*Urges apex bank to expedite circulation of new currencies
*UBA GMD: CBN, banks addressing challenges associated with new naira disbursement
*Atiku alleges APC conniving with banks to hoard new N1000, N500, N200
*Police warn against lawlessness in Kwara as governor calls for calm
*MAN decries hiccups in implementation, says manufacturers will suffer 25% drop in sales
The presidential candidate of the Labour Party, Mr. Peter Obi has appealed to Nigerians to exercise patience with the federal government and Central Bank of Nigeria over the challenges associated with the circulation of the new banknote, just as he appealed to the banking sector regulator to expedite action with its circulation.
This was just as the Group Managing Director and Chief Executive Officer of United Bank for Africa (UBA) Plc, Mr. Oliver Alawuba, at the weekend expressed support for the naira redesign project of the CBN, saying the apex bank and deposit money banks (DMBs) were working towards addressing challenges associated with the project.
However, the presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, yesterday alleged that some bank executives were conniving with the ruling All Progressives Congress (APC) to frustrate the distribution of the new naira notes in a bid to frustrate the policy.
Speaking also on the matter, Kwara State governor, Alhaji AbdulRahman AbdulRazaq, called for more supply of the new naira notes to ease things for the masses and stabilise the currency swap policy.
But the National Chairman of the All Progressives Grand Alliance (APGA), Chief Victor Oye, has argued that contrary to the notion that the introduction of new naira notes would checkmate vote buying during forthcoming elections, politicians who are used to the act may still find ways to engage in the criminal act.
The Manufacturers Association of Nigeria (MAN) projected that the bottleneck militating against the effective implementation of the policy would cost manufacturers a 25 per cent decline in sales of manufactured products.
Obi, who spoke on Arise News Channel, yesterday, admitted that currency redesign was not peculiar to Nigeria and that it has long time economic and societal benefit but with a short time inconveniences and pain.
While calling on people of Nigeria to cooperate with the federal government and the CBN in addressing difficulties that come with the exercise, he called on the apex bank and other commercial banks to expedite action to make the new notes available to the various classes of the society, especially the masses and the unbanked.
Speaking further, the presidential candidate stated that there was nowhere the exercise would take place that would not come with some hitches.
He cited the example of India when the Asian country embarked on similar currency redesign and how Indians encountered difficulties during the process, which according to Obi later yielded a bountiful long term economic advantage for the people and their country.
“Currency redesign is not peculiar to Nigeria. This is an exercise that has long-term economic and social benefits, but comes with short-term inconveniences and pain. My appeal to Nigerians is that we should have patience with the federal government and the CBN, while at same time appealing to the CBN and the banks to expedite actions that would ensure that these new currencies are available to small depositors, small businesses, the unbanked and people in rural areas.
“I believe the CBN can make it available as quickly as possible. Everywhere there have been redesign of currency in a third world country, it comes with challenges and in some instance riots.
“Look at what happened in India, there were riots. But today, India is better off and their economy benefitted better. This policy was announced on 26th of October, 2022 and they gave extra 10 days and all of a sudden people are rioting and behaving as if it came overnight.
“For me, it is the poor people I see on the queues that we should quickly deal with as quickly as possible and I urge the CBN to deal with the issue of the low depositors and those who live in rural and unbanked areas. It is critical and it is important. I am also urging Nigerians to bear with them. We have redesigned our currencies, we can’t do anything about it. Government has taken a decision and we can’t be using two currencies at same time. So, the decision has been taken, let’s run with it.”
UBA GMD: CBN, Banks Addressing Challenges Associated with New Disbursement
In a related development, Alawuba at the weekend expressed support for the naira redesign project of the CBN, saying the apex bank and deposit money banks (DMBs) were working towards addressing challenges associated with the project.
Alawuba, who said redesigning of the N200, N500 and N1000 denominations would support monetary policy, however, pointed out that the hardship Nigerians are currently passing through would easy off soonest.
Speaking after being conferred with an honorary doctoral degree in Banking and Finance at the 8th convocation ceremony of the Imo State University, Owerri, he said the new policy would stabilise the naira.
Alawuba assured that banks were working assiduously with the central bank to address the present hardship faced by Nigerians in accessing the new naira notes.
He said, “The redesign of the naira is a positive policy that will support the economy in the long run. It’s true that we are passing though transition period and I believe that the CBN is working with banks to make sure that the aspiration and purpose of the redesign come into fruition for the good of the country.”
