Posts in category: General Article

The Nigeria Deposit Insurance Corporation (NDIC), has said it has disbursed 86 per cent of the total insured deposits to customers of failed banks, including Heritage Bank, an increase from the 82.36 per cent reported just a week ago.

Managing director and chief executive of the corporation, Hassan Bello, while speaking at a retreat for the House Committee on Insurance and Actuarial Matters of the Federal House of Representatives in Lagos noted that the 14 per cent unpaid had been due to accounts without bank verification number (BVN) or had post no debit (PND) on them.

Stating that the Corporation recognizes the importance of timely reimbursement to depositors in maintaining financial stability, he explained that BVN of depositors had been sourced from the Nigeria Inter Bank Settlement System (NIBSS) to enable it make payments.

“The Corporation had reassessed its depositor payment methodology with a view to adopting a different approach that will ensure prompt payments to depositors. This was tested in the recent payment to depositors of Heritage bank in-liquidation. It is instructive to mention that, the Corporation using the BVN of depositors obtained from NIBSS was able to access alternate accounts of customers and commenced payment to depositors within a record time of four days.

“This was quite a significant milestone when compared with a historical period that usually takes longer time. Cumulatively, as at today, the NDIC has paid 86 per cent of the total insured deposits. The Corporation is making efforts to complete the payments of the remaining 14 per cent of the insured deposits.

“Some of the insured depositors constituting these remaining 14 per cent are customers whose accounts have post no debit (PND) instructions by courts or regulatory authorities. Others are those with KYC limitations on the maximum lodgement per day, customers with no BVN attached to their accounts or have not come forward for verification to provide alternate accounts in other banks to enable the Corporation to pay them.

“Notwithstanding the success recorded in payment of insured sums to depositors of the defunct heritage bank, the Corporation is mindful of the uninsured depositors and we have therefore initiated the process of debt recovery and realisation of investments and physical assets of the bank to ensure timely reimbursement of uninsured deposits.

“It is pertinent to remind us here that upon payoff of both insured and uninsured deposits, the Corporation will subsequently proceed with the payment of creditors and others in accordance with priority of claim as provided in the extant law.

Meanwhile, Chairman of the House Committee on Insurance and Actuarial Matters, Hon. Ahmadu Usman Jaha, emphasised the critical need for robust financial stability measures, citing global economic shifts and unforeseen crisis.

Speaking at the event themed “Strengthening Financial Stability and Deposit Insurance Frameworks for Economic Resilience”, Jaha emphasised the need for collaboration between governmental bodies, financial institutions, and stakeholders to ensure that regulations are not only comprehensive but also adaptable to evolving economic conditions.

“In recent years, we witnessed various challenges that threatened the resilience of our financial systems-global economic shifts, regulatory challenges, and the impacts of unforeseen crises. These challenges underscore the critical need for robust deposit insurance frameworks that protect depositors and foster confidence in our banking systems.

“A resilient economy is one that can withstand shocks and continue to thrive. As we work to fortify our deposit insurance schemes, we must also address broader economic factors that contribute to resilience. This includes promoting financial literacy among the populace, encouraging savings, and ensuring that our citizens understand the importance of deposit insurance. More so, we must leverage technology to improve our systems, making them more resilient against potential disruptions if we must strengthen our financial stability” he said.

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The director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dayo Mobereola, has restated the Agency’s commitment to the Nigerian Seafarers Development Programme (NSDP).

The NIMASA DG stated that the 296 NSDP beneficiaries at Centurion University, India will be given adequate capacity development to acquire quality training and qualify as Seafarers employable globally.

He, however, described media reports claiming that the Agency plans to withdraw the NSDP cadets from the Centurion University India as false, adding that the Agency is only carrying out due diligence on the existing MoU to align the processes in the best interest of the Nigerian students.

According to the DG, the agency is working assiduously to close all identified gaps in the existing Memorandum of Understanding before proceeding to the next stage.

