Old Notes: Kogi, Kaduna, Zamfara accuse Malami, Emefiele of violating S’Court order
Three northern states, Kogi, Kaduna and Zamfara, have initiated contempt proceedings against the Attorney-General of the Federation and Minister of Justice, Mr Abubakar Malami, SAN, at the Supreme Court, following his alleged refusal to comply with the order that extended the deadline for the use of the old N200, N500 and N1000 banknotes as valid legal tenders.
Equally joined in the contempt action was the governor of the Central Bank of Nigeria, CBN, Mr Godwin Emefiele.
The three states, in the two sets of Form 48 they lodged before the apex court, warned both Malami and Emefiele of the consequence of their continued disobedience to the interim order the court made on February 6, which halted the full implementation of the new monetary policy that was introduced by the CBN.
Specifically, Form 48, which has already been served on both the AGF and the CBN Governor, read: “Take notice that unless you obey the direction contained in the attached Order of the Supreme Court of Nigeria delivered on 3rd day of February 2023, you will be guilty of contempt of Court and will be liable to be committed to prison.”
Vanguard learned that the contempt action by the three states who had originally gone to court to set-aside the initial February 10 deadline the CBN gave for usage of the old Naira banknotes, will form part of processes the Supreme Court will consider on Wednesday.
Basically, a Form 48 (notice of consequence of disobedience of court order), is followed with a Form 49, should the party it was served on continue to disregard the court order alleged to have been flouted.
Upon receipt of a Form 49, the alleged Contemnors would be compelled to show cause why they should not be committed to prison for disobeying a subsisting court order.
It will be recalled that the three states had on February 15 when proceedings resumed on the legal dispute sorrounding the Naira swap policy, drew attention of the apex court to the fact that FG had through the CBN, banned the use of the old N200, N500 and N1000 banknotes, despite the ex-parte order that restrained it from doing so.
Counsel to the plaintiffs, Mr. AbdulHakeem Mustapha, SAN, while accusing FG of engaging in “Executive recklessness”, urged the apex court to extend the interim order.
Mustapha, SAN, further indicated that he had filed an affidavit to establish how the express order of the Supreme Court was disobeyed by FG.
However, FG’s lawyer, Mr. Kanu Agabi, SAN, urged the apex court to disregard the allegation by counsel to the plaintiffs, insisting that it was based on “mere rumour”.
Before adjourning the case till Wednesday, the seven-member panel of the apex court led by Justice Inyang Okoro, stressed that parties, having submitted themselves before the court, ought not to take any action that would affect the subject matter of the suit.
Even though only the AGF was initially cited as the sole defendant in the matter, the panel however granted applications that Edo and Bayelsa states filed to be allowed to join the suit to support FG as co-plaintiffs.
Likewise, the court allowed seven states- Lagos, Cross River, Ogun, Ekiti, Ondo, Sokoto and President Buhari’s home state, Katsina- to also join the case to challenge the new monetary policy.
On the other hand, Rivers, Kano and Jigawa states filed separate suits to vacate the cash withdrawal limits the CBN allowed for corporate entities and individuals, respectively.
The court held that all the suits would be consolidated for a hearing.
Meanwhile, barely 24 hours after the court proceeding, President Muhammadu Bihari made a nationwide broadcast and restated the ban on all the old banknotes except N200 which he okayed to remain a valid legal tender till April 10.
Aggrieved by the action, the 10 states that are now plaintiffs in the suit marked: SC/CV/162/2023, re-approached the apex court with another process to invalidate the President’s directive on the old banknotes.
It will also be recalled that Malami had filed a Preliminary Objection to dismiss the suit, even as he contended that the Supreme Court lacked the requisite jurisdiction to entertain it.
Listing his grounds for challenging the power of the Supreme Court to intervene in the matter, Malami, accused the plaintiffs of opposing FG’s power, through its agency, the CBN, to withdraw old banknotes and introduce new ones.
According to him, “The Plaintiffs’ suit is about the power vested on the Central Bank of Nigeria by the Central Bank of Nigeria Act, 2007 to call in its Banknotes and introduce new ones.
“This suit as presently constituted falls under section 251(1)(a)(p)(q) & (r) of the Constitution (exclusive jurisdiction of the Federal High Court) by virtue of the subject matter and parties.
“The Claims or reliefs are not against the Federation, but the Federal Government and its Agency, the Central Bank of Nigeria.”