On the allegations that the banks were are frustrating the intentions of the naira redesign, Alawuba urged Nigerians to focus rather on the positive sides of the policy.
He urged private sector to work in harmony with the public sector to ensure that the purpose of the naira redesign was achieved.
Whilst congratulating Alawuba, the Vice Chancellor, Prof. U.U. Chukwumaeze pointed out that the conferment was in recognition of Alawuba’s contribution to redefining Public Sector Banking in Nigeria and across Africa.
“The honour is in recognition of your numerous contributions to the financial sector in Nigeria and Africa and as one of the major drivers who contributed to taking modern banking to all state capitals and major cities in Nigeria where hitherto most banks primarily concentrated on the major commercial centres of the country,” Chukwumaeze stated.
Speaking after receiving the recognition, Alawuba expressed his appreciation to the leadership of the university for the honour extended to him, just as he attributed his success to God and hard work. He took time out to encourage the students to stay focused and diligent whilst congratulating other fellow awardees.
Alawuba said. “I am grateful to the management of IMSU for the honour and recognition, and I want to thank the amiable governor, the VC and other top executives of this great institution for the honour that you have shown me today. I promise that I will continue to do my best to make this school and indeed the indigenes of this great state proud. I also seize this opportunity to advise the young ones to be focused and put their best in their studies, so that one day they will also be recognised globally.”
The visitor of the university and Governor of Imo State, Hope Uzodimma, said his administration would do all the needful to help the university, fulfil noble expectation of rising to the challenge of assuming greater responsibility to move the State forward.
The governor spoke in his capacity as the Visitor of Imo State University during the 8th Convocation Ceremony which held at the Convocation Ground in Owerri.
No less than 5000 graduands comprising first degrees, post graduate diplomas, higher degrees and honorary degrees from 2014- 2015 set up to 2021-2022 set which produced 30 first class graduates were convoked.
APC Conniving with Banks to Hoard New Naira Notes, Atiku Alleges
The presidential candidate of the PDP, Atiku Abubakar, has alleged that some bank executives were conniving with the ruling APC to frustrate the distribution of the new naira notes in a bid to frustrate the policy.
Special Assistant on Public Communication to Atiku Abubakar, Mr. Phrank Shaibu, made the allegation in a statement yesterday, while reacting to a statement by the Speaker of the House of Representatives, Femi Gbajabiamila.
Shaibu said the viral videos showing government agencies busting banks hoarding the new naira notes was clear evidence of sabotage.
He said, “Intelligence reaching us is that the APC is in collusion with some top bank executives to frustrate the policy of the CBN. As shown in several trending videos posted by government agencies on social media, hundreds of millions of naira are in bank vaults but the banks are deliberately refusing to distribute them.
“It is no secret that all the commercial banks are headquartered in Lagos where Bola Tinubu holds sway as godfather.
“The ultimate goal is to frustrate the policy so that the APC will be able to bring out the old notes it has stashed for the sole purpose of vote buying and distribution with bullion vans. For this reason, we commend the EFCC and the ICPC for exposing these unscrupulous bankers.”
Shaibu lambasted Gbajabiamila, for using his position as the 4th most senior elected official in the country to play cheap politics.
He advised Gbajabiamila to play decent politics like the Senate President, Ahmad Lawan; and Vice-President Yemi Osinbajo.
He added, “It is the height of idiocy for the nation’s number four citizen to play cheap politics with a monetary policy introduced by his own party which is in power. Gbajabiamila wishes to become the chief of staff to Tinubu in the event that Tinubu wins so his overzealousness is quite understandable.
“However, his attempt to bring Atiku into this issue shows how mischievous he is. Gbajabiamila summoned the CBN Governor, Godwin Emefiele, last week where they reached an understanding and issued a resolution which the House and the CBN agreed to.
“But because he is already seeing the imminent defeat of his master at the polls, he is now playing dirty politics.
“Nigerians must note that this is a policy being implemented by an APC government. However, the likes of Gbajabaimila are too timid to approach President Buhari to reverse this policy. His aversion for this CBN policy has nothing to do with the masses. It is about the inability of his master to deploy bullion vans on election day.”
Shaibu described Gbajabiamila as a hypocrite who pretends to be on the side of the masses during crisis but is actually working for his own selfish reasons.