“We are not recalling any NSDP beneficiary from Centurion University.
We are only working to close out all identified gaps in the existing Memorandum of Understanding before proceeding to the next stage.

“A situation where the Agency entered into a contractual agreement with Springdale Academy of Maritime Education and Training (SAMET) with agreed courses and timelines only to be faced with additional course duration and an alien programme by the agent. SAMET, unilaterally converting the programme without the consent of the Agency as prescribed by the MoU may not be in the best interest of the students,” he stated.

Speaking further, he said, “there were issues of non-accreditation of one of institution as at the time of the execution of MoU, change of course from Marine engineering to Mechanical engineering without recourse to the Agency, preparing the grounds for additional years of studies and uncertainties for the students, raising issues related to funding, and the various third parties arrangements without duly informing the Agency.”

The NIMASA DG also noted that the Management of NIMASA is aware of a sponsored media campaign of calumny against the NIMASA Management stating that it will not deter NIMASA from doing the right thing.

“We are aware of orchestrated media campaigns and petitions against the agency reviewing the existing arrangement. We will not give in to blackmail as the safety and wellbeing of our students are paramount.”

LEADERSHIP reports that the Nigerian Seafarers Development Programme was introduced in 2009 to develop capacity by training young Nigerians as seafarers and bridge the gap of dearth of seafarers globally.

Nigerian youths are trained in specialised courses such as Marine Engineering, Nautical Sciences and Nautical Surveys amongst others, to ensure they qualify as Seafarers and are employable globally.

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A gas station attendant pumps fuel into a customer’s car at the NNPC Mega petrol station in Abuja, Nigeria March 19, 2020. REUTERS/Afolabi Sotunde

Nigerian authorities are facing a resurgence of petrol smuggling as price disparities between Nigeria and its neighbours widen. Currently, petrol sells for approximately N701 per litre in Nigeria, while prices soar to around N1,787 per litre in countries like Benin and Cameroon.

This significant difference has incentivised smugglers to divert fuel across borders, leading to an estimated daily consumption of 67 million litres, much of which is believed to be smuggled.

Though the federal government had adamantly insisted that petrol subsidy was gone, NNPC on Monday, admitted that handling shortfalls in Premium Motor Spirit (PMS) importation costs, with underpayments on petrol projected to hit N6.8 trillion by December this year.

Speaking on resurgence of petrol smuggling, minister of state for Petroleum Resources (Oil), Heineken Lokpobiri has linked the lingering petrol smuggling to the disparity in fuel prices between Nigeria and its neighbouring countries.

The minister stated that the significantly lower price of PMS in Nigeria compared to other West African countries has made smuggling an almost unavoidable consequence.

Speaking at the 3rd edition of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Energy and Labour Summit yesterday in Abuja, Lokpobiri said that despite the presence of law enforcement agencies, the economic incentive for smugglers remains high due to this price difference.

Discussing the summit’s theme, “The Future of Nigeria’s Oil and Gas Industry: Energy Mix, Energy Security, Artificial Intelligence, Divestment and Crude Oil Theft,” the minister emphasised the persistent challenges of energy security, oil smuggling and the need for greater investment in the sector.
He also stressed that Nigeria’s role in the energy security of West Africa remains crucial, and without increased oil production and strategic policy implementation, the region could face severe energy challenges.

“You agree with me that whatever happens in Nigeria affects the entire West African subcontinent, that is why whenever PMS is imported to Nigeria, it finds its way to the whole of West Africa, that is why smuggling cannot stop.

\So when smugglers take their products outside the country, even if you put all the policemen, all the customs men on the road, they are Nigerians, you and I know where the problem is”, he said.
Lokpobiri noted that while Nigeria is committed to the global energy transition and has taken gas as its transition fuel, the country cannot abandon its reliance on fossil fuels.
He argued that fossil fuels would remain a significant part of the energy mix for the foreseeable future, serving as a crucial source of revenue needed to fund the transition to greener energy sources.

But NNPC insisted that it was not paying subsidy, but only interfacing with the federal government to manage petrol importation and sorting out differentials when necessary.

