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NNPC Weekly: How NASS, Others Intervened in Aviation Fuel Price Reduction

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The House of Representatives and the Nigerian National Petroleum Company Limited (NNPC Ltd) last week facilitated a deal between petroleum products marketers and airline operators to keep the price of Aviation Turbine Kerosene (ATK), at N500 per litre.

The ATK is popularly known as aviation fuel.

The agreement was reached on Monday at the second day of the investigative hearing of the House of Representatives Adhoc Committee on High Cost of Aviation Fuel which held at the National Assembly Complex, Abuja.

Presenting the highlights of the agreement, the Group Managing Director/Chief Executive Officer GMD/CEO of NNPC, Malam Mele Kyari, stated that both parties were represented.

The petroleum product marketers were represented by the Major Oil Marketers Association of Nigeria (MOMAN) and the Depots and Petroleum Products Marketers Association (DAPPMA).

At the other end, the aviation industry stakeholders were represented by the Airline Operators of Nigeria (AON) and the Nigerian Civil Aviation Authority (NCAA) as both groups agreed to have the pump price of aviation fuel pegged at N500 per litre for the next three days.

“In the next three days, representatives of MOMAN, DAPMAN and Airline Operators of Nigeria would sit down and adopt transparent bases of pricing.

“That as requested by the Association of Airline Operators of Nigeria, they will be granted license by their authority to also import ATK so as to have a way of benchmarking prices.

“They will also have a reference exchange rate for the naira,” Kyari said.

Stakeholders also resolved to engage and agree on a premium which would also be different from client-to-client depending on the volumes they want to buy and the credit limit that each marketer can permit.

This is expected to help establish a transparent basis for pricing, eliminate price discrepancies and would throw up the real market value of the product.

Earlier, the Executive Director Systems, Storage and Retailing Infrastructure of the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), Mr Ogbogu Ukoha, highlighted some of the factors that sent the price of ATK over the roof.

“One of the major factors influencing the high cost of ATK remains the issue of availability of forex that is, the source from which marketers acquire their Dollars either from the Central Bank of Nigeria (CBN) or the parallel market.

“When that is added to the fact that ATK is deregulated, it becomes a commercial dilemma whereby marketers can’t sell below certain price due to forex barriers and challenges of landing cost.

“However, airline operators insist that they can’t buy products above a particular amount if air fares will remain affordable,” Ukoha said.

NNPC GMD/CEO, Malam Mele Kyari
NNPC GMD/CEO, Malam Mele Kyari

Speaking in similar vein, the Secretary of DAPPMA, Mr Olufemi Adebayo, explained that the scarcity of forex was a major issue in rising price ATK.

“If we can buy dollars at N410 or N420, the price will be different. Unfortunately, we cannot.

“What you buy from the street is different from what you get from the banks; and for dollar, the more you want it, the cheaper it’s not.”

On his part, the Chairman of MOMAN, Mr Olumide Adeosun, stated that part of the challenge with the pricing of ATK was the fact that it is the most difficult to handle of all the middle distillates because it required extra licensing to produce.

“There are refineries in Nigeria today that produce ATK but can’t sell the product because it has to be licensed.

“Some of the modular refineries that produce diesel in the country can produce ATK, but these refineries are not certified for such production,” he said.

Adeosun also disclosed that the look-back method of determining the price of ATK in the aviation sector lends itself to abuse by airlines which often want to take advantage of price variations in the market.

“Aviation fuel price index is determined by the previous month’s average.

“Habitually, product buyers want to take advantage of price variations at the market, which sometimes trigger loss.

“You can buy products today when it is expensive and sell at a loss tomorrow, considering how the price index is determined on a look back”.

Speaking on behalf of the AON, Mr Allen Onyema, Vice Chairman and Chairman/CEO of Air Peace, expressed appreciation to the GMD NNPC and the leadership of the House of Representatives for their forthright approach to ATK price hike issue and pledged the commitment of the group to the welfare of Nigerians.

