Refiners get crude-for-naira deal amid fuel scarcity, SIM blockade fury

• N10.4b daily smuggling, PMS debt compound woes
• Price soars to N1,800 at black market as petrol stations shut down
• Commuters stranded as price soars by 60%
• Telecoms subscribers storm telco outlets, operators overwhelmed
• Subscribers call out NCC, NIMC as NIN linkage channels fail

Two days before the scheduled ‘End Bad Governance’ protest, crowded fuel stations and overwhelmed telecommunication service centres have offered themselves as what appeals like a testing ground for the fury of the masses.

For one, the resurgence of fuel smuggling, which has led to about N10.4 billion daily losses and the inability of the Nigerian National Petroleum Company Limited (NNPCL) to pay oil traders lingering debt may prolong the current scarcity of petrol nationwide.

Already, prices of the product have risen to about N1,800 in Lagos and Abuja at the black market as motorists queue for hours at the few dispensing fuel stations even as supply dries up in most outlets.

This comes as the Federal Executive Council (FEC) yesterday, adopted a fixed exchange rate in a move to sell crude oil in naira to Dangote and other domestic refineries. The government said the NNPCL would supply four cargoes while 450,000 barrels daily of the country’s crude oil would be made available to domestic refineries.

The fuel crisis, which is hampering the movement of people and goods across the country, has led to a sharp increase (over 100 per cent in some cases) increase in the cost of transportation, a crisis stakeholders fear would worsen the already high cost of living in coming days if left unchecked.

While Nigeria’s daily PMS consumption dropped to about 40 million litres, according to the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), last year when the government removed subsidy on the product, the return of the scheme and smuggling to neighbouring countries, pushed daily consumption to 65 million litres per day. The Nigerian Customs Service (NCS) said the rate of smuggling of petrol has become alarming.

The sharp rise in the acclaimed daily consumption suggests about 25 million litres are being smuggled to neighbouring countries daily by criminals who are leveraging the West African market arbitrage.

With the landing cost of PMS in the country, according to the Major Energies Marketers Association of Nigeria (MEMAN), now estimated at N1,117 per litre against the N700 average price, the Federal Government is currently paying over N417 subsidy on every litre of PMS consumed in the country or smuggled. The development means that the country is subsidising the consumption of neighbouring countries to the tune of N10.4 billion daily.
The Minister of Finance, Wale Edun, said last month that the subsidy on petrol stood at N5.4 trillion in 2024. There are indications that some traders are already pulling out of the market (supply to NNPCL) over a debt overhang of $6 billion.

The development, according to Reuters, has drastically reduced the level of PMS coming into Nigeria for June and July. NNPCL is yet to pay traders for some January imports. The backlog stands between $4 billion to $5 billion with fresh orders increasing the figures daily. Under contract terms, NNPC is supposed to pay within 90 days of delivery.

Reuters said Nigeria’s tenders to buy PMS in June and July were smaller at about 850,000 tonnes in July instead of the typical one million tonnes as in the case of the previous months.

The Guardian learnt that a product cargo is on Nigerian waters but cannot be discharged to NNPC as the trader insists on collecting part of its outstanding debt before unloading products.

NNPCL described the problem as one related to logistics.  The spokesman of the company, Olufemi Soneye, denied that the company is not indebted to traders as he challenged Reuters to name the traders that the company owed.

Sources at MEMAN had told The Guardian that their tank firms are drying up as most of the marketers are out of stock.

In Lagos, public transportation costs soared by at least 60 per cent during the peak period yesterday with many commuters stranded at bus terminals.

Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa Rafsanjani, called for comprehensive measures to address the issues at hand, allowing citizens to freely express their opinions on government actions, tasked the police force on protection and ensuring the protest doesn’t escalate due to actions of those with malicious intentions.

He mentioned that inflation, unemployment, corruption and insecurity are critical challenges that need urgent attention, noting that the integrity of the country’s institutions is in question as it is imperative to restore trust and confidence from citizens.

“In a democratic setting, every individual should have the right to express their views on government performance. President Bola Tinubu, himself a product of protest, should understand and respect this right.

“CISLAC stands firmly with the citizens in their right to peaceful protest and calls on the government to act with urgency and responsibility in addressing the concerns raised by Nigerians and also called on governments at both states and national levels to release those who have been arrested for expressing their desire to join peaceful protest for a positive change,” he said.

On his part, a senior advocate of Nigeria (SAN), Dr Olisa Agbakoba, said the optimal crude oil production and sale is the only short-term economic solution.

He stressed that President Bola Tinubu does not have enough funds in the treasury to meet the many needs of the over 200 million Nigerians. Hence, he urged him to take a cue from how the former president, Olusegun Obasanjo, resolved national issues.

“President Tinubu should ramp up crude oil production to at least 2.4 million barrels a day, pay debts and deploy available funds to meet national needs. If this simple fiscal process is sustained, Nigeria will be out of this desperate situation within six months; optimal crude oil production is our way out.