Chief financial officer of the national oil company, Umar Ajiya, said yesterday in Abuja, “In the last eight or nine years, this company or corporation, as it was, has not paid anybody a dime or N1 as subsidy. No one has been paid a kobo by the NNPC in the name of subsidy and no marketer has received money from us by way of subsidy

“What has been happening is that we have been importing PMS or petrol, which is landing at a certain cost price, and the government is telling us to sell at half price. The difference between that landing price and pump price is what we call shortfall or you call it subsidy.

“And the deal is between the federation and ourselves to reconcile and sometimes they give us money, sometimes we make up.”

A recent report however showed that in addition, the national oil company told the president it will not be able to remit taxes and royalties to the federation account for now because of the subsidy payments, which it termed “subsidy shortfall/FX differential”.

The report said the cumulative petrol subsidy bill from August 2023 will hit N6.884 trillion by December 2024 — leaving NNPCL unable to remit N3.987 trillion in taxes and royalties to the federation account.

In his opening remarks, PENGASSAN President, Comrade Festus Osifo stated that Nigeria’s oil and gas industry was at a critical juncture, with unprecedented opportunities and challenges on the horizon.

He called for a diversified energy mix that includes renewable sources and innovative technologies,while stressing the need for robust energy security measures to ensure the nation’s stability and progress.

The PENGASSAN president also addressed the growing role of Artificial intelligence (AI) in the industry, suggesting that its integration could revolutionise efficiency and competitiveness.

On crude oil theft, which Osifo described as a “scourge” threatening the industry and national integrity, he reaffirmed PENGASSAN’s commitment to combating this issue through collaboration with stakeholders, enhanced security, and technological innovation.

The summit is expected to provide a framework for policy recommendations that could shape the economic future of Nigeria, particularly in light of recent government policies that have significantly impacted the Naira’s value and the cost of imported commodities.

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The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has officially launched a National Single Window (NSW) project for the facilitation of trade in Nigeria.

In his opening address, the minister underscored the transformative potential of the single window in enhancing Nigeria’s trade facilitation and driving economic growth.

He emphasised that this initiative is a key pillar in the federal government’s strategy to improve trade and customs processes, reduce bottlenecks, and increase transparency within the nation’s trade environment.
To ensure the effective implementation and financial management of the project, the chairman of the Federal Inland Revenue Service, Dr Zacch Adedeji, and the Nigerian Sovereign Investment Authority have been designated as the project’s implementing agencies.

The project secretariat will be housed within the FIRS, providing a central hub for coordination and oversight, the ministry of finance said in a statement that was issued on Wednesday.

Other key stakeholders from various government agencies, including the Nigerian Ports Authority (NPA), the Nigerian Customs Service (NCS), the Nigerian Civil Aviation Authority (NCAA), and the National Agency for Food and Drug Administration and Control (NAFDAC) are actively participating in the workshop.

Their collaboration is crucial to ensuring the successful implementation of the national single window, which is a critical component of President Tinubu’s broader economic reforms.

The three-day workshop will conclude on Thursday with a detailed action plan, outlining the next steps for the project and the timelines for its full implementation.

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Nigeria’s minister of finance and coordinating minister of the economy Wale Edun, chairman of the Nigerian Economic Summit Group (NESG) Olayinka Yusuf and other stakeholders from the public and private sectors have agreed on the need to engage in comprehensive reforms to address the nation’s economic challenges.

They made their remarks on the Nigerian economy at a national economic dialogue that was organised by the NESG themed “Nigeria’s Economic Future: 25 Years of Democracy and Beyond.” This dialogue is as a prelude to the 30th Economic Summit, scheduled to be held in October.
The finance minister underscored the pivotal role of ongoing macroeconomic reforms in shaping Nigeria’s economic future.

Reflecting on 25 years of democracy, the Honourable Minister highlighted the need for continuous progress in governance and the expansion of economic opportunities. He pointed to recent initiatives, such as the introduction of the first US dollar domestic bond, designed to attract Nigerian savings from abroad and fuel domestic economic growth.