In his closing remarks, the Chairman of the Adhoc Committee and Deputy Speaker of the House of Representative, Rep. Idris Wase, commended the GMD NNPC, Malam Mele Kyari and all the stakeholders for their sacrifices that made the interim agreement possible.

He said the House would continue to provide the needed support to ensure the welfare and security of Nigerians.

Members of the Airline Operators of Nigeria
Members of the Airline Operators of Nigeria

Still in the week under review, the NNPC Ltd., confirmed that it remitted the total sum of ₦59.8 billion to the Federation Account from 2010 to 2018.

The Company made the disclosure at an interactive session with the House of Representative’s Committee on Public Accounts.

In a presentation to the lawmakers, NNPC’s Chief Financial Officer (CFO), Mr Umar Ajiya who represented the GMD/CEO Kyari, tendered documents to show that the sum of ₦59.8 billion was remitted after reconciliation with the office of the Accountant General of the Federation and the Revenue Mobilisation and Fiscal Commission.

He explained that prior to the passage of the Petroleum Industry Act (PIA), NNPC was mandated to remit certain streams of revenue to the Federation Account and the Consolidated Revenue Fund, stressing that under the PIA, the Company would only make remittances to the Federation Account.

On the remittances of revenue generated by the NNPC in 2019 and 2020, the CFO explained that payments were still being reconciled with the Accountant General’s Office and the Revenue Mobilisation and Fiscal Commission.

On his part, Chairman of the Committee, Rep. Oluwole Oke said that the lawmakers would study the documents presented by NNPC and get back to the Company on any matter that needed further clarification.

Present at the interactive session were representatives of the Office of the Accountant General of the Federation and the Office of the Auditor General of the Federation respectively.

Also in the week under review, the NNPC Limited has said that one of the key reasons why the Modular refineries are unable to produce Premium Motor Spirit is the regulation of the pump price of the product by government.

The statement was made by the Group Executive Director, Refining, NNPC Ltd, Mr Mustapha Yakubu during a plenary session at the recently concluded Nigeria International Energy Summit 2022 in Abuja.

A modular refinery is a simplified refinery requiring significantly less capital investment than traditional full-scale refineries. It is a crude oil processing facility with a capacity of up to 30,000 barrels per day.

Nigeria has a number of modular refineries in Edo, Delta, Imo and other states, while plans are on to increase the number through private sector investments.

The GED said that , “Some modular refineries should take up to 50,000 barrels per day, but because of financing you can start with 10,000 barrels and then scale up gradually to 50,000 barrels.

“What do you need to do to produce PMS? He asked, the answer according to him, is to ensure additional investment that will put in the cracker required to produce the PMS”.

Illustration for modular refinery
Illustration for modular refinery

Still talking about the scarcity of PMS, the petroleum products marketers have called for a full deregulation of the downstream sector, even as the NNPC Ltd. considered a fresh investment in refineries and gas infrastructure.

The Chairman, Major Oil Marketers Association of Nigeria (MOMAN) and Managing Director, 11 Plc, Tunji Oyebanji, decried the postponement of full deregulation of the downstream sector.

According to him, “the move is a major setback for the industry”.

He said liberalisation of the sector would enable investors across the value chain to have adequate returns on their investments.

Executive Director of Rainoil Ltd., Emmanuel Omuojine said removing subsidy on petrol would add significant value to Nigeria’s foreign exchange reserves especially on the macroeconomic level.

Chief Executive, OVH Energy Marketing Ltd., Huub Stokman, said the current challenge with scarcity of petrol was a clear indication that Nigeria needed a good emergency plan.

Also speaking at the recently concluded Nigerian International Energy Summit (NIES), Group Executive Director, Refining, NNPC, Mustapha Yakubu, said efforts at rehabilitating refineries are in top gear, noting that deregulation of the downstream sector would boost the country’s domestic refining capacity.

In another development, the Nigerian Gas Company Limited (NGC), a subsidiary of the NNPC emerged the overall best participant at the just concluded 43rd Kaduna International Trade Fair.

