Petrol landing cost now N180 per litre, says Kachikwu

The landing cost of Premium Motor Spirit, also known as petrol, is N35 higher than the pump price of N145 per litre, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said on Tuesday.

Kachikwu said the rise in global crude oil prices after the 2016 hike in petrol price brought back subsidy.

Recalling the experience of 2016, when the government increased petrol price from N86.5 to N145 after months of severe scarcity, he described fuel subsidy as an emotive issue.

“You have very positive argument that says, ‘Why is this happening; let’s get it out.’ Once you do it, the streets get flooded by protesters. You have five or six or 10 days of no activity in the country. So, any attempt to remove the subsidy must be very well-managed,” the minister said on the NTA Good Morning Nigeria programme, monitored by our correspondent.

He noted that in 2016, the government wrote to the Nigeria Labour Congress and all the trade unions, adding that meetings were held with the security apparatus.

Kachikwu said, “Even when there was a consensus on how we were going to do it, we still had an issue at the very tail end of the moment; NUPENG and PENGASSAN supported but, of course, the other members of the trade unions pulled out.

“Eventually, thankfully, Nigerians saw through what we were trying to do and let it happen. And thank God that happened at the time because when you look at the gap today, the landing cost is about N180 per litre and sale price is N145. Imagine if it (pump price) was N90-something; we will literally be a bankrupt country.”

The minister added, “The point I am making is that anything you are going to do on subsidy requires a very efficient management of information – getting everybody who are stakeholders to tie into it.

“Should we deal with the removal of subsidy? I was gung-ho when I assumed this position that there was no way I was going to tolerate a subsidy regime at the time in 2015 of about N1.2tn-N1.3tn. There was just no way; we didn’t have the capacity to continue to pay.”

“So, I convinced the President that this needed to happen; thankfully, he listened, he agreed and we did. Now, we then had over-recovery period for quite a while and then we went into this upswing in prices that has now taken us again into under-recovery.”

The minister noted that the government had not paid marketers all the outstanding subsidy arrears.

He said, “I think, first and foremost, we need to find a way of fixing refineries quickly, whether it is government-funded or whatever – my preference is always private sector funding.

“I think the labour union has never really said they would not be supportive of an attempt to take away this subsidy element; the union has always said, ‘If you are doing it, show me what you [will] do with those new receipts of income. Two, what do you do with the refineries?’ Therefore, we need to address those to even get their buy-in.

“Secondly, we need to segregate between those who need subsidy and those who don’t; you will find that 80 per cent or more of those who get subsidy today do not need it. There is nothing necessarily bad with some element of subsidy if it is well-managed and is very little, and if the private sector can take it away completely; that is fantastic. That is the most ideal situation.”

The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country for about two years after private oil marketers withdrew from the importation of the product, bears the burden of subsidising the product.

As of March 20, 2018, when the international benchmark price for oil (Brent) was around $66 per barrel, the expected open market price of petrol, according to data obtained from the Petroleum Products Pricing Regulatory Agency, was around N189 per litre. The agency has not released any data since then.

The Group Managing Director, NNPC, on December 23, 2017, said the Federal Government had been resisting intense pressure to increase the pump price of petrol, noting that the landing cost of the commodity was N171.4 per litre as of December 22, 2017 when oil price was around $64 per barrel.

N15bn Green Bond To Finance Agric, Power, Health and Water Sectors – Minister of Finance