“Obasanjo had a clear vision of how to raise revenue. This was from the optimal production of crude oil. The revenue from crude oil was fully maximised. Crude oil daily production was at maximum capacity. Funds from sales of crude propped the Naira value to the dollar. The Government was able to get things done without borrowing but using crude oil revenue. President Tinubu must reverse the trend by maximising crude oil outputs, removing the international oil companies from the control of our hydrocarbons’ revenue, paying down debts and hedging the naira against the dollar with crude oil dollars,” he said.

The Special Adviser to the President on Information and Publicity, Bayo Onanuga, tweeted that the new FX arrangement is to ensure the stability of the pump price of refined fuel.

While the Central Bank of Nigeria (CBN) had stated that it has discontinued multiple exchange rates in the country, Tinubu in a statement said: “The exchange rate will be fixed for the duration of this transaction.

“Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game-changing intervention will eliminate the need for international letters of credit, further saving the country of dollar payments.”

MEANWHILE, the tense situation ahead of the August 1 ‘End Bad Governance’ protest is also being fuelled by the blockade of telephone lines of subscribers who are said to have failed to complete the NIN-SIM linkage.

Though not yet on the streets, Nigerians have turned petrol stations and telecoms service outlets across the country to protest grounds, lamenting what has befallen them.

Painfully, Nigerians have had to queue for fuel at filling stations and also at telecoms outlets to get their SIMs reactivated after their lines were barred by the telcos.

The operators were in the race to meet the July 31, 2024 deadline set by the Nigerian Communications Commission (NCC) to bar all subscribers whose NINs have not been verified.

Despite the extension of the deadline from the initial April 15, 2024, to July 31, the latest actions by MTN, Airtel, Globacom and 9mobile, indicate that many subscribers still have irregularities with their NIN-SIM link.

As of April, the Association of Licensed Telecoms Operators of Nigeria (ALTON) said over 40 million lines had been barred. But last week, many telephone lines were disconnected, compounding the frustrations of angry Nigerians.

With the hope of getting reprieve at the service outlets, many subscribers defied the lack of vehicles on the road due to fuel scarcity and trekked down to various telecoms outlets, only to encounter slow processes on the part of officials, some customers were not attended to and others in their thousands were denied access into some of these centres.

The Guardian checks across the country showed that as early as 6:30 am, subscribers had besieged these outlets. From Lagos to Ondo, Abuja to Kaduna, Kwara to Enugu, Akwa Ibom to Delta, telecoms operators’ officials were overwhelmed by the crowds, who later became unruly and violent.

To avoid further implosion, NCC, in a statement, yesterday, said it directed operators to reactivate all lines that were disconnected over the weekend.

A video, which circulated online, showed subscribers, who became unruly and violent at one of the MTN offices situated at Festac Town, Lagos, destroying the gates and walls of the outlets. The officials of these outlets had to runway

The Guardian saw large crowds at MTN offices at Osolo Way and Fatai Atere Way. The same situation was noticed at the Glo office along Airport Road, Ikeja. 9mobile office at Okota/Cele Express was not spared as well.
A subscriber at the MTN office, Bilikis Adekunle, said she woke up yesterday (Sunday) to discover that she had been barred. “I remembered that I linked the SIM to NIN in March, and to be barred again baffled me. What happened to the linkage I did before? You can see the crowd here. I came here as early as 7:30am and I still met over 40 people on the ground. Something urgent needs to be done; we cannot go through this harrowing experience again.”

At Glo office, Emeka Adigwe complained that the link provided by the telecoms firm to re-link appeared not working. “I have tried it several times before coming here this morning, but it didn’t work. So many things are wrong with the process. How many times are we going to do this exercise? I am just worried about Nigeria….simple things we cannot get right!”
An official of 9mobile, who pleaded anonymity, said the process is becoming overwhelming. “From last Thursday till this morning, we have attended to thousands of subscribers, who came to link and unbar their telephone lines. The most painful thing is that customers have been mandated to do this long before now, but in a typical Nigerian manner, we wait until the last minute. 9mobile have reached out to affected subscribers through calls and bulk messages since the beginning of July, especially for the last phase of the exercise, telephone users didn’t show up until now.”

Recall that in December 2023, the NCC directed all telecommunications operators to undertake full network barring of all SIMs that have failed to submit their National Identity Numbers (NIN) on or before 28 February 2024.

Likewise, customers that have submitted their NINs, but remain unverified were to be barred on 15 April 2024. This deadline was, however, shifted to July 31, 2024. Further, guidelines were issued whereby no customer can have more than four active SIMs and all such excess SIMs must be barred by March 29, 2024.
This directive is part of the ongoing Federal Government NIN-SIM harmonization exercise requiring all subscribers to provide valid NIN information to update SIM registration records.

Speaking on the issue, the National President of the National Association of Telecoms Subscribers (NATCOMs) Adeolu Ogunbanjo, said that barring of lines was not done to frustrate anybody or group.

Ogunbanjo said that there was a recent announcement on the issue but many subscribers did not take heed to it.

“The number of NINs that are not properly done is alarming, and when you ask the affected persons, they will say I went to a kiosk somewhere or something similar to do my NIN registration.

“Many do not use their real names, some go to fake centres to do their NIN registration. The bottom line is that proper registration was not done. I implore everybody to do the needful and go to recognised NIN centres,” he said.