The company also bagged the “Best New Product Award” at the fair with the theme “Re-strategising Nigeria’s Economy for Global Competitiveness”.

Presenting the award at the closing ceremony, Minister of Trade and Investment, Otumba Niyi Adebayo, represented by the Permanent Secretary, Mrs Evelyn Ngige, commended NGC on its performance at the event.

Earlier at the NGC special day, the Managing Director (MD) of the Company, Mr Seyi Omotowa said that the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project would deliver on its mandate to provide job opportunities and facilitate balanced economic growth.

The MD who was represented by Mr Emmanuel Igbokwuwe, General Manager, Commercial Division said Kaduna state would reap huge economic benefit because of its strategic location to the AKK gas pipeline.

The 43rd Kaduna International Trade Fair held from Feb. 25 to March 6.

Meanwhile, the Federal Government said it would deal decisively and sanction any Depot Owner caught selling petroleum products beyond the approved Ex-Depot price in the country.

Chief Timipre Sylva, Minister of State, Petroleum Resources, disclosed this in Abuja while briefing newsmen on its effort to resolve the issue of fuel scarcity in the country.

He urged the public to report any one who tried to take advantage of the situation for sanctioning as required by the law.

Consequently, the minister said the trucks that could move petroleum products that ran on diesel were impacted and could not really cope with the high diesel prices.

Though he said the products were available in the depots, the trucks could not move the product because of the high cost of transportation.

This, he said, brought in another dimension to the crisis.

He said that so far, the management of the NNPC Ltd. and Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), had been working very hard.

According to him, the situation is gradually being controlled while supply for Abuja was increased.

Chief Timipre Sylva, Minister of State for Petroleum
Chief Timipre Sylva, Minister of State for Petroleum

Also in the week, Nigeria and Equatorial Guinea signed a Memorandum of Understanding for the supply of gas from Nigerian offshore fields to Equatorial Guinea gas processing facility at Punta Europa.

At the signing ceremony, the Minister of State for Petroleum Resources, Chief Timipre Sylva, stated that the agreement had kicked off a strategic collaboration across the Gulf of Guinea.

He explained that Nigeria’s abundant natural gas reserves would complement Equatorial Guinea’s gas processing and liquefaction infrastructure.

Sylva added that the recent passage of the Petroleum Industry Act coupled with Nigeria’s Decade of Gas initiative triggered the conception of the project, as it had facilitated major investment inflow from Equatorial Guinea into Nigeria.

He said that the project also signaled the joint effort of the two countries in working towards a greener energy world.

Sylva noted that the project has envisioned an offshore gas pipeline development and would also create huge in-country local content opportunities for pipeline and other infrastructure service providers.

On his part, the Minister of Mines and Hydrocarbons for Equatorial Guinea, Gabriel Lima, said that the execution of the MoU was indicative of a great example of the South-South cooperation between Nigeria and Equatorial Guinea.

Sylva, signed the agreement on behalf of the Federal Government, while the Minister of Mines and Hydrocarbons for Equatorial Guinea, Gabriel Lima, signed on behalf of his country. (NAN)

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Oil & Gas

Lawyers Integral to Optimal Regulatory Compliance in Oil Business – NMDPRA

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The Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said the role of legal practitioners is critical across the midstream and downstream energy business value chain in the promotion of optimal regulatory compliance.

Chief Executive, NMDPRA, Farouk Ahmed said this on Monday in Abuja at its 2025 General Counsel and Legal Advisers Forum for Midstream and Downstream Petroleum Companies in Nigeria.

The forum has its theme as ‘Advancing a Collaborative Compliance Culture in Nigeria’s Midstream and Downstream Petroleum Sectors’.

Ahmed was represented by Ogbugo Ukoha, Executive Director, Distribution System, Storage and Retailing Infrastructure, NMDPRA.

He said that the sector’s complexity required a unified compliance culture, rooted in robust and enabling legal frameworks, transparency, accountability and shared responsibility.