Edun acknowledged existing challenges but reaffirmed the government’s dedication to curbing food inflation and improving food security. He also stressed the value of consistent strategic planning and the importance of learning from successful international models.

In his welcome remarks, NESG’s Yusuf highlighted the challenges impeding Nigeria’s economic growth, such as poor governance, poverty, unemployment, and insecurity. He emphasised that overcoming these obstacles requires a concerted effort from all stakeholders expressing gratitude to NESG for their crucial role in facilitating these vital economic discussions and reiterated President Tinubu’s unwavering commitment to advancing comprehensive economic reforms.

Among the distinguished attendees are the Chief of staff to the President, Femi Gbajabiamila, the Minister of Budget and Economic Planning Atiku Bagudu and Chairman of the All Progressives Congress, Abdullahi Ganduje.

On his part, chief of staff to President Tinubu, Mr. Femi Gbajabiamila stressed on the need for collaboration between the government, private sector and well-meaning Nigerians in the quest to solve multifarious challenges confronting the country, saying that the government cannot solve these challenges alone.

“Of course, it is the responsibility of the Federal, States and local Government Areas to find and implement necessary answers to the problems that confront us today. The government alone cannot define the future of any nation. All hands must be on deck. We just need to keep on pushing and pushing to solve these challenges.

“For us to have an economic future, it has to be predicated on democracy. The two are siamese twins.

“Nigeria belongs to us all. We have the responsibility to build it and leave a legacy which we will be proud of. It can only be achieved through joint efforts,” Gbajabiamila said.

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Ibom Air, on Tuesday, announced the arrival of its second Airbus A220-300 aircraft, which arrived in Nigeria via Murtala Muhammed International Airport, Lagos, on August 10, 2024.

The shareholder, the Akwa Ibom state government, formally received the aircraft at Victor Attah International Airport, Uyo, Akwa Ibom State.

This acquisition aligns with Ibom Air’s strategic goal of rapidly increasing capacity and expanding its route network. The Airbus A220-300, celebrated for its fuel efficiency, environmental sustainability, and passenger comfort, will enable Ibom Air to increase flight frequencies on existing routes and expand to new destinations.

While giving his welcome remark, the chairman of Ibom Air, Imoabasi Jacob, saluted the resilience and doggedness of Ibom’s management and the strong support of Pastor Umo Eno.

Also speaking, the governor of Akwa Ibom State, Pastor Umo Eno, expressed his enthusiasm for this development.

“The arrival of our second Airbus A220 reiterates the state’s unwavering commitment to advancing our aviation sector. This addition aligns with our strategic vision for Ibom Air and supports the economic growth and development of Akwa Ibom State by enhancing air travel and connectivity, creating job opportunities, and boosting tourism.”

Ibom Air’s CEO, Mfon Udom, emphasised the significance of this addition to the fleet. “We are thrilled to welcome our second wholly owned Airbus A220. This aircraft will significantly boost our capacity in response to the growing service demand. A special thanks to the Nigerian financial institutions who continue to partner with Ibom Air, especially Fidelity Bank and Union Bank. “We appreciate the tremendous support shown to us by our valued customers recently as we bore through flight disruption. We are committed to delivering remarkable improvements moving forward.

The executive director of Fidelity Bank, Kevin Ugwuoke,  who represented the CEO, remarked on behalf of the consortium of financiers: “We share a common passion for Akwa Ibom state, and we are delighted to join them on this journey.”

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Minister of Budget and Economic Planning Senator Abubakar Bagudu has said Nigeria needs to attract more resources than it has to fund its development agenda.

For this to happen, the nation must develop a sound financial system with integrity, he said.

He spoke at the management retreat of the Nigerian Financial Intelligence Unit in Abuja on Monday.

“Our Agenda 2050, a statement of our national aspiration, requires that we invest at least 100 billion dollars annually to achieve a GDP per capita of $33,000 or more by 2050,” he said, adding, “We are nowhere near that.”