“The Federal Government of Nigeria is distinct from the Federation or the Federal Republic of Nigeria. The Plaintiffs have no grievance whatsoever against the Federation of Nigeria.
“This Suit has disclosed no dispute that invokes this Court’s original jurisdiction as constitutionally defined. This suit is an abuse of the judicial process.
Plaintiff has no locus standi to institute this action. The Plaintiffs have no reasonable cause of action against the Defendant”, Malami argued.
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Dangote, PH refineries, others won’t change fuel price – NNPCL
The local production of Premium Motor Spirit, otherwise known as petrol, by Dangote Refinery, Port Harcourt Refining Company and others in Nigeria is not going to change the pump price of the commodity, the Nigerian National Petroleum Company Limited has said.
The NNPCL’s Group Chief Executive Officer, Mele Kyari, who disclosed this during an interview on Arise television in Abuja on Thursday, stressed that the notion that petrol prices would reduce once the country starts domestic production was false.
Kyari confirmed that the Dangote Refinery, which was inaugurated on May 22, 2023, by former President Muhammadu Buhari, would start pushing out products by the end of July and early August.
He also stated that the Port Harcourt Refinery would be delivered by the end of the year, adding that the facility was expected to further boost local production of petrol.
But Kyari declared that despite the volume of petrol being expected from these facilities, the cost of the commodity would not reduce, regardless of the fact that the product was produced locally.
“There is a notion that if the product is processed locally, prices will reduce. Let me make it clear that it is not going to change anything. If you produce locally, the refineries will also input the cost of production and other things and it will be sold at the current price.
“There will also be no subsidy when local production starts because there is no cash-to-back subsidy, this country no longer has the resources to continue with subsidy,” Kyari stated.
Speaking on when the fuel queues being witnessed across the country would clear, during another interview on Channels TV, the NNPCL boss said the queues would not exceed Saturday.
“I don’t see it staying beyond another day or two, maximum. It can actually be on Saturday. We have supplies. The key trouble with the PMS system is supply, but I have supplies.
“There are over 810 million litres of PMS in depots, tanks and fuel stations across the country, so you don’t have the problem of transferring those from marine to land, you already have them on the ground,” he stated.
He validated the PMS pricing document for various states that trended on Wednesday on the internet, stating that the document was from the NNPCL.
“You have seen a document in the space out there. Every company does this. It is a marketing document. It was not a price announcing document, every company keeps this record and adjusts it appropriately on the basis of changing conditions in the market.
“So what you saw was just an internal company document that found its way into the internet. It is an NNPC document but it was not intended to be an announcement and is not an announcement, because it can change the next day,” Kyari stated.
On whether there was enough product in-country, he said, “Today I have 1.8 billion litres of PMS and that means that if we don’t do anything, I’ll have sufficient fuel for the next 30 days in my hands.
Kyari explained that the company had over 800 million litres of petrol on land, stored in filling stations, tank farms and depots, while its total stock for both marine and land stood at about 1.8 billion litres.
“But, of course, the way we supply is not this way, so we maintain this level of supply consistently. That means you will see the arrival of products every day so that you continue to maintain that level of safety.”
‘Subsidy not realistic’
Speaking to journalists after a meeting with the National Chairman of the All Progressives Congress, Senator Abdullahi Adamu, at the party secretariat in Abuja on Thursday, Kyari revealed that the administration of President Bola Tinubu had concluded arrangements to have one of the four refineries repaired and operating at an optimal level before the end of the year.
The NNPCL boss argued that it was no longer justifiable to continue subsidising the commodity given the high opportunity cost the Federal Government was suffering from funding it.
Kyari, who was received by the APC chairman and members of the National Working Committee at about 12.30 pm, confessed that the country could no longer sustain the expensive subsidy regime.
According to him, over 38 per cent of the total fuel distributed in the country was consumed by Lagos, Abuja, Kano and Rivers.
Kyari explained that following the hike in pump price and the resultant effect on commercial fare, the president was working out some palliative measures to ease the pains of Nigerians.
He also added that there was an ongoing process of rehabilitation to ensure one of the refineries was ready this year.
Kyari lamented that despite its N2.8tn indebtedness to the NNPCL, the Federal Government had yet to release funds for 2022 and 2023 subsidies.
He said, “There was a subsidy in 2022 but in 2023, not a single naira was provided for the purpose. And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8tn that the federation should have given back to the NNPC.
‘’For any company, when you have negative N2.8tn, there is no company in the whole of Africa that will lend to you. You cannot have receivables. The provision of subsidy is there but absolutely there is no funding for it. It means it is only on paper. It doesn’t exist.
