sense of justification, I believe the regulatory body agreed to raise it up to the new amount.

“The price was not done to only appease the marketers but to ensure that the supply chain is being sustained, because the marketers are also in business and you can’t lift a product, resell it and you’re not making any returns on it, I don’t think anybody will continue to do that.

“We’re in a very dicey situation. NNPC imports, distributes to private depots and note that we independent marketers don’t have the depots. as I am talking to you today, I brought the product from a depot in Lagos at N247 per litre to be transported down to far North at the cost of N50 to N60 per litre. Not the fancy prices we are seeing.

“Even we ourselves as independent marketers, we don’t understand what is really happening. We have raised our concerns to the regulatory bodies and have told them what we’re experiencing.

“We are supposed to get this product at N148 but we are buying at N22o and it keeps increasing. 240 in Lagos, 235 in Warri, 240 in Port Harcourt, in Calabar it is as high as N250 per litre for marketers, and you buy and transport yourself to where your retail outlet is.

“There are a lot of confusions in the industry, which the government must come in and address these confusions so that the common man can get the product for the approved price. We cannot buy the product between 220 to 240 naira, transport it for about N50, which is already N300, then expect the marketer to sell to the public for N200 or N190. It is not realisable.”

He further advised the government to develop the country’s local refineries, saying that the issue of on and off scarcity will persist until our local refineries are up and running, while also condemning importation of the product by the government.

He said, “The whole concept of importation is not sustainable, we need to look for ways on how best we can produce locally.

“If you look at the population growth of Nigeria and the demand from transportation and petroleum needs, with the rate at which it is growing it is not something you can continue to sustain through importation without developing our own local refining capacity to adequately satisfy our needs as a people. Importation itself determines when and how the supply chain is going to be sustained.

“But if we have it locally with all our refineries working and transporting to the 21 depots across the country, I believe it is going to solve the issue of on and off scarcity in the country. If we are not able to start producing locally through our own refineries, I don’t think the issue can be resolved once and for all. This scarcity will continue until when we are able to develop our own refineries to meet the needs of our people.”

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AS FIRS UNDER NAMI JUMPSTARTS THE ECONOMY

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The Federal Inland Revenue Service as we know it is the federal government agency charged with mobilizing revenues through tax collections across the length and breadth of Nigeria for the development of the country. At a time when the country is witnessing a significant reduction in oil revenues (Nigeria’s major revenue earner) as a result of several factors, such as low levels of oil production, oil theft and the global oil glut, the Buhari administration has had to devise creative ways of generating revenues for the execution of numerous government projects.
With this policy direction and initiative, the Federal Inland Revenue Service took the challenge to bridge the yawning revenue gap. In doing this they expanded the tax net to include several profit-making companies and organisations which had prior to the emergence of the Buhari administration played artful dodgers in tax payments and remittances. Of course the FIRS also introduced other innovative measures which have today raised the tax revenue profile to N10.1trillion in 2022 from a low of N5trillion when he assumed office in 2019.


Suffice it to say that the increase in tax collections has remained stable and consistent since Alhaji Muhammed Nami assumed the leadership of the FIRS as the Executive Chairman. As an expert in tax administration he realized the federal government’s predicament in sourcing for funds that will help rejuvenate an economy buffeted by the vagaries of the sharp drop in global oil prices. Therefore, as the price of oil kept plummeting at the international market, Muhammed Nami along with his management team took the gauntlet by quickly adorning their thinking caps and worked round the clock to help the Buhar administration deliver on its mandate and campaign promises to the Nigerian people.
Since then the FIRS started witnessing a steady increase in tax collections, and the result is that Nigeria was able to survive the shocks associated with the unpredictable oil market. Simply put, the FIRS became the first federal government agency to achieve tangible results in the federal government’s revenue diversification policies.