He said the current financing level is smaller than that but explained that President Bola Tinubu’s administration had undertaken bold and courageous economic reforms to boost its revenue.

“However, we still need to be where we should be; we are not near the kind of flows we expect,” the minister noted.

To buttress his point, he cited the $20 billion federal budget size, which he said was too small compared with other countries like Brazil and Indonesia, which have similar population sizes and have $750 billion and $210 billion budgets, respectively.

The minister explained that Nigeria needs a sound financial system to attract domestic and foreign investments to finance its development plan.

“The plan is to use private sector or capital market money to fund the plan. Because of that, we need confidence, integrity, and soundness in our financial system,” he pointed out, “The rating agencies could be more generous with us, maybe not only with us but with all countries.”

He stated that this was the role of the NFIU, which he said had performed creditably but needed to communicate its activities more effectively for the public to acknowledge.

The minister said, “Our credit rating should improve. We have taken measures similar to those in countries that have achieved significant increases in credit ratings. We have established and committed institutions, particularly the NFIU, and should benefit from them.

“Communication matters, so we reinforce and punish wrongdoing while drawing attention to our great work to enhance the integrity and soundness of our financial assistance.”

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The collective Deposit Money Banks (DMBs) in the country had total assets of N121 trillion as at the end of 2023 financial year, which is equivalent to half of the national gross domestic product(GDP).

This is even as Nigerian banks and other financial services accounted for 4.6 per cent of GDP meaning that, the nation’s financial institutions account for approximately N5 for every N100 generated nationally in 2023, up from about N4 in 2022.

Speaking at the official launching of the State of Enterprise (SOE) 2024 Report held on Monday in Victoria Island, Lagos, the chief executive officer(CEO) of EnterpriseNGR, Obi Ibekwe, revealing the report published by her firm, acknowledged the significantly supportive role of the Banking sub-sector in facilitating necessary funds to support businesses and the productive sector., disclosing that, the sub-sector’s role in tax revenue was equally commendable, ranking third out of the 23 economic sectors, in income tax and VAT generation to the government coffer.

“Nigeria’s Financial and Professional Services (FPS) sector recorded improved performance in 2023. The sector had significant positive impacts on people, businesses and the economy across the nine classified sub-sectors: Banking, Insurance, Capital Markets, Asset Management, Pensions, Non-interest Finance, FinTech, Professional Services and Sustainable Finance,” she pointed out.

Adding that the Insurance sub-sector saw impressive momentum in 2023, with gross premium written reaching a N1 trillion mark, though this growth was driven by a regulatory intervention, such as increased motor insurance rates, she added that, the the sub-sector paid 36 per cent more claims than in 2022, an indication that the Insurance sub-sector is rising to its responsibility to protect policyholders against adverse financial and economic consequences.

While Capital Markets experienced significant expansion, with the All Share Index (ASI) increasing by 46 per cent, according to the report, the EnterpriseNGR CEO stated that, the last time the markets achieved something close to this was in the wake of the pandemic in 2020.

To her, “the market capitalisation jumped 47% to about N41 trillion, facilitating substantial trading transactions and business activities. When you look at performance by sector, the Oil & Gas sector emerged as the growth leader (recording a phenomenal 126 per cent gain). The performance of the Oil & Gas sector can be linked to policy changes such as the suspension of subsidies.”

Closely linked to Capital Markets is the Asset Management sub-sector, which drives much of the activity in the markets, she said, adding that the sub-sector, known for managing assets, is also laying the foundation for national future growth through collective investments. The total net asset value (NAV) for all collective investment schemes soared by almost 50% in 2023, and the number of registered mutual funds increased to 144 from 133 in 2022. This growth highlights the growing confidence in the markets, she noted.

Acknowledging that the pensions sub-sector was one of Nigeria’s regulatory success stories, steadily building a secure future for millions of employees, she said, with over 10 million contributors, the sub-sector has accumulated over N18 trillion in investments, with 65 per cent of this invested in government securities, noting that, in 2023, the sub-sector had paid over N400 billion in retirement benefits, and about N36 billion to contributors temporarily out of jobs, in 2023.