FIN MINISTER PRESS BRIEFING @ WORLD BANK OOA. Minister of Finance, Ms. Zainab Ahmed (M) Flanked by the CBN Governor, Mr. Godwin Emefiele and Minister of Budget and National Planning, Senator Udoma Udo Udoma during a press Brief after a successful outing at the Spring Meeting 2019 of the IMF and Wolrd Banking in Washington DC
….as Udoma lobbies IFC on funding critical infrastructure
The Minister of Finance, Zainab Shamsuna Ahmed, Sunday, at the just concluded 2019 Spring Meetings of the World Bank Group (WBG), and International Monetary Fund (IMF), in Washington DC, United States of America, USA, disclosed that the Federal Government is set to issue a second N15 billion Green Bond to finance agriculture, power, health and water resources sectors of the economy before end of 2019.
This was made known by the Minister in a statement signed by the Special Adviser to the Minister of Finance on Media and Communications, Mr Paul Ella Abechi, during a media briefing.
According to her while speaking on climate issues said following Nigeria’s endorsement of the Coalition Principles as one of the funding members it became the first SSA country to issue a green bond in December (N10.97 billion) for the financing of solar.
She said: “In view of our efforts as Finance ministers who play a key role in steering the economy and managing risks, including from climate change, climate finance, we were invited to join the coalition of climate Finance Ministers a coalition of Finance Ministers with long experience with climate actions and are well aligned with the Principles of the Coalition.
“Nigeria endorsed the Coalition Principles as one of the founding members. Recall, we were the first SSA country to issue a green bond in December (N10.97 billion) for the financing of solar and we are currently in the process of issuing a second green bond N15 billion later this year to finance various sectors in agriculture, power, health and water resources.”
On bilateral issues she explained that, “We also had some bilateral meetings. The delegation met with the Director, Africa Department of IMF where we updated the Fund on not only developments in the Nigerian economy but also our commitment to fully implement the EGRP.
“The IMF also promised to assist us in the area of liquidity management and share lessons and experiences on countries where the energy subsidies were successfully managed.”
The minister in her address highlighted government’s effort on human capital development following earlier concerns raised on the position Nigeria had as 157 out of 189 globally, which was worrisome.
“You will recall that at the Bali meetings when the Human capital project was released, many of us were concerned that Nigeria was placed 157 out of 189 and I did promise that we would go back home and address this issue, I am happy to report that we used this Spring meetings to show case what the government is doing in this important area.
“We have set up an inter-ministerial working group with representatives of the State Governors and are currently piloting some initiatives in health, education and of course you are all aware of the social safety nets programs of the Federal Government where we have 15 million people already on the register. The WBG was pleased with our efforts and promised to offer some assistance”, she said.
She further stated that the Nigerian delegation at the Spring Meetings also met with the World Bank Power Sector team and discussed the way forward on the Proposed $1 billion Nigeria Performance Based Loan (PBL).
“We agreed to bring relevant MDAs together to ensure that we advance this operation in a timely manner. We will also discuss the Country Portfolio Performance of Nigeria which currently stands at to $9.8 billion with the Nigerian Country team at the World Bank and how we could manage the portfolio for optimum results”, she explained.
According to her at a meeting with the US treasury at the President Emergency Plan Aids Relief (PEPFAR) round-table where they discussed developments with respect to HIV financing, which she said, “I spoke about the HlV-specific government measures and interventions, and our initiative on the Basic Healthcare Provision Fund (BHCPF) to ensure the most efficient ways of utilizing health resources.
“The Fund ensures that one per cent of the Consolidated Revenue Fund, CRF, along with contributions from donor grants, is set aside to fund the basic health care needs of Nigerians, with focus on primary health care and called for assistance in the area of generation and management of data.”
She further told the media that during her participation in the Governors Consultative Council (GCC) meeting of the African Development Bank wherein they continued the discussion of the proposal for a seventh General Capital Increase (GCl-Vll) which started in December 2018 in Rome, Italy.
Speaking on the outcome of this crucial meeting she said, “Governors discussed a number of strategic questions around the comparative advantage of the AfDB Group within Africa’s Development landscape, its strategic focus, complementarily between the ADB and the ADF and its medium term plans to strengthen its delivery capacity.
“Governors also discussed the financial scenarios and measures to ensure financial sustainability. Governors examined what a capital increase look like for the ADB and for Africa and agreed that discussion should continue. We expect to finalize in October 2019.”
Meanwhile, in a related development, one of the Nigerian delegates to the Springs Meetings, the Minister of Budget &National Planning, Senator Udoma Udo Udoma, during the media briefing on outcomes of meetings attended also spoke on efforts made to lobby the International Finance Corporation (IFC) to fund critical infrastructure in Nigeria and other issues of national importance.
“In the course of my meeting with officials of the International Finance Corporation (IFC), I asked for their support for our efforts to leverage private sector capital to fund critical infrastructure in Nigeria. As you know, Nigeria requires private sector capital to bridge the country’s infrastructure gap – which is critical to achieving the objectives of the ERGP.
“At the State of the African Region, discussions centred on the role of regional cooperation in tackling fragility in Africa. A major takeaway was the need to pay attention to women empowerment and education of the girl child as these have positive implications in dealing with fragility and reducing conflicts. As you know, investing in our people and the issue of girl-child education are some of the objectives of the ERGP”, Udoma added.
FIN MINISTER PRESS BRIEFING @ WORLD BANK 3. L-R; CBN Governor, Mr. Godwin Emefiele, Minister of Finance, Ms. Zainab Ahmed, Minister of Budget and National Planning, Senator Udoma Udo Udoma, Permanent Secretary, Federal Ministry of Finance, Dr. Mahmoud Isa-Dutse and Director General Debt Management Office (DMO) Ms. Ms Patience Oniha during a press Brief after a successful outing at the Spring Meeting 2019 of the IMF and Wolrd Banking in Washington DC
FIN MINISTER PRESS BRIEFING @ WORLD BANK 3A. L-R; CBN Governor, Mr. Godwin Emefiele, Minister of Finance, Ms. Zainab Ahmed, Minister of Budget and National Planning, Senator Udoma Udo Udoma, Permanent Secretary, Federal Ministry of Finance, Dr. Mahmoud Isa-Dutse and Director General Debt Management Office (DMO) Ms. Ms Patience Oniha during a press Brief after a successful outing at the Spring Meeting 2019 of the IMF and Wolrd Banking in Washington DC
FIN MINISTER PRESS BRIEFING @ WORLD BANK 4. L-R; CBN Governor, Mr. Godwin Emefiele, Minister of Finance, Ms. Zainab Ahmed and Minister of Budget and National Planning, Senator Udoma Udo Udoma during a press Brief after a successful outing at the Spring Meeting 2019 of the IMF and Wolrd Banking in Washington DC
Fed Govt pays $1.5b cash call arrears