He recalled that during the eight-month strike embarked on by the Academic Staff Union of Universities (ASUU), Gbajabiamila pretended to be on the side of the lecturers only for him to abandon them at sea.
Shaibu said, “Gbajabiamila promised the lecturers that they would be paid their arrears. After the lecturers called off their strike, he denied making the statement in the first place. Such a liar should not be believed by the masses.
“When dirty petrol was imported last February, Gbajabiamila set up a committee to investigate it. Till date he has done nothing about it. The fuel scarcity has continued to linger for over eight months but he remains mute.
“This is the same man who scuttled the ongoing probe of the Niger Delta Development Commission (NDDC) at the House of Representatives for selfish reasons.”
“However, huge volumes of the new notes must not get into the hands of unscrupulous politicians who plan on using bullion vans to distribute money on election day. The desperate APC must not be allowed to steal this election,” he said.
Also, the PDP has called on the CBN to monitor distribution of new Naira notes and also provide mobile banks in rural areas. The National Publicity Secretary of the party, Debo Ologunagba in a statement issued yesterday, also decried the excruciating pain and distress being faced by Nigerians arising from their inability to access the new naira notes.
He said the pain was occasioned by the reported nefarious activities of corrupt All Progressives Congress (APC) leaders who were allegedly compromising the system to intercept and hoard the new bank notes for their selfish vote-buying plans ahead of the February 25, 2023, presidential election.
The main opposition party expressed sadness that the cash crunch had persisted due to the alleged sabotage of corrupt APC leaders, including the APC presidential candidate, Bola Ahmed Tinubu, who was alleged to have masterminded the intercepting and hoarding of the new notes for their selfish agenda.
The PDP said it was disgusted by the hypocrisy being exhibited by the APC presidential candidate, who, despite his alleged role in the cash scarcity was pointing accusing fingers at others and seeking to exploit the ugly situation to incite unsuspecting Nigerians with the view to disrupting the 2023 general elections.
Ologunagba said Tinubu and his apologists in the APC were aware that he had no chance in the election and thus are devising all manner of shenanigans to overheat the polity, derail the electoral process and force an undemocratic situation upon country.
He, however, expressed optimism that the hopelessness and anguish brought upon the nation by the APC administration would be a thing of the past when the PDP presidential candidate, Atiku Abubakar assumes office as President come May 29, 2023.
The PDP called on president Muhammadu Buhari to protect Nigerians by going after these felonious APC leaders as well as the saboteurs in the system who are reportedly working with the APC Presidential Campaign to mop up cash meant for distribution to our citizens.
MAN Decries Hiccup in Implementing Naira Redesign
However, MAN projected that the bottleneck militating against the effective implementation of the policy would cost manufacturers a 25 per cent decline in sales of manufactured products.
This view was expressed by the Director General of MAN, Mr. Segun Ajayi-Kadir, in an exclusive interview with THISDAY at the weekend, in which he warned that no effort should be, “spared to ensure that the price to be paid for this otherwise laudable policy does not outpace its gains.”
Ajayi-Kadir said: “To be clear and I want to put this first, there is no doubt that the currency redesign is desirable. There are socioeconomic and political imperatives for the change. It is a critical element of the CBN ‘cashless economy’ policy that should have far reaching positive results for our economic.
“However, the continued scarcity of new the redesigned naira notes is quite worrisome. With our growth prospects heading further south, we can ill afford a downturn in our GDP. The negative impact it portends for local producers, the agricultural and distributive segments of our economy is huge and may worsen the bashing our economy has received from both external and internal shocks in recent times.
“I would put a rough estimate of 25 per cent drop on monthly sales of domestic goods if the situation should persist for the next three weeks.
“As the purchases from the retail end that is mostly transacted in cash dries up, you will immediately notice a sharp drop in wholesale purchases and instant buildup of unsold inventory in our industries.”
He warned that the prevailing cash crunch where naira notes are not readily available to businesses, individuals and households, “is not good for anyone, including the industry, the government and the ordinary citizen. You will have a compounded crippling lack of patronage for the domestic manufacturer; the denial of government revenue that would have accrued from consumption taxes and the disruption of the daily life and need of the average Nigerian.”
The Director General of MAN told THISDAY that he had expected that the CBN and the banks should be engaging at the highest level at this time.
He said: “There is need for strategic communication and joint operations to ensure widespread and sustained availability and circulation of the redesigned Naira notes. It is baffling to approach a bank only to be told that there is neither the old nor the new Naira notes!
