The report that the Nigerian Government has soft-pedalled on its initial plan to remove subsidy on petrol, setting aside its much-trumpeted Petroleum Industry Act (PIA) to continue paying about N4.6 trillion provided crude oil price hovers around $85 per barrel dominates the headlines of Nigerian newspapers on Tuesday.
The Guardian reports that with all things considered, the Federal Government, yesterday, soft-pedalled on its initial plan to remove subsidy on petrol, setting aside its much-trumpeted Petroleum Industry Act (PIA) to continue paying about N4.6 trillion provided crude oil price hovers around $85 per barrel.
The Guardian had exclusively reported last Friday that petrol may sell for N403 per litre, representing the current landing cost of the product, as against its current price of N165 from July 1, this year.
The Nigerian National Petroleum Corporation (NNPC) Limited had revealed that Nigeria consumes about 19.535 billion litres of petrol yearly, averaging 1.6 billion litres monthly. With about N241 now paid on every litre as subsidy, this brings yearly subsidy to about N4.6 trillion.
But in a reversal that may unsettle the petroleum industry, the Federal Government suspended indefinitely its planned fuel subsidy removal and will now amend the 2022 Appropriation Act to accommodate the new change to provide for subsidy payments from July 1, saying it is clear to even the blind and audible to the deaf that the situation of the country does not allow for that at the moment.This was announced, yesterday, by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, in a meeting with lawmakers at the National Assembly. She explained that due to ongoing consultations, it was agreed that the planned removal of fuel subsidy should be shelved till further notice.
This action followed the pressure mounted by the Nigeria Labour Congress (NLC), which threatened to embark on a nationwide protest from January 27.
The Sun says that the Sokoto State Governor, Mr. Aminu Waziri Tambuwal, has revealed that the African Development Bank (AfDB) will soon facilitate the establishment of an Onion Commodity Exchange in the state.
According to the governor, this was part of the outcomes of a recent high-level meeting he and some of his commissioners had with the management team of the bank in Abidjan, Côte d’Ivoire.
A statement signed by his media aide, Mr. Muhammad Bello, said the governor made this known at the closing of a three-day training for budding entrepreneurs in the state recently, adding that his administration was dedicated to supporting indigenous farmers.
The realisation of the plan will make such an establishment the 15th of its kind in Africa and the fourth in the country after the Abuja Securities and Commodity Exchange, Lagos Commodities and Futures Exchange, and AFEX Commodities Exchange Limited.
In economic parlance, trading in exchanges includes derivatives contracts, such as forwards, futures, options and spot trades- focusing on immediate delivery. It could also be traded on interest rates, foreign exchange futures, freight contracts instruments and environmental instruments.
ThisDay reports that after decades-long efforts to provide meters for electricity consumers in Nigeria, the device is yet to reach at least 8.1 million of the country’s current 12.8 million customers, new data from the Nigerian Electricity Regulatory Commission (NERC) has shown.
The information gleaned from a presentation made by the commission in one of its sensitisation forums, indicated that only about 4.66 million end-users, representing 36 per cent of the entire pool had been fully metered at the end of November 2021.
In the metering programme update, the data showed that taken generally, the Ibadan Electricity Distribution Company (IEDC) with over 2.07 million customers is leading the pack with the provision of 781, 123 units of the device for its customers.
This is followed by Abuja Disco which has so far provided meters to 702,716 of consumers of the product in its franchise area numbering 1.582 million in all as well as Ikeja Disco which has installed meters for 632,960 of its over 1.298 million customers.
But if taken from the point of view of the number of customers metered relative to total number of customers in each franchise, Eko leads the pack with 56 per cent, having been able to serve 345,357 of its 615,660 customers the electricity measuring devices.
The Punch reports that Dangote Industries Limited has said its oil refinery will start processing crude in the third quarter of this year.
The President, Dangote Industries, Aliko Dangote, said the plant would start with a processing capacity of 540,000 barrels per day.
“Mechanical work on the refinery is complete and hopefully before the end of third quarter we should be in the market,” Bloomberg quoted him as saying in a briefing at the plant site in Lagos.
“Full production can start maybe, by the end of the year or beginning of 2023,” he said. The facility, which will cost an estimated $19bn to build, has an installed capacity of 650,000bpd.
Its output will be more than enough to meet Nigeria’s fuel demands and turn Africa’s largest crude producer into an exporter of refined crude.
Dangote, Africa’s richest man, addressed reporters along with Akinwumi Adesina, president of the African Development Bank, which previously provided $300m loan in support of the project. The AfDB head and Dangote discussed possible collaboration to expand the billionaire’s businesses to more African countries to take advantage of the free trade area agreement, according to Adesina.
The newspaper says that a report by Agusto & Co. Limited has estimated that the Federal Government’s local currency debts will rise to N44tn in 2022.
This was disclosed in a report, titled ‘Nigeria in 2022’, on the economic outlook for 2022. It said, “Local currency debts of the FGN [Federal Government of Nigeria] will grow to about N44tn or about 9X of its revenues.
The median for key countries in sub-Saharan Africa is about 2X. “Because of the high cost of servicing these debts at commercial rates, the Central Bank of Nigeria will continue to accommodate the FGN by lending to them at rates below inflation, thus reducing FGN’s borrowing requirement from the markets and put a downward pressure on interest rates as banks, pension funds, insurance companies and other institutional investors compete for government securities.
“The average yield on FGN’s 10-year US$ bonds was 7.1 per cent in 2021 compared to 1.4 per cent for those issued by the government of the USA. This translates to a country risk premium of 5.7 per cent. We believe that this risk premium will be about 5.0 per cent in 2022 as fears about COVID-19 recede and the fact that Nigeria has ample resources to service its FCY debts.
GIK/APA