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FUEL SCARCITY: Nigerian Airlines give 3 days to shut down, want rights to import jet fuel

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The effect of recent fuel scarcity in Nigeria is hitting harder on citizens of the West African country as its airline operators on Monday said they have only three more days to fly due to the high cost of aviation fuel.

The scarcity began in the first week of February 2022 when the Nigerian government says it found an unsafe quantity of methanol in Premium Motor Spirit  (PMS) imported into the country, and cited that as the reason for fuel shortage that has led to hard times for many Nigerians.

One of the airline operators, Mr Allen Onyema, the CEO of Air Peace, who spoke on behalf of the operators, said at a public hearing of ad hoc committee of the lower chamber of Nigeria’s legislature, the House of Representatives. The committee is investigating the scarcity of aviation fuel in Abuja, Nigeria’s capital.

Slamreportafrica.com reported last week the price of diesel has hit a record high at ₦625 per litre in filling stations after it jumped from ₦ 430 to ₦545 two days earlier. The product was sold for as low as ₦ 420 two weeks ago.

Diesel currently sells for ₦720 at the deports, the price is as high as ₦800 at some filling station in the country.

Onyema accused aviation fuel marketers of not speaking the truth about the actual landing cost of aviation fuel, adding that if drastic measures were not taken, the least air ticket would go for as high as N120,000.

He urged the House of Reps to give operators of airlines the license to import aviation fuel, saying this would reduce the unnecessary burden on the citizenry.

“What we are asking from the government is to give us the right to import aviation fuel. What others use in insuring one plane is what we use in insuring three planes in Nigeria, so the Nigeria airline is dead on arrival,” he said.

The Group Managing Director of the Nigeria National Petroleum Corporation (NNPC) Ltd, Mr Mele Kyari, said that it would consider granting licenses to operators of airlines to import aviation fuel.

Kyari also agreed that aviation fuel would now be sold at N500 per litre contrary to the current N670 per litre.

Meanwhile, Mr Ugbugo Ukoha, the Executive Director for Distribution System for Storage and Retailing Infrastructure in the Nigeria Midstream and Downstream Regulatory Authority, said that Nigeria had an excess supply of Aviation Turbine Kerosene (ATK).

He said the country had sufficient products that could go round, adding that the scarcity and the high cost remained the marketers’ challenge.

Committee reactions…

Hon. Ahmed Wase, the Deputy Speaker of the House of Reps, said that the committee was only after the fact, as it was poised to protect the interest of Nigerians.

“We are not willing to compromise what is in the interest of our country,” he said.

He, however, chided the marketers for speaking the language they did not understand in order to cover up some facts.

According to him, the marketers’ analyses are not correct based on the fact at the committee’s disposal.

He also queried why some government agencies would not be telling the truth about the scarcity and the high cost of aviation fuel, saying “we should be seen to protect the interest of Nigeria and not otherwise”.

He said that the committee would ensure that the right thing was done in the interest of the country, adding that the basic tenet of governance remained the welfare of the people.

Hon. Toby Okechukwu, the Minority leader of the House, however, raised questions on what determined the marketers prices and why they were hoarding the product.

Okechukwu said that such actions by marketers were bringing a lot of dysfunction to the country’s economy.

“If we are saying that the landing cost of aviation fuel is N450 from the Central Bank of Nigeria who approved it,” he said.

He also accused the Nigeria National Petroleum Corporation (NNPC) Ltd. of not knowing those managing the products.

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Nigeria receives $16bn investment from IOCs

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Heineken Lokpobiri, Nigeria’s Minister of State for Petroleum Resources (Oil), revealed on Monday that the country’s oil and gas industry had received approximately $16.6 billion in investments over the previous 12 months.

He gave updates while speaking in Abuja on the oil industry’s accomplishments since President Bola Tinubu took office on May 29, 2023.

Additionally, in a previous meeting with Olivier Le Peuch, the CEO of Schlumberger Limited, Lokpobiri disclosed that the Federal Government was about to finalize a $20 billion agreement to increase Nigeria’s oil and gas production.

The minister stated, “One of our main objectives has been to create an environment where investments can thrive,” when discussing the steps being taken to draw in investments. The absence of the Petroleum Industry Act and erratic policies had discouraged investment for more than ten years.

“Today, I am pleased to announce that our efforts have rekindled investor confidence in the sector. Notable examples include investments committed to the tune of $5bn and $10bn in deepwater offshore assets; and a $1.6bn investment commitment in oil and gas asset acquisition.

The very high global interest is noted in the ongoing bid round of assets coming online, arising from the recent roadshow activities in the United States and Europe.”

Additionally, Lokpobiri noted that since Tinubu took office, Nigeria has seen a rise in the output of crude oil.

“Our foremost achievement is the significant increase in production. When we took office, production was at approximately 1.1 million barrels per day, including condensates.

“Today, I am proud to report that we have increased our production to approximately 1.7 million barrels per day (inclusive of condensate). This increase is a testament to our relentless efforts to streamline operations and resolve conflict among stakeholders,” the oil minister stated.

Among the actions done to boost the output of crude oil, Lokpobiri mentioned that attempts were made to bring idle oil assets back into service.

To resolve industry conflicts and increase output, he added that ongoing conversations were being held with members of the Independent Petroleum Producers Group and multinational oil firms.

Lokpobiri added, “Resolutions of internal joint venture contracts feud between joint venture partners on critical production fields. Engaging local communities with critical assets running through them to protect the assets, all in a bid to decrease oil theft across the country.

“Consolidating existing security framework with private security firms and government security agencies for pipeline surveillance, which led to a sharp decline in crude oil theft and thus increased production for export.”

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Tax evasion trial of Binance executives postponed until June 14 by Nigerian court

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A Nigerian court Wednesday postponed the tax evasion case against Binance until next month, when the cryptocurrency exchange and two of its officials might potentially be charged, according to the judge.

Authorities were unable to bring U.S. citizen and Binance head of financial crime compliance Tigran Gambaryan to court, which caused the case to standstill. Gambaryan did not give a justification for missing the courtroom.

An Abuja court decided on Friday that Gambaryan, representing Binance, may go to trial in the tax evasion case. In May, Binance CEO Richard Teng charged that Nigeria was creating a hazardous precedent when its executives were invited to the nation and subsequently taken into custody as part of an anti-crypto campaign. The business is contesting the proceedings because it is accused of money laundering and tax evasion.

Four charges of tax evasion are brought against Binance and its executives, Gambaryan and Nadeem Anjarwalla, a British Kenyan who serves as Binance’s regional manager for Africa. One of the charges is failing to register for taxes with the Federal Inland Revenue Service of Nigeria.

Despite Anjarwalla’s March escape from detention, the lawsuit still lists him as “at large,” which might delay the trial because Nigerian law mandates that all parties must be served before the case can move forward, according to Chukwuka Ikwuazom, the attorney for Gambaryan.

Moses Ideho, a revenue service attorney, stated that Gambaryan should have been brought before the court by the Nigerian jail service and that he was unaware of the reason for his absence. The potential arraignment of Binance and Gambaryan has been postponed until June 14 by Judge Emeka Nwite.

The Economic and Financial Crimes Commission (EFCC), Nigeria’s anti-graft agency, has charged Binance and the executives with laundering over $35 million in addition to the tax evasion case. On Thursday, there will be a money laundering trial. In the wake of Gambaryan’s detention, Binance has declared that it is closely collaborating with Nigerian authorities.

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