“We hope that the resumption of payment across the counter in the banks and the intensification of the CBN special cash swap arrangement in remote areas may yield positive results.”
Police Warns against Lawlessness in Kwara, Governor Calls for Calm
Kwara State Police Command at the weekend warned that any move by the hoodlums to cause lawlessness that was unleashed on some banks in the country due to scarcity of the naira would be vehemently resisted in the state.
Already, the command has directed the aggressive patrols of banks and other financial facilities across the state in order to check any breaking down of law and order.
Also, at the weekend, the state governor called for calm and patient over the scarcity of naira notes on some banks ATMs in the state.
In a statement issued in Ilorin, that was signed by the command’s Public Relations Officer(PPRO), Mr. Okasanmi Ajayi, the police explained that, “Intelligence available to the command indicates that hoodlums have perfected plans to cause crisis in Kwara state over the naira notes swap that is ongoing in Nigeria at present, which the government is doing all within its power to normalise.”
The statement added, “The command wishes to assure the good people of Kwara State of the command’s capacity to deal ruthlessly with any lawbreaker.
“Criminals are therefore advised to shelve any such dastardly idea and consequently, the Commissioner of Police, Kwara State, CP Paul Odama has ordered aggressive patrols of banks and other financial facilities across the length and breadth of the state.”
The statement however warned that, criminal elements in the state to change their minds as anyone arrested would be met with heavy consequences. A word, they say, is enough for the wise.”
In a related development, the state governor has called for more supply of the new naira notes to the citizens to ease things for the masses and stabilise the currency swap policy.
Speaking during a courtesy meeting with the CBN Consumer Protection Department in Ilorin, led by Mrs. Rashidat Jumoke Monguno, the governor called for calm while all stakeholders work to ease the situation.
“It’s quite proactive for you to come down to various states to see that compliance is being followed through down to the grassroots level. Our people really need this at this time,” the governor said.
“We appreciate your coming and we will continue to engage the citizens, traditional institutions, students, all other segments of the society, farmers and NGOs to pass the message through for us to have calmness and make sure the process is seamless.”
Naira Redesign Policy May Not Stop Vote Buying, Says Oye
The National Chairman of APGA, Chief Victor Oye has said contrary to the notion that redesigning the naira would checkmate vote buying during forthcoming elections, politicians who are used to the act may still find ways to engage it.
He said as noble as the naira redesign policy may be, it’s poor timing had robbed off on the advantages and is currently causing hardship to people around the country.
Speaking to THISDAY at the weekend, Oye said there was no way desperate politicians would not find ways of circumventing the rule and still perpetrate vote buying.
He said APGA’s worry was that the crisis of new naira notes and fuel shortages came in less than one month to the national election.
“For us, we believe that the timing is not the best, ” he said.
Oye said the crisis of new naira note may lead to serious disruptions in social and economic activities and might ultimately have negative impact on the conduct of the forthcoming national election in the country.”
He said: ” For me government, didn’t have enough time to articulate the situation well. They did not carry people along and if they had carried out a referendum, they would have found out that Nigerians would have requested for a longer period for the implementation of the naira design.
“But federal government applied the surprise mechanism which has put the nation in a state of confusion as people could not have access to their money and cannot meet their basic needs.
“While the long term effect is still uncertain, it’s immediate impact is that it is going to have disruptive effect on the forthcoming national elections. First people may not be able to move, travel to go and vote.”
ACAMBs Assure Customers of Improved Access to Cash, Refute Allegations of Banks’ Hoarding
The Association of Corporate Affairs Managers of Banks (ACAMB) yesterday said banks are currently working with the CBN to ensure that customers have access to cash through ATMs and other payment channels as well as Over-the-Counter (OTC) in the banking halls.
ACAMB in a statement signed by its President, Rasheed Bolarinwa, also refuted allegations that the financial institutions were hoarding or holding back naira notes thereby subjecting Nigerians to harrowing experiences over the past few days.
ACAMB however, empathised with the Nigerian public on the unintended hardships being faced in the ongoing rollout of the redesigned naira notes and enhanced cashless policy.
The banks’ media managers acknowledged that the unintended constraints in the withdrawal of old naira notes and circulation of new naira notes, alongside the national policy to enhance cashless transactions, have had unintended effects on the generality of Nigerians.