“The scope of operations of the sector covers hydrocarbon processing, wholesale marketing, transportation, storage, distribution and retail, and its complexity requires more than technical efficiency.

“The role of legal practitioners is critical across the midstream and downstream energy business value chain.

“They help to promote optimal regulatory compliance to set rules and standards of operations in our complex operational and volatile market environment,’’ he said.

Ahmed said that strategic and pragmatic solutions would be established from the forum to enhance performance of the sector towards creation of shared value for investors and the extensive market of Nigeria and the region.

He said that the Petroleum Industry Act (PIA 2021) had fundamentally restructured Nigeria’s petroleum industry by delineating regulatory responsibilities of the industry into the Upstream, midstream and downstream Petroleum operations.

According to him, the Act prescribed that all operations in the midstream and downstream sectors could only be conducted under appropriate licenses, permits and authorisations granted by the NMDPRA.

He said the PIA also mandated NMPDRA to make regulations concerning midstream and downstream petroleum operations in consultation with its licensees and stakeholders.

“As a result of the feedback received from our stakeholders on the need to strengthen regulatory compliance through simplified regulations, NMDPRA is implementing an inclusive stakeholder process of streamlining the gazetted and published regulations.

“This process will mitigate the complexities of navigating and implementing numerous regulations; eliminate inconsistencies and repetitions across multiple regulations; streamline regulatory processes for ease of business; and encourage investments in the industry.

“Kindly use this forum to critically review and make recommendations on the above.

This will enable us to improve the overall compliance of operators and the performance of the regulatory instruments (Legal frameworks and licenses) in the midstream and downstream sectors,” He said.

He said that NMDPRA would continue its commitment to effective stakeholder collaborations that would foster ease of doing business, investor confidence and sustainable operations.

Deputy Speaker, House of Representatives, Benjamin Kalu said that the PIA as a testament to the foresight and dedication of the National Assembly, had fundamentally reshaped Nigeria’s petroleum sector.

Kalu was represented by Ugochinyere Ikenga, Chairman, House Committee on Petroleum Resources, Downstream.

He said that the act had proven how strategic legislation could serve as a potent catalyst for compliance, investment attraction, and robust sector growth.

“For the PIA to remain truly effective, adapting to a dynamic global energy landscape and addressing unforeseen challenges, there must be an institutionalised robust mechanism for its continuous refinement.

“This is precisely where the invaluable insights of our nation’s petroleum experts and our general counsels, the legal architects and navigators of this complex framework, become indispensable.

“For or further synchronisation and effective post-legislative scrutiny, we must actively solicit and integrate your concerns.

“We envision a future where the National Assembly’s specialised committees regularly invite you professionals to public hearings and dedicated technical working groups,” he said.

Kalu said that this proactive engagement would transform abstract legal principles into tangible operational realities, furnishing us with the real-world data and case studies needed to truly understand the PIA’s strengths and weaknesses.

“Your feedback will illuminate where the PIA might be technically challenging, where legal interpretations create bottlenecks, or where new global trends necessitate legislative evolution,’’ he said.

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OPEC Launches Campaign for Sustained Global Upstream Investment

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Torough David, Abuja

The Organization of the Petroleum Exporting Countries (OPEC) has launched a global investment drive seeking attention to creating value in the upstream oil and gas industry.

The Organization is calling for urgent and sustained investment in the global upstream oil sector, warning that a cumulative $14.

9tn will be required between 2025 and 2050 to meet projected demand and prevent a future energy crisis.

This investment figure, equivalent to $574bn annually, represents the bulk of the $18.2 trillion in total oil-related investments needed over the 25-year period.

The OPEC had projected that $18.2tn investment would be required to meet global oil demand between 2025 and 2050, as it dismissed the notion of a looming peak in fossil fuel consumption as a “fantasy.

According to the 2025 World Oil Outlook of OPEC, oil demand is projected to rise from 103.7 million barrels per day in 2024 to 116.5 mb/d by 2045 and peaking at around 123 mb/d by 2050, an 18.6 per cent increase over 26 years.