“The sub-sector boasts a market size worth N2.5 trillion, growing by N1 trillion in a year. Strong demand for ethical investments is driving numbers in the sub- sector. A key example is the issuance of a N150 billion sovereign sukuk in 2023, which was oversubscribed by more than 400 per cent. The sub-sector is aligning financial practices with ethical values to grow national investments,” she emphasised.

Earlier, the director of Policy and Public Affairs, Lami Adekola, while speaking on this report, noted that, the Nigeria’s FinTech sub-sector is about inclusion, accessibility, and empowerment, saying, with digital payments and lending on the rise, FinTech is connecting millions of Nigerians to financial services, helping them meet their everyday needs at reduced costs compared to traditional banks.

Mobile money operators, according to him, processed 140 per cent more transaction values N46.6 trillion in 2023 compared to N19.4 trillion in 2022 while Personal loans saw a significant rise of 19 per cent, increasing to N2.28 trillion from N1.92 trillion between the second and third quarters of 2023.

“Professional Services comprising firms such as accountants, management consultants, and legal advisors, played a crucial role in helping businesses navigate challenges and seize opportunities. In 2023, their contributions to the economy were substantial, supporting various industries and playing a critical role in economic integration, revenue generation, risks and talent management. The professional service firms are a significant part of the Professional, Scientific and Technical Services.

“Finally, the Sustainable Finance sub-sector continues to attract growing global interest, with the Nigerian market participating steadily. Nigeria’s green bond stock is valued at N47.8 billion, with a 69% share in corporate green bonds and the remaining 31 per cent in Federal Government of Nigeria (FGN) green bonds. The steady growth in Sustainable finance reflects Nigeria’s commitment to sustainable development, which is about investing in a future where economic growth and environmental stewardship go hand in hand,” he emphasised.

The performance of the FPS sub-sectors in 2023, according to him, underscores the pivotal role of FPS in Nigeria’s economy, particularly its contributions to governments, businesses and people, even as he said, FPS sector has the potential to drive Nigeria’s transformation into Africa’s premier financial centre.

EnterpriseNGR is a dynamic, member-led organisation at the forefront of championing the advancement of the Nigerian Financial and Professional Services (FPS) sector. With a steadfast commitment to fostering a conducive policy environment, EnterpriseNGR advocates the growth and development of all the FPS sub-sectors which are: Banking, Insurance, Capital Markets, Asset Management, Pensions, Non-interest Finance, FinTech, Professional Services (Legal Services, Accounting and Management Consulting), and Sustainable Finance, to position Nigeria as Africa’s premier financial centre.

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…Warn of economic, contractual risks of regulatory force

As Nigeria’s oil sector grapples with the challenge of inadequate crude production supply to domestic refineries, the Independent Petroleum Producers Group (IPPG) has used the federal government not to compel them to meet this need in the short term.

Warning of potential economic fallout of the mandatory supply of crude oil to local refineries, the IPPG urged the NNPC to redirect its 445,000 barrels per day (bpd) allocated crude oil volumes to the Dangote Refinery and other local refineries to alleviate the ongoing crude supply shortage, which is affecting the availability of petroleum products across various regions of Nigeria.

In a letter dated August 16, 2024, addressed to  the NUPRC chief executive, Gbenga Komolafe, IPPG chairman Abdulrazak Isa warned that failure to comply with these guidelines could jeopardise production levels, increase operational costs, and worsen Nigeria’s credit rating, ultimately impacting the economy.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) mandated producers to allocate crude to domestic markets under the Domestic Crude Oil Supply Obligations (DCSO), raising concerns about contractual conflicts and the viability of existing agreements with international buyers.

The producers emphasised that using this allocation could enhance local supply and reduce reliance on imports, amid ongoing challenges in the oil market and declining production rates.