They assured that the entire banking sector was working with the central bank and other stakeholders to urgently address constraints in the implementation of the cashless policy and ensure that Nigerians suffer no untoward pains in the transition process.
According to the association, “We are confident that these measures, in addition to efforts by the regulatory CBN, will result in greater ease of access and cash liquidity. The federal government and the CBN have reiterated similar readiness to address any constraint in the cyclical flow, including making adjustments, where necessary.
“ACAMB urges Nigerian banking public to exercise patience and not to resort to any untoward behaviour against Bank staff or banking facilities.”
The association also argued that banks and customers are inseparable stakeholders who exist for one another, adding that it would be detrimental to the interest of the general banking public to disrupt banking operations by untoward actions against bank staff or vandalisation of banking facilities.
The statement said, “ACAMB affirms without any equivocation that banks are not in any way hoarding or holding back naira notes or engaging in any act inimical to our avowed commitment to exciting customer experience.
“ATMs are being loaded every day and cash is being paid as provided by the CBN, as regularly being checked by CBN inspectors and other regulators including anti-graft agencies.”
The group banks have taken additional measures said in the past few hours to quicken the flow of naira notes as well as deployment of extra technical supports for online payments, additional security at ATMs to ensure all-clock usage, technological back-up to reduce online downtime to the barest minimum, additional staff deployment to counters to attend to cash transactions and timely interbank and inter-branch networking to bridge any gap.
Among other things, the ACAMB stated that the Nigerian banking industry owes its global success as a leader in digital banking to its enthusiastic customers and remains committed to doing everything possible to ensure customers continue to have a delightful experience in the banking halls and across electronic and other alternate channels.
It said, “Nigerian Banks have invested an estimated total sum in excess of N100 billion in setting up and maintaining cutting-edge electronic channels over the past few years as part of an ongoing commitment to seamless customer experience and real-time digital financial transactions.
“From internet banking to mobile apps, Automated Teller Machines (ATMs), Point of Sales (PoS) merchants, mobile wallets, Unstructured Supplementary Service Data (USSD) codes, agents and digital franchises among others; not less than 80 per cent of Nigerians now enjoy one form of digital or cashless transaction or another, powered by investments by Nigerian banks.”
God Ordained Tinubu Presidency; Some Politicians Better Than Us – Shettima
Vice-President Kashim Shettima says God ordained Bola Tinubu’s emergence as president of Nigeria. Mr Shettima admitted that though he and his principal are the two most powerful men in the country, some individuals are better than them.
“We do not occupy our positions because of our physical prowess and certainly not because of our pedigree; there are people of superior pedigree than us,” stated Mr Shettima. “It is a gift from God and a call to serve humanity for a very short span of time.”
The vice-president reiterated Mr Tinubu’s commitment to improving Nigerians’ livelihood and the country’s fortunes.
“I always believe that power is a humbling experience. We spend more of our lives outside power than in power, and, most importantly, I see it as a gift from God,” Mr Shettima added. “Asiwaju and I are occupying the prime positions in this country, not because of our intellectual acumen or political sagacity but purely by the grace of God.”
Mr Shettima stated this when he hosted the University of Ibadan Postgraduate School alumni, according to a statement by his media, Stanley Nkwocha. The delegation also included members of the 1989/1990 set of the National Youth Service Corps with whom he served in Calabar.
“And the impact we make in the lives of our people will determine our positions here and in the hereafter. So, to me, it is a humbling experience; it is an opportunity to add value to a great nation like ours,” said the vice-president. “More so, Nigeria’s anticipated demographic bulge suggests we improve the quality of governance in the bid to mitigate any looming demographic disaster.”
Army Busts Gun Factory In Kaduna, Arrests Syndicate
The Nigerian Army said it busted a gun manufacturing factory in Kaduna and arrested a suspected gunrunner, Napoleon John, following a sting operation to mop up illegal weapons.
This was contained in a statement released on Friday on the X (formerly Twitter) account of the force.
According to the statement, the discovery of the illegal gun manufacturing factory was successful after a week-long intelligence operation which led to the arrest of the suspect and recovery of 22 different weapons.
The statement read in part, “In line with the Commander Operation SAFE HAVEN and General Officer Commanding 3 Armoured Division, Major General Abdulsalam Abubakar’s resolve to deal decisively with sponsors and perpetrators of crime as well as mop up illegal weapons in OPSH Joint Operations Area, troops have uncovered a gun manufacturing factory in Kafanchan, Jema’a Local Government Area of Kaduna State.