“We can no longer bear it. If we continue, we will run into defaults and the default of NNPC is the default of Nigeria. Once NNPC goes into default and liquidity, it affects every borrowing done by the country, even the sub-nationals. Your lenders will come back to you and say your country can no longer pay.
‘’The only way you can stop this is to stop this conversation around subsidy. It is why Mr President announced that the subsidy is gone. In 24 hours, the bond market appreciated. It is nothing else other than the statement around subsidy and balancing of the apex market. These two elements are a major concern for every investor all over the world. Every partner that we have is worried about.’’
Kyari acknowledged that the price increase would trigger inflation, noting that the market forces would determine what happens subsequently.
He noted, “Before today, the average subsidy level was N400bn every month. There is nothing anybody can do about it. There is this common argument that the masses will suffer. I agree that once you increase prices of this proportion, as it has happened, it will have an impact on inflation. There is no doubt about it. The market determines what happens next. Even inflation in many countries goes up when you have economic indices become difficult.
“Mr President’s target is to have seven per cent growth of GDP. You cannot have it if you have this disruption in your demands and consumption pattern. Very many of us here have at least two cars in our houses including myself. When you buy fuel of 100 litres in an SUV, you are literally subsidising three litres with N100 for all of us.
‘’Even the consumption itself is clearly skewed in locations and states where the level of economic activities are higher than the others. It is very understandable and that is why people can afford it in Abuja, Lagos, Port Harcourt, and Kano. So over 38 per cent of the total fuel distributed in this country ends up in these places. All the other parts of the country suffer for it and you can see the relativity.’’
Kyari submitted that the price at which petrol was being sold now is the current market price of the commodity.
‘’The price you are seeing today at our stations is the current market price of the commodity and what this means is that prices in the market can go down at any time and the market will adjust itself. The beauty of this is that there will be a new entrance because oil marketing companies now will want to invest, they have been reluctant to come in because of the subsidy,’’ he stated.
With the latest development, the NNPCL chief said the market would regulate itself, adding that oil marketing companies could now import products or buy locally-produced ones and take them into the market and sell at commercial prices.
He added, ‘’You would see competition even with NNPCL, and by law, the company can’t do more than 30 per cent of the market going forward. So competition will surely come in and definitely, the market will regulate the price itself. It is an instantaneous price and in two weeks, you will see the adjustment that is happening in many jurisdictions.
‘’But ultimately, you would see changes in price downwards and that is very likely. Efficiency will come in and every lacuna in the sector will be taken out because of the new situation.
‘’The current price is not fixed and will surely change and we did it to announce various prices depending on our cost by location and by the realities around us knowing full well that the NNPCL is the single supplier of the market today and we are seeing that exit coming very quickly. There will be no monopoly and we will not continue to be the only supplier.’’
Meanwhile, the House of Representatives has called on the Federal Government to end subsidies on not just petrol but all petroleum products.
The House, however, urged the government to roll out palliatives and other measures to cushion the effects of the removal of the PMS subsidy on Nigerians.
These were part of the recommendations by the House Ad Hoc Committee on the Need to Investigate the Petroleum Products Subsidy Regime in Nigeria, which the lawmakers considered as a Committee of the Whole and adopted in plenary on Thursday.
Chairman of the committee, Ibrahim Aliyu, had laid the report, 11 months after the task was assigned to the panel.
The committee recommended that “the Federal Government should remove subsidies on all petroleum products.”
It also recommended that “the Federal Government should immediately design measures and palliatives to cushion the effects of the subsidy removal for Nigerians, effective from this year 2023, through the provision and procurement of Compressed Natural Gas buses as an alternative transport system with cheaper fuel consumption.”
The panel also said the government should introduce intermodal, regional and national transport systems to ease the mass movement of people across the country.
In addition, the committee recommended that the Nigerian Midstream and Downstream Petroleum Regulatory Commission should issue stricter and most appropriate regulations as provided in the Petroleum Industry Act to ensure that Nigerians were not short-changed through profiteering.
The lawmakers equally said the Revenue Mobilisation Allocation Committee should lead a reconciliation meeting between the NNPCL, Federal Inland Revenue Service, Joint Venture Contracts and the NMDPRC on the utilisation of their crude entitlements.