NNPCThe Group General Manager (GMD), Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, yesterday said the corporation has paid $1.5billion out of the $5billion cash call exit to Joint Venture (JV).

He said the Joint Venture Cash Call exit settlement was negotiated for 2016 , adding that the state-run oil firm also championed indigenous cash exit, self- funding. Baru said so far, over $1.5billion out of the $5.1billion cash call arrears to date has been paid.

The development, according to him, has not only restored the confidence of International Oil Companies (IOCs), JV partners in the country, it has also led to reserves growth and improved oil production.

Represented by the Chief Operating Officer at NNPC, Mr. Bello Rabiu at the 12th Annual International Conference of the Nigerian Association for Energy Economics (NAEE),  in Abuja, Baru said: “In 2018, which was the second year in the roll, we concluded the fiscal year without any cash call arrears.”

The theme of the conference was: Energy Access and Efficiency Imperatives  for Sustainable Development in Emerging Economies.

Baru said  the development resulted in the corporation not recording any cash call arrear last year.

Meanwhile, NAEE President, Prof. Wumi Iledare, who had at the weekend advised Nigeria to heed the advice of the International Monetary Fund (IMF) to stop oil subsidy, said it was to forewarn the country of retrogression.

He said: “In my opinion, benefits from petrol subsidy of over 40 years compare to the cost are not comparable.  I stand to be corrected that the cost to the economy of petroleum subsidy is significantly higher to benefits. Subsidy is a gorilla to the Nigeria economy and something has to be done. Otherwise, Venezuala is knocking at the door and it is not a good experience.”

Baru said in the last year, Nigeria’s national average daily crude oil production stood at about 2.019 million barrels.

This volume, according to him,  translates to an increase of nine per cent above the 2017 average of 1.86 million barrels and comes as significant improvement from the unimpressive production levels recorded on my assumption of office in July, 2016.

To underline this, Baru said the the NPDC last year posted a production growth of 52 per cent compared to 2017, from an average of 108mbod in 2017 to 165mbod in 2018.

Commenting on petrol supply, the NNPC chief said the corporation was able to arrest the petrol scarcity that attended the rumoured plan to increase pump price by last Friday,  as the corporation flooded the retail outlets nationwide with the product.

Tin Can receives 213 vessels

Tin CanThe Port Manager, Tin-Can Island Port (TCIP), Lagos, Emmanuel Akporherhe, has said the port received 213 ships with 6.77 million tonnes of goods in the first quarter of the year.

He made this known while welcoming the board members of the Nigerian Ports Authority (NPA), led by its Chairman, Emmanuel Adesoye, last Friday.

The Tin-Can Island Port was inagurated on October 11, 1977, to address the increase in the volume of imports and exports brought about by the oil boom in the 70s, and the post-civil war reconstruction era.

Urging the board to support the port with more funds to enable it carry out some renovations, Akporherhe commended the efforts of the Managing Director, Ms Hadiza Bala-Usman and her team, in drawing the Federal Government’s attention to the plight of users of the Oshodi-Apapa-Oworonshoki Expressway, which he noted was critical to the port business.

Responding, Adesoye said the NPA board visited Lagos ports to assess the impact of the traffic gridlock on port operations. “The solution to the gridlock is currently being addressed although there are few roads and there is also the need to create more roads,” Adesoye said.

He assured that when the railway system becomes operational, together with the concrete road construction of Mile 2–Tin-Can Road– Oworonshoki Road, the problem of gridlock on ports access roads would be a thing of the past.