“The discovery followed a week-long intelligence operation that finally led to the capture of a wanted gunrunner, Napoleon John, who had been on the wanted list of OPSH. The suspect who confessed to the crime led troops to a concealed factory where arms of different calibres were sold by another miscreant identified as Monday Dunia, who confessed to having been in the business for more than five years fuelling the crisis in Kaduna and neighbouring Plateau State.
“A thorough search of the factory led to the recovery of 22 different weapons including seven pistols, two locally fabricated AK 47 rifles, two military grade AK 47 rifles and nine revolvers.
Others include one submachine gun, rounds of 7.62mm special ammunition, machine tools and a gas cylinder. In a follow on operation from midnight of yesterday up till early hours of today, 22 September 2023, troops raided another hideout in Adua 1 village in Kafanchan and captured additional 2 x AK-47 Rifles, 2 x revolver rifles, live rounds of 9mm and 7.62 ammunition, 6x dangerous daggers, 1x hacker axe, several empty cases of 7.62mm special rounds, two mobile phones, one fragmental jacket, two police uniforms, one military camouflage trousers, one ammunition magazine carrier, one pistol holster, one military grade camel pouch, one police combat helmet, 2 masks, 4 identity cards, gunpowder, shrapnels, charms and amulets. Also recovered were machine tools and other equipment. The major kingpin(name withheld) is still on the run but would soon be apprehended.”
The statement also noted that the force troops have been directed to arrest all fleeing members of the syndicate who will be made to face the consequences of their actions.
He said, “I have built a world of my own in my head since I was little. Because growing up, I was a fat kid. I was chubby. So, I don’t go out because the kids in the area make fun of me. They called me orobo (someone who is fat). And they bullied me. So I always stay indoors.
“During that time that I always stayed indoors, I’d already built this fantasy world in my head. In the world that I have built in my head, I’m very comfortable in that space.
“So, I reintroduced myself to the world after I lost weight; I lost all forms of social skills. I don’t know how to communicate. I don’t know how to socialise with people.”
FG May Pay N1.68tn Fuel Subsidy, Marketers Forecast N900/Litre
•Petrol price to rise again as naira nears N1,000, crude oil hits $95, IPMAN warns
•Operators commend government for subsidy proposal, CSOs oppose fresh subsidy
The Federal Government may spend about N1.68tn as subsidy on Premium Motor Spirit, popularly called petrol, from September to December this year, an analysis of data provided by oil marketers and the sector has shown.
PMS dealers stated on Thursday that the pump price of petrol should be between N890 to N900/litre based on the fall of the naira against the United States dollar and the surge in the price of crude in the international market.
Petrol currently sells at between N598 and N617/litre depending on the location of purchase, fuelling suspicion that the commodity is being subsidised by the Federal Government.
The government and the NNPCL have not officially admitted that subsidy on petrol has been reintroduced. President Bola Tinubu had on May 29 announced ended the subsidy regime during his inaugural address.
The government subsidises PMS through the Nigerian National Petroleum Company Limited. NNPCL is the sole importer of PMS. Other marketers stopped PMS imports due to their inability to access foreign exchange.
The removal of subsidy led to an increase in the pump price of petrol from about N198/litre in May to the current rate of N617/litre. But the fall of the naira coupled with the rise in crude oil price have continued to mount pressure on the cost of PMS.
Dealers in the downstream oil sector explained that the cost of crude oil and the exchange rate of the naira-dollar accounted for over 80 per cent of the cost of PMS.
Brent crude, the global benchmark for oil, rose to about $95/barrel on Thursday. It had peaked to $97/barrel the preceding day, which was the highest figure in 2023.
Oil had started the year at about $82/barrel, dipped to $70/barrel in June, but traded above $94/barrel in the past week.
Also, The PUNCH reported on Thursday that the naira continued its downward trend after exchanging to the dollar at 980 on the parallel market on Wednesday.
A week earlier, the naira was exchanged to the dollar at 950/$.
However, on the FMDQ at the Investor & Exporter forex window, the naira appreciated slightly after closing at 770.71/$ on Wednesday from 776.76/$ on Tuesday.
The forex crisis and the recent rise in crude price, according to oil marketers, have made it impossible for petrol price to still remain at N617/litre. They insisted the government had quietly reintroduced fuel subsidy.