Isa noted that some IPPG members already own or supply crude oil to local refineries but emphasised that the NNPC is well-positioned to address the crude supply shortage faced by local refiners by utilising its statutory crude allocation to meet domestic consumption needs.

It read: “Historically, NNPC has always had an intervention crude oil volume (445kbopd) meant to satisfy the nation’s domestic consumption. This volume has always been used, under various swap mechanisms, to import refined products for domestic consumption.

“Since there is now domestic refining capacity to meet consumption, this dedicated volume should be reserved for all domestic refineries under a price hedge mechanism that can be provided by a suitable financial institution such as Afrexim Bank,’’ he stated.

Isa, however, maintained that “Any national production above this allocated volume should be treated strictly as export volumes, adhering to the willing buyer, willing seller framework of the international market especially since the refiners will need to export excess products that surpass domestic demand thus boosting FX earnings.’’

The group voiced concerns about recent developments, such as the domestic crude oil refining requirements and the crude oil production forecast for the second half of 2024, as announced by the NUPRC. They also raised issues with the request made to all producing companies to submit their monthly crude oil supply quotations to licensed refineries in Nigeria.

In particular, the IPPG highlighted that some of its members had received letters from the Dangote Refinery requesting crude supply nominations for October. The group criticised this approach, arguing that it imposed an obligation on them, which conflicted with the willing-buyer, willing-seller principle outlined in the Petroleum Industry Act of 2021.

The group emphasised that efforts to enhance the country’s petroleum value chain should adhere to legal frameworks and existing obligations.

They expressed confidence that all stakeholders could reach a mutually beneficial solution without compromising existing commercial agreements, economic interests, or business models within the oil and gas sector.

“While we fully support and commend the efforts of Nigerian entrepreneurs to enhance domestic refining capacity, it is important that no private sector business is unduly pressured into arrangements that may effectively subsidise another within the oil and gas value chain under any guise whatsoever.

“Under this willing-buyer, willing-seller framework, it is essential for refiners to negotiate and execute long-term crude oil Sales and Purchase Agreements with producers and their marketing agents. These agreements should follow industry best practices, with typical tenures ranging from one to five years,’’ the IPPG chairman said.

He mentioned that several participants had been issued allocation letters from the NUPRC for supplying certain quantities of crude oil to the domestic market in the second half of 2024.

He also expressed worries about the possible effects on the economy, particularly regarding foreign exchange earnings from royalties and taxes.

The group noted, “We understand that the current allocation methodology appears to be based on a matrix of production forecasts by producers, issued technical allowable rates as well as crude oil requirements of domestic refineries, rather than actual local consumption needs.

“This raises significant concerns as it suggests that allocations are being determined based on the demands of refiners, which may exceed what is needed for domestic consumption.

“Such an approach could lead to inefficiencies and unfairly disadvantage producers. Therefore, refineries with excess capacity beyond local consumption mustn’t exploit the Domestic Crude Oil Supply Obligations to the detriment of oil producers and other stakeholders, including the government.’’

Isa called for transparency in how the allocations to oil producers were determined and requested NUPRC to provide clear details on the allocation criteria and methodology, while he sought an opportunity for IPPG to make input into the production forecast to ensure it accurately reflects operational realities.

They propose solutions including long-term sales agreements and a transparent allocation process to enhance domestic refining capabilities and attract foreign investment.

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Pinnacle Oil and Gas FZE firmly denies any association with alleged Maltese cargo, emphasising compliance with Nigerian regulations on product quality and safety.

Managing director/CEO, Bob Dickerman in a statement said. “In a recent publication, our terminal was associated with a cargo that originated in Malta.

Pinnacle has never accepted any product into our tanks that does not meet all specifications of Nigerian regulations, and we never will.

“At our terminals, the regulators oversee quality control of all imported products and have the product inspected by independent, qualified inspectors before issuing a discharge certificate.

“We cannot and will not ever be involved in the distribution of products that do not meet all specifications of Nigerian regulatory agencies.”

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