To put the monumental feat achieved by the FIRS with the realization of N10.1 trillion in tax collection within a period of one year in a proper perspective, it is pertinent to take a cursory look at the following four years figures of tax collection in the country and they clearly show how the Nami-led FIRS has fared under an inclement economic weather.
In 2019, the agency realized N5.32 trillion; in 2020 the agency netted N4.9 trillion, this was the year that the COVID pandemic dealt a hard blow to the global economy; in 2021, the Service collected N6.45trillion, which was as at then the highest ever collected and over 100% of its collection target; while in 2022, it achieved the jaw-breaking highest tax collection ever of N10.1trillion.


Perhaps, one interesting aspect of this report is the increase in non-oil collection achieved by the Service. Non-oil collection stood at N5.96 trillion, while oil collection was N4.09trillion. Before now Nigeria was helplessly dependent on oil revenues, and the reality is that the country was in no advantageous position to control or influence the impact of changes of oil prices on our national economy.


The implication of these increases is that the FIRS has innovatively widened the scope of collectible taxes in Nigeria as well as applied an aggressive tax drive, and the result is that while oil prices were staggering across the globe, and to the detriment of oil-producing countries including Nigeria, the FIRS provided the financial succor that has helped Nigeria’s economy to withstand the debilitating impact and the federal government placed in a position to carry out its mandate of rendering service to the people.


By Chukwudi Enekwechi, JP
Kwechis19@yahoo.com

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NNPC SPENT $10 BILLION ON FUEL SUBSIDY IN 2022

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The Nigerian National Petroleum Corporation (NNPC) spent 4.39 trillion naira ($9.7 billion) on a petrol subsidy in 2022, the latest data from the state-owned corporation showed on Friday.

Data from NNPC showed that it did not make any transfers to federation accounts in 2022, creating a void in public finances when the government was warning that low revenues and high deficits left it unable to stimulate the economy.

The subsidy is a political hotspot in Nigeria, a country of over 200 million people, and numerous governments have tried and failed to eliminate or reduce it.

Due to years of neglect, Nigeria now imports nearly all its refined fuels.

Nigeria is spending more on fuel imports than it makes from crude oil output, even though oil production has started to recover. This is due to crude theft and pipeline destruction.

Minister of Finance Zainab Ahmed has announced that the country will continue its expensive but popular petrol subsidy until mid-2023, allocating 3.36 trillion naira ($7.5 bln) for the programme.

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FIRS BREAKS ITS 2021 RECORD, COLLECTS N10.1 TRILLION IN 2022

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The Federal Inland Revenue Service (FIRS) has announced that it collected over N10 trillion in tax revenue in the year 2022, the highest tax collection ever recorded in its history.

The Service made this known in its “FIRS 2022 Performance Update,” report signed by its Executive Chairman, Mr. Muhammad Nami, and released to the public on Monday, after his briefing with President Muhammadu Buhari.

“The FIRS, in the year 2022 collected a total of N10.1 trillion in both oil (N4.09 trillion) and non-oil (N5.96 trillion) revenues as against a target of N10.44 trillion.

“Companies Income Tax contributed N2.83 trillion; Value Added Tax N2.51 trillion; Electronic Money Transfer Levy N125.67 billion and Earmarked Taxes N353.69 billion.

“Non-oil taxes contributed 59% of the total collection in the year, while oil tax collection stood at 41% of total collection,” the report noted.

It is the first time that the FIRS will cross the 10-trillion Naira mark in tax revenue collection.

The Performance Update Report further clarified that included in the total revenue sum is the sum of N146.27 billion which is the total value of certificates issued by the Service to private investors and NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.

The report also stated that the N10.1 trillion is exclusive of tax waived on account of various tax incentives granted under the respective laws, which amounted to N1,805,040,163,008.

Providing perspective to this unprecedented tax collection, the FIRS noted in the Performance Update that the Muhammad Nami-led management upon assumption of office came up with a four-point focus, namely: administrative and operational restructuring; making the service customer-focused; creating a data-centric institution; and automation of administrative and operational processes.