A media report on Thursday indicated the Federal Government paid N169.4bn subsidy in August, 2023.
Quoting a Federal Account Allocation Committee document, the report said the Nigerian Liquefied Natural Gas paid $275m as dividends to Nigeria via NNPCL.
NNPCL, according to the report, used $220m (N169.4bn at N770/$) out of the $275m to pay for the PMS subsidy in the review month.
“I told you earlier that there is no way that the government will sustain the price of petrol at N617/litre without paying subsidy on it, going by the continued fall of the naira,” the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, told The PUNCH on Thursday.
He added, “The dollar is almost N990 at the parallel market currently, and you can see the effect of this on the pump price of diesel. Diesel is close to N1,000/litre, so the retail price of PMS should be around N890 to N900/litre.
“Therefore, it is better the government assists the masses by paying subsidy. From our records, in the United States, the super product or petrol is sold around $3.9, which is close to about N3,000/litre.
“The premium product is sold at about $2.89, which is over N2,000/litre. And if you check in other African countries you will find out that the product is being sold at between N1,200 and N1,500. But going by the forex rate in Nigeria, it should be around N900/litre.”
It was gathered that the subsidised ex-depot price of petrol as sold by NNPCL, was between N585 and N600 depending on area of purchase.
By subtracting the ex-depot cost of N600/litre from the projected unsubsidised rate of N890/litre, that the government may have been spending about N290/litre as subsidy currently.
In July, data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority showed that between June 1 to June 28, 2023, which was described as the post-deregulation period, the total petrol consumption across the country was 1.36 billion litres, while the average daily consumption was put at 48.43 million litres.
With an average daily consumption of 48.43 million litres and an estimated subsidy of N290/litre, the government could be incurring N14.04bn as subsidy daily, while this could rise to N421.3bn monthly.
This could rise to as high as N1.68tn for the months of September, October, November and December 2023, should the naira continues its fall against the dollar and crude price maintains its upward surge.
Subsidy consumes trillions
Before Tinubu announced the end of fuel subsidy in May, the scheme had consumed trillions of naira from the government’s purse.
In October 2022, The PUNCH reported that the government of former President Muhammadu Buhari had spent about N6.88tn in subsidising petrol at the time.
This was based on data obtained from the Nigerian National Petroleum Company Limited and the Nigeria Extractive Industries Transparency Initiative.
NEITI report showed that fuel subsidies gulped N316.7bn in 2015; N99bn in 2016; N141.63bn in 2017; N722.3bn in 2018; N578.07bn in 2019; and N134bn in 2020.
Although the NEITI report did not state the amount spent in 2021 and 2022, figures obtained from NNPCL indicated that fuel subsidy jumped to N1.43tn in 2021.
NNPCL data also showed that petrol subsidy gulped N2.565tn between January and August last year. The oil company, however, described its subsidy spending as under-recovery.
The latest report on 169.4bn spent on subsidy in August indicates more billions of naira might be spent on the commodity from September to December 2023.
Commenting on the government’s decision to reportedly reintroduce fuel subsidy, the National Secretary, IPMAN, Chief John Kekeocha, said it was obvious the price of petrol was now higher than N617/litre.
He commended the government for considering the plights of its citizens, but stressed that the government should come out clean on subsidy.
“The government must come out clean on subsidy. We know it is not possible to be running full deregulation at the current price of petrol. However, it is commendable that they are considering the plights of the masses,” the IPMAN official stated.
Officials of the NNPCL and the Nigerian Midstream and Downstream Petroleum Regulatory Authority stayed mute on the subject when contacted.
Meanwhile, the Chairman of Satellite Depot, IPMAN, Akin Akinrinade, said a rise in the pump price of diesel, a deregulated product, should mean a corresponding rise in the pump price of petrol which was also recently deregulated with the official ending of the subsidy regime in June.
He said, “Ex-depot price of diesel is around N989 per litre while at the pump it is now selling at N1000 per litre. Ex-depot price of petrol at DAPPMAN depots is between N572-N575 per litre, while NNPCL depots sell at N556.5 per litre.
“But you know the price of petrol at the pump has remained the same for a while now despite the increase in crude oil price at the international market. I think the government is doing everything it can to keep petrol prices the same due to the political nature of the product.”