The report partly read, “With the total deregulation of the sector, all the agencies involved in crude lifting/security should have a representative with the Nigeria Navy as a lead agency to physically assess and document daily crude production and lifting;
“The committee also recommends that the Federal Government should, as a matter of urgency, liaise with the National Assembly to fashion out critical areas of economic development, in which the additional revenue from the proposed subsidy removal will be appropriately utilised.
“A further investigation, through a forensic audit by the Office of the Auditor General for the Federation, be made to ascertain whether the N413bn borrowed from the Central Bank of Nigeria for subsidy payments was refunded after the passage and assent of the 2015 budget as earlier approved by the President and the report of the Auditor General to be submitted to the House for further legislative action.
“With the subsidy removal, the Federal Government should forthwith suspend all Direct Sales Direct Purchase (oil swap) contracts. NNPCL should act by the provision of the PIA to ensure that the country is not sub-changed in both production, lifting and sales of crude.
The committee further recommended that the Nigeria Customs Service and the Weight and Measures Department of the Federal Ministry of Industry, Trade and Investment be equipped to ascertain the actual daily crude oil lifting from the country for proper checks and balances.
Another recommendation was that the Nigeria Extractive Industries Transparency Initiative Act, 2007, be amended by the National Assembly to be in tune with global best practices.
The panel further recommended that the National Assembly, especially the House standing or ad hoc committees in the 10th Assembly be saddled with such responsibility to conduct “a full-scale investigation on the defaulting oil companies and MDAs that have not met the expectations of the committee to ascertain their level of involvement or otherwise and further protect the commonwealth of the country.”
The House on June 29, 2022, resolved to investigate payments for subsidy on petroleum products, especially petrol, under the Muhammadu Buhari administration.
The Speaker of the House, Femi Gbajabiamila, had set up the panel whose probe covered 2017 to 2021, with the mandate to report back to the House within eight weeks for further legislative action.
The probe was based on a motion titled, ‘Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021,’ which was unanimously adopted after it was moved at plenary by a member of the House, Sergius Ogun.
In a related development, the Nigeria Labour Congress has dismissed reports that it would embark on a nationwide protest against the increase in the pump price of petrol.
In a statement on Thursday, signed by its head of information, Benson Upiah, the congress noted that it would keep the public abreast of its moves.
The union had demanded the reversal of the fuel pump price while a meeting between the labour leaders and the FG deadlocked on Wednesday.
But clarifying its position following speculations about its next move, the congress said, “In as much as we are outraged by this mindless price increase which is intended to bring untold hardship to ordinary Nigerians, we have no plan to start any action tomorrow (today).
“What we do have for now are organ meetings slated for tomorrow, Friday, June 2nd, 2023 to deliberate on the price issue. We promise to keep Nigerians informed on our next line of action after our meetings.’’
In reaction to the fuel price hike, the Edo Civil Society Organisations on Thursday blocked a section of the Benin/Lagos highway in protest against the subsidy removal.
The protest, which was held at different locations in the state, obstructed vehicular movements forcing commuters to trek long distances.
Naira exchanges at N464.67 to dollar
Naira remained unchanged on Thursday, exchanging at N464.67 to the dollar at the Investors and Exporters window.
The local currency did not change from its value on Wednesday, while the open indicative rate closed at N464.64 to the dollar on Thursday.
An exchange rate of N467 to the dollar was the highest rate recorded within the day’s trading before it settled at N464.67.
The naira sold for as low as 460 to the dollar within the day’s trading.
A total of $250.98 million was traded at Thursday’s official Investors and Exporters window.
CBN increases interest rate to 18.50%
The Central Bank of Nigeria (CBN) has again increased the monetary policy rate (MPR) by 0.50 per cent to 18.50 per cent.
The Governor of the CBN, Mr Godwin Emefiele, announced this interest rate hike on Wednesday while addressing newsmen in Abuja.
He said members of the team agreed to raise the benchmark interest rate to curb inflation.
The CBN governor said the committee considered a perennial scarcity of Premium Motor Spirit known as petrol, the 2023 general elections, continuous rise in energy prices, exchange rate pressure as well as continuous rise in insecurity.
He said committee members noted that the naira redesign has huge moderating factors to price development on cash.
Announcing the committee’s decision, Emefiele said, “MPC was of the view that although the inflation rate moderated marginally in December, the economy remained confronted with the risk of high inflation with adverse consequences on the general standards of living.
“Committee, therefore, decided to sustain the current stance of policy at this point in time to further rein in inflation aggressively.
“MPC voted to raise the MPR to 17.5%, retain the asymmetric at +100/-700 basis points around the corridor.”
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