It also noted the need for continued investments in various segments of the sector to meet this demand.

It noted that of the total investment requirement, upstream operations, including exploration and production, are expected to gulp the lion’s share at $14.9tn, or $574bn per year, as producers scramble to ramp up supply. Midstream and downstream investments will require $1.3tn and $2tn, respectively.

“Cumulative oil-related investment requirements to meet projected demand are assessed at $18.2tn over the period between 2025 and 2050.

“This is marginally higher than projected in the WOO 2024, as despite the outlook period being one year shorter, this Outlook has also seen long-term oil demand revised upwards, and liquids supply has followed.

“Total upstream investment requirements make up the bulk of the needed capital expenditure, now projected at $14.9tn, or $574bn per annum. Downstream and midstream investment requirements are projected at $2tn and $1.3tn, respectively,” the report said.

OPEC Secretary-General, Haitham Al Ghais, said continued investments are essential to guarantee future energy security and affordability, especially in the Global South.

“There is no peak oil demand on the horizon,” Al Ghais declared in the report’s foreword. “Efforts to rapidly phase out fossil fuels are unrealistic and disregard energy security, affordability, and socio-economic realities of billions still lacking basic energy access,” he said.

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Oil & Gas

FG Declares End to Dormant Fields on Oil Production

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By David Torough, Abuja

In a renewed push to meet its OPEC production quota and 2025 budgetary targets, the Federal Government yesterday declared an end to the era where oil companies acquire field licenses and leave them dormant.

The government warned that it would no longer tolerate operators lacking the technical and financial capacity to develop oil fields, stressing that such licenses would be withdrawn.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri issued the warning at the ongoing 2025 Nigeria Oil and Gas Energy Week in Abuja.

Lokpobiri said the government was determined to maximize oil production by ensuring that only serious investors retain access to Nigeria’s hydrocarbon resources.

The conference had the theme: “Accelerating Energy Progress Through Investment, Global Partnerships and Innovation”.

Lokobiri stated that, “In our ongoing drive to boost national oil production, the Federal Government remains resolute in ensuring that maximum value is derived from upstream assets currently held by operators.

“This objective has taken on greater urgency as global financing for oil and gas projects continues to tighten, making it increasingly difficult for all operators to secure the capital needed to develop these assets.

“It is no longer acceptable for critical national resources to remain in the hands of companies that lack the technical or financial capacity to optimize them or worse, those who use such licenses merely as a lever to access scarce capital, only to divert it to unrelated ventures.

“Our oil and gas industry has witnessed far too many cautionary tales of this nature, and we must now draw a clear line”.

He said the government has engaged an international consultant to evaluate the 273 fees and rates faced by oil companies in the country to align them with international best practices.

Also, the Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo said Nigeria had proven gas reserves of over 200 trillion cubic feet, yet value would only be created when resources were developed and utilised.

Ekpo said that through the Decade of Gas initiative, the country was focused on translating its vast gas wealth into tangible socio-economic benefits.

This, he said, included driving industrialisation, expanding power generation, increasing domestic Liquefied Petroleum Gas (LPG) usage, deepening gas-to-transport adoption, and growing gas export capacity.

Group Chief Executive Officer of NNPC Ltd, Engr. Bashir Bayo Ojulari disclosed that the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline has successfully crossed the River Niger, boosting the hope of the project’s completion by Q4 2025.

Ojulari, who described the development as a significant milestone, said the feat was achieved through effective and innovative contract reengineering and industry collaboration.

He also disclosed that for the first time in a long while, the nation enjoyed 100% crude oil pipelines availability throughout June 2025.

He said the feat which was possible through the industry-wide security interventions led by the NNPC helped to boost crude oil production.

He however called for more investments to boost production, adding that NNPC Ltd has been able to turn the narrative around by consistently meeting its cash-call obligations to Joint Venture operations.

He said the Petroleum Industry Act (PIA) has placed NNPC Ltd in a good position to live up to its responsibility of leading the industry in financing projects.

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