He added, “However, there could be other means by which the government is subsidising it. For instance; local levies such as NIMASA, NPA and other levies are currently being paid in naira, no longer in dollars. So, if the government is working on that; it can also reflect on the prices of petrol by bringing it down. And as you know, no marketer brings in petrol due to the high price of forex. They claim they don’t have access to dollars at the CBN rate. So, it’s only NNPC that is bringing in products.”
An unconfirmed source told The PUNCH “subsidies is back.”
He said, “You know President Tinubu in his inaugural speech said the government would intervene if need be. So that is exactly what is happening. Because if not for that; going by what is happening now, using CBN’s official rate, petrol should be selling for N625 per litre in Lagos and higher prices going up north. But what we have at the pump is still around N580 per litre. But if you use black market rate, petrol should be around N800 per litre in Lagos. But we should be careful not to set the country on fire since we know the government is currently discussing with Labour,” the source said, asking not to be quoted.
Brent international price had reached $95 a barrel in the week, with Nigeria’s sweet crude also selling at around N100 per barrel.
“Any kindergarten would know that the government has returned to paying subsidies. I think we should be asking the NNPC to tell us the magic they are performing to keep prices the same for a while now,” a top source among the oil marketers told The PUNCH on Thursday.
The President, IPMAN, Chinedu Okoronkwo, said there was no need for speculation on the return of subsidies.
“The good thing is that NNPC is still importing and we are their major customers, so why should we be disturbing ourselves? Speculating will only throw the country into chaos. We believe the NNPC knows what to do, and they are doing exactly that. The Federal Government has assured us that the refineries will start working by December, and we know the NNPC has enough stock to last us till then, and even beyond,” he said.
According to a report by the Nigeria Extractive Industries Transparency Initiative, subsidies had cost the country about N1.99tn from 2015 to 2020.
Also reports by the Nigerian National Petroleum Company Limited to the Federation Accounts Allocation Committee showed that petrol subsidy cost N1.57tn in 2021, and N1.27tn from January to May 2022.
The sum of N3tn was also budgeted for subsidy from June 2022 to June 2023.
The Chairman, Centre for Anti-corruption and Open Leadership, Debo Adeniran, said it would be difficult for the government to maintain a balance in petroleum price in the hands of private sector individuals.
Adeniran noted, “It is practically impossible for the government to maintain a steady balance in the price of petroleum products in the hands of business men and women that are running the cartel. They will always find a way of making things difficult for Nigerians and force the hands of the government backward towards ensuring that there is one form of subsidy or the other because without the subsidy, they are not used to doing honest business. They will find a way of embarrassing the government by ensuring that there is no adequate supply of petroleum products or making their cartel increase the cost of petroleum products.
“The new government that is just consolidating its stay in power want to avoid the embarrassment and by so doing, it will look backwards and succumb to the blackmail of the oil cartel. Those who are also speculating on forex, they have ensured that the exchange rate is stepped higher. Once the foreign exchange is on the high side, there is a ready excuse for the oil marketers to increase the price so that government can pay them extra at the expense of Nigerians.”
Speaking with our correspondent, the Executive Director, Civil Society Legislative Advocacy Centre, Auwal Rafsanjani slammed the FG for lack of transparency and accountability to public trust.
Rafsanjani, said “We cannot over-emphasise the instrumentality of transparency and accountability to public trust and confidence as key drivers of good governance.
“We as citizens must continue to call out the government on the opacity around petroleum sector governance and how it has continued to impoverish Nigerians.”
He said citizens would continue to suffer the effect of the removal or reintroduction of petrol subsidies, until the government embraces sincerity both in its intentions and actions.
The Executive Director explained further, “The lies and misinformation are endless. The NNPCL seems to continuously overstep its boundaries and disseminate half-truths. Where does the NNPC derive the authority to make arbitrary deductions for subsidy payments that have been declared removed by the President?
“This is a recurrence of the 2020 House of Representatives Committee on Public Accounts probe into the questionable withdrawals of over $21bn from the Nigeria Liquefied Natural Gas (NLNG) dividends account by the NNPC.
“No official statements have been made as to whether subsidies are back, but in principle and practice, we are back in a subsidy regime, if you consider that international crude prices has crossed $95 a barrel and the exchange rate is now N920 per dollar. The government needs to be clear and decisive in its actions. But these actions must be informed by policies and plans that are technically sound, publicly acceptable and administratively feasible.”
He advised that “We must build a democracy centered on public trust and accountability.”
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