He also praised the introduction of barges at the Tin-Can Port, Ikorodu Lighter Terminal and Kirikiri Lighter Terminal, saying it was reducing pressure on ports access roads. According to him, the availability of an operational rail system and functional barges would ease the incessant gridlock to a large extent if not completely.

Adesoye said that the Federal and Lagos State Governments had commenced the construction of Lekki Deep seaport to enable bigger vessels call at the port.

Other places visited during the tour were, JosepDam Ports Service Nigeria Ltd. ENL Consortium, Apapa Bulk Terminal, Five Star Logistics, Flour Mills of Nigeria Limited, and APM Terminal.

However, at the APM Terminal, the NPA board members were not allowed in by the company.  An official of the firm at the entrance  said to nobody in particular: “we were not informed of their coming so how are we to know they will be here?”

PTML Customs makes N36.7b

PTMLThe Ports Terminal Multiservices Limited (PTML) Command of the Nigeria Customs Service made N36,728,799,903 in the first quarter of the year.

The collected figure is 43 per cent higher than the N25,656,118,181 recorded between January and March 2018 by the command.

According to a statement made available by the Customs Public Relations Officer for the Command, Mohammed Yakubu, it shows a difference of N11,072,681,722 between last first quarter 2018 and 2019 collections.

A breakdown of the monthly collections, according to the statement, indicates that N14,850,154,616 was collected in January 2019, which is 49 per cent higher than N9,967,751,491 collected same period in 2018.

In February 2019 the command collected N10,024,673,259 which is 38 per cent higher than N7,267,306,206 collected in February 2018.

In March, N11,853,972,028 was collected. The March figure is 41 percent higher than N8,421,060,484  collected same period last year.

Yakubu said the increase in revenue was due to higher cargo throughput and diligence on the part of the command’s operatives.

Coca-Cola: PPP key to realising MDGs

Coca-Cola:  PPP key to realising MDGsCoca-Cola Company yesterday said private public partnership (PPP) for sustainable impact remained crucial to the realisation of the Sustainable Development Goals (SDGs) of the United Nations (UN) in the country.

The Director, Public Affairs and Communications, Coca-Cola West Africa Business Unit, Clem Ugorji, who spoke at the Federal Medical Centre (FMC), Ebute Metta, Lagos during the donation of medical equipment, said such intervention will not only promote mother/child health but will reduce drastically their mortality rates.

Ugorji said the intervention named, Safe Birth Initiative (SBI), in conjunction with a United States (U.S.)-based group, MedShare International, included the provision of critical medical equipment in the delivery room, training of para-medical engineers to ensure that machines responded to emergencies by providing the tools and upgrading their skills; resuscitate broken down machines; and advocacy to educate mothers.

He said 13 other hospitals will benefit from the initiative and expressed gratitude to the Minister of Health, Prof Isaac Adewole and the Senior Special Assistant to the President on SDGs, Princess Adejoke Orelope-Adefulire for her patriotic role in getting the initiative onboard.

Also speaking the Chief Medical Director, FMC, Ebute Metta, Dr Adedamola Dada, said SBI will not only promote access but will also reduce the mother/infant mortality rate in the country. He said though information about the project came a little late, he nonetheless fought hard and commended the motherly role of Mrs Orelope-Adefulire who passionately supported the initiative which he said was needs-driven.

He said SBI did not just dump two conatainer load of medical equipment valued at $5000,000 each, he said personnel were trained, adding that 21 babies have been treated in the incubators provided by SBI while 321 babies and mothers have been brought safely.

Oil prices dip over production cut deal fear

Despite signs of continued tightness in supply, oil prices dropped early yesterday on some profit taking and a Russian minister suggesting that Russia and Organisation of Petroleum Exporting Countries (OPEC) could abandon the production cut deal.

Early yesterday,  WTI Crude was down 0.77 percent at $63.40 while Brent Crude was trading down 0.61 per cent at $71.11.

Last week was the sixth straight week of gains amid tightening supplies due to OPEC and Russia’s production cuts, the collapse of Venezuelan production, and fighting in Libya which could disrupt the African nation’s oil industry again.

Libya’s oil production is still under threat from renewed fighting between warring armed groups, and the situation could become as bad as it was during the 2011 civil war, the National Oil Corporation’s chairman, Mustafa Sanalla, told the Financial Times in an interview last week.

ABCON seeks radical power sector reforms, business growth

Image result for Association of Bureaux De Change Operators of NigeriaThe Association of Bureaux De Change Operators of Nigeria has called for radical implementation of the power sector reform programme to ensure access to stable electricity supply for households and businesses.

