May 22, 2018

Kerosene subsidy is back, as fuel queues may linger till May -Tunde Gboyega

Kerosene subsidy is back, as fuel queues may linger till May -Tunde Gboyega

SUBSIDY RETURNS ON KEROSENE & FUEL QUEUES MAY LINGER TILL MAY

Just when we though the era of fuel subsidy was over (boy did it take a while) after spending N2.859 trillion cumulatively on fuel subsidy since 2012, we finally said bye-bye, odabo, ka omesia, ban kwana, au revoir  in 2016. Guess who’s back?

Fortunately there is currently no subsidy on petrol as its expected open market price (EOMP) is N80.44 – which means at N86.00 its retails at a N5.56 surplus/litre. Kerosene however is markedly different as its EOMP is N83.81 – which means it retails at a subsidy of N0.81/litre. Based on NNPC figures, Nigeria’s average monthly consumption is 24.23m litres (up to Aug 2015). That means monthly subsidy on kerosene at this rate would be N19.63m monthly and N235.56m – yearly! Considering we spent N737 billion on petrol subsidy last year, this is paltry. I’m sorry but if it’s not up to N1 billion, I’m not losing sleep!

However, the fact that any sort of fuel subsidy has returned is worrisome, we sincerely hope that petrol is not next as Nigeria consumes an average of 363.26m litres monthly. Currently we are saving about N2.02billion on what used to be petrol subsidy, if for any reason this changes… things could get very messy quickly!

At some point, the dollar scarcity was likely to affect fuel supply, as both the Major Oil Marketers of Nigeria (MOMAN) and Independent Petroleum Marketers of Nigeria (IPMAN) which jointly own 22% of the import allocation of Premium Motor Spirit (PMS) (NNPC owns the remaining 78%) into the country have found it hard to source foreign exchange to pay for PMS imports.  The NNPC alone does not have enough vessels on ground to tackle the existing crisis and many depots which depend on the NNPC for replenishment have exhausted their stock.

This current scenario may unfortunately continue to May this year. Now add this to the fact that electricity supply is now extremely erratic (how will you power your generators?) and its gonna be a looooong two months!!

 

SWITZERLAND RETURNS $723M OF ABACHA LOOT IN 10 YEARS & RE-OPENS CONSULATE

The Swiss Government has so far returned a total of $723m (N142.43 billion) in funds stolen by the Abacha family over the last 10years. This figure excludes the $321m (N63.24 billion) it currently said it was planning to repatriate to Nigeria.

The details were contained in an agreement titled “Letter of Intent on the restitution of illegally acquired assets forfeited in Switzerland” signed in Abuja on March 8, 2016 by representatives of the Swiss Federal Council & the Nigerian Government i.e. the Swiss Head of Foreign Affairs – Mr. Didier Burkhalter and Nigeria’s Attorney-General & Minister of Justice – Mr. Abubakar Malami (SAN).

The assistance provided by the Swiss government is very laudable, maybe that’s why they decided to re-open their consulate in Nigeria after 55 years. They currently have representation via consulates in the two largest economies in Sub-Saharan Africa (SSA) i.e. South Africa and Nigeria. Despite having 35 companies operating in Nigeria and 282 nationals currently resident, trade volumes are low with Switzerland accounting for 0.8% of total exports and 0.4% of total imports in Nigeria. So quoting Lemar (the Naija-born British singer) I guess it’s time to grow. . . 

Now if memory serves me correctly, the 2016 budget estimates N380Billion as misappropriated funds recovery and others, this means we’ve only recovered 16.7% of our target (before you mention Dasuki-gate, how much have we actually recovered??) so far! Only N316.76 billion to go!   

But at least this government has had the political will to estimate what its anti-corruption drive should generate! So my question is… what happened to the N142.43 billion previously received over the past 10years? There was no mention of it (recovery of misappropriated funds) in the 2015 budget… so I’m going to assume… whatever was received… became supplementary income for the previous administration to spend on what it deemed expedient? (Now I’m sounding like a politician). Na waa ooo.

At least now we have a government that is a bit more transparent and accountable in terms of its income and expenditure profile…  It may have taken a while… but it’s a start… a very good start!

 

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