It further noted that over the period of 2020 to 2022, the management had introduced reforms bordering around these four-point focus which were producing results.

“The reforms introduced at different times from 2020 are gradually yielding fruits. By the close of 2022, the Service had fully restructured the administration of the Service for maximum efficiency and achieved internal cohesion such that all functional units are working in unison towards the achievement of set goals.

“As a result of conducive environment created for staff, officers of the Service are pulling their weight on the global stage with international recognitions and awards;

“The Service had also automated most of the administrative and operational processes. A major leap was the full deployment of the TaxPro Max for end-to-end administration of taxes in June 2021. The module for the automated TCC went live 1st January 2023 while taxpayers had already downloaded over 1,000 TCCs this year without having to visit FIRS office,” the report read.

It also noted that the Service had operationalised its data mining and analysis system thereby allowing for data-backed taxpayer profiling.

Other reforms the Service introduced in this period focused on the detoxification of the tax environment by ridding it of mutual mistrust, negative tax morale, and tax evasion, through effective taxpayer education, open engagement with stakeholders and improved services.

It noted that it is courtesy these reforms, framed around the four-focus points that the Service was able to achieve this collection.

Mr. Muhammad Nami, Executive Chairman of the FIRS, commenting on the N10.1 trillion record tax collection achieved under his leadership stated that this was made possible through “dogged implementation of strategic reforms over the past two years; a renewed commitment by officers of the Service, accompanied with a boosted morale; as well as the innovative deployment of technology for automation of both tax administration and operational processes.

“This collection was possible through collaboration with our stakeholders, from our colleagues at the Executive branch of government, to the members of the judiciary, to our brothers and sisters at the National Assembly, as well as the tax advisory committee, professional bodies, unions, and most crucially our taxpayers.” 



Speaking on the outlook for 2023, Mr. Nami stated that the Service would build on the current reforms, achieve full automation and continue to establish a resilient Service that would continue to provide sustainable tax revenue to fund the government.

“We intend to maintain, and even improve on the momentum in 2023,” he stated.

“We have peaked, but this is not certainly our peak. In fact, my hope is that this would be the least sum the Service would ever collect going forward.

“Our goal is to identify more areas where we can improve on in the delivery and efficiency of our collection; and plug loopholes, while deploying innovative reforms in data and artificial intelligence.

“Ultimately, we believe that the FIRS can shoulder the responsibility of providing revenue needed for the governments across the Federation to cater for the needs of the Nigerian people through taxes.

“This is feasible once we get the much-desired support from the three tiers and arms of government, as well as all stakeholders.”

The FIRS appreciated President Muhammadu Buhari for his support, as well as the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed and the Minister of State, Mr. Clem Agba.

“FIRS Management uses this medium to commend all patriotic taxpayers who paid their taxes correctly, stakeholders for their support, and officers of the Service for their dedication to duty.

“The Service equally owes its achievements in 2022 to effective leadership of the Honourable Minister of Finance, Budget and National Planning – Mrs Zainab Ahmed, her brother, the Minister of State – Mr Clem Agba, members of the National Assembly and the fatherly support of the President and Commander-in-chief of the Armed Forces of Nigeria – Muhammadu Buhari.”

This is the second consecutive year that the Service will be recording unprecedented tax collection.

In 2021, the Service achieved a record tax collection of N6.405 trillion, being over hundred percent of its collection target for the year, as well as the first time that the Service will cross the six trillion mark.

In 2022, building on the success of the preceding year, the Service achieved a record collection of N10.1 trillion, being over 96% of its collection target for the year, and the first time the Service will cross the ten trillion mark.

This collection represents an over one hundred percent leap from the tax collected by the Service in 2020—the first year of the current management of the Service.

Johannes Oluwatobi Wojuola
Special Assistant to the Executive Chairman, FIRS
(Media&Communication)
January 23, 2023

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