The association made this call in its Quarterly Economic Report for the first quarter of 2019.

It noted that Nigeria’s score of 35 in terms of ease of getting electricity, as indicated by the World Bank Ease of Doing Business report, was lower than the average for sub-Saharan Africa, and much lower than other comparable middle-income countries, with South Africa having  a score of 63 and India having  a score of 85.

It stressed that access to stable electricity was one of the key challenges and constraints for doing business in Nigeria and hence, a critical area of focus for the government in order to sustain the ongoing economic recovery.

ABCON stated, “Weighing on the emergence of Nigeria from a recession in 2017, the country’s continued economic recovery will be slow, according to a new economic analysis. However, the analysis showed, labour-intensive sectors remained weak, which contributed to an increase in the rate of unemployment and underemployment throughout 2018 into Q1 2019. Level of poverty is also believed to have increased notwithstanding the exit from recession.

“The reviews have identified the power sector as a critical area that government should focus attention to sustain the economic recovery. With the electoral victory of the incumbent government, ABCON review is recommending attention in the following sectors for full recovery from the recent recession; radical implementation of the power sector reform programme to ensure access to stable electricity supply for businesses; and comprehensive diversification of the economy.”

Financial literacy: SEC intensifies campaign, seeks increased market participation

The Securities and Exchange Commission has expressed its readiness to strengthen its collaboration with other regulators in the financial sector on the financial literacy campaign.

This, the commission said, would increase participation of investors in the nation’s capital market.

SEC said in a statement that it aimed to ensure that Nigerians, both in the urban and rural areas, were effectively sensitised on the benefits of financial literacy, which would, in turn, lead to an improvement in the economy.

The Director, Market Development Department, SEC, Mr Edward Okolo, during an advocacy visit by the Financial Literacy Technical Committee to the National Insurance Commission, in Abuja, said the commission sought to further strengthen collaboration with NAICOM to pursue financial literacy awareness in the market.

He described the insurance industry as one of the veritable tools of raising money in the market, stressing the need to explore avenues of enlightening states on insurance during the SEC’s regular enlightenment campaigns.

Okolo said, “As we market the capital market, NAICOM can also market insurance products during such campaigns. This collaboration will further strengthen our base and strengthen the financial side of the economy.

“Our sustenance is going to be based on how we can strengthen the market and introduce new products.”

A member of the committee, Mr Omagbitse Barrow, said more attention needed to be paid to financial literacy for it to be used as a fulcrum to deepen the quality of participation and create more value for the industries.

He said, “We want to continue to have more co-operation with a unified front to drive financial literacy. When that happens, the market will respond appropriately.”

The Director, Inspection, NAICOM, Mr Barineka Thompson, said NAICOM was happy to collaborate with SEC, adding that the commission would mobilise its representation from the industry to further enhance the scope of interaction.

Nigerian Breweries to close N15bn commercial paper issuance

Nigerian Breweries Plc has said it will close its N15bn commercial paper programme this week.

The company opened the issuance of the commercial papers on Thursday last week in a bid to support its short-term funding requirements.

According to a statement obtained from the Nigerian Stock Exchange, the company is offering 11.59 per cent and 14.43 per cent yield on its 90- and 182-day commercial paper, respectively.

According to Afrinvest Securities Limited, the offer for the series 1 and 2 commercial papers, which opened on Thursday, will last for a week and close on Thursday, April 18, while the settlement date will be April 23.

The Series 1 commercial paper has a tenor of 90 days, an effective yield of 11.59 per cent, a discount rate of 11.268 per cent and would mature on July 22.

The Series 2 commercial paper has a tenor of 182 days, an effective yield of 14.43 per cent, a discount of 13.46 per cent and would mature on October 22.

The commercial papers, which were awarded Aa rating by Agusto & Co Limited and AA rating by Global Credit Ratings Co, have a minimum subscription amount of N5m and in multiples of N1,000 thereafter.

The statement read in part, “Following a successful run of the company’s first N100bn commercial paper programme, which ran from 2015 to 2018, the board of directors approved a new programme in July 2018.

“The first CP programme helped the company to reduce its overall funding costs as well as gave non-equity investors an opportunity to invest in the company.

“The second programme, which has commenced, will run for three years till March 2022 and will support the cost management initiatives of the company, complement the traditional sources of financing and provide an opportunity for non-equity investors to invest in the company.”

It added that the CPs, would after issuance be listed on the FMDQ OTC Securities Exchange to make it possible for investors to trade in them.

The company said the financial advisers for the issuance were Stanbic IBTC Capital Limited, FBN Quest Merchant Bank Limited and FCMB Capital Markets Limited.