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Nigerian oil marketers say fresh petrol price increase looms as crude reaches $94

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Following a recent rise in the cost of crude oil, and further depreciation of the Nigerian currency, Naira, there are concerns about another hike in the price of Premium Motor Spirit, popularly called petrol.

On Sunday, oil marketers asked that the government should gradually boost the amount secretly paid as a petrol subsidy due to the rapid spike in crude oil price to about $94 per barrel, and Nigeria’s foreign exchange crisis.  According to the downstream oil dealers, around 80% of the price of PMS was determined by the price of crude oil and the dollar’s value at the time.

The price of Brent crude, the world’s standard for oil, increased to $94 a barrel on Sunday, the highest level since 2023. Oil started the year at around $82/barrel, fell below $70/barrel in June, but has recently traded above $92/barrel.

The dealers stressed that if the government maintained the price of petrol at N617 per litre, then the subsidy on PMS had been covertly returned. They explained that with the most recent increase in the price of crude oil, the cost of petrol was expected to climb.

The marketers noted that in July when the price of fuel was increased to N617 per litre, crude oil traded at roughly $82 per barrel, while the exchange rate at the parallel market was not as high as N950 per dollar.

The previous administration of Muhammadu Buhari postponed the removal of the subsidy but made budgetary preparations for the subsidy to terminate by June 2023. However, President Tinubu stated, “Subsidy is gone,” during his inaugural speech on May 29.

Last month, Tinubu, during a nationwide address, revealed that the government had saved ₦1 trillion in the two months since the removal of the petrol subsidy. He added that the money, which would have been squandered by those he called “smugglers and fraudsters”, would now be channelled into intervention programmes targeting families nationwide.

Since the removal of fuel subsidies, there has been back and forth between the government and organized labour on the best approach to manage the fallouts of the policy.

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Despite protests, TotalEnergies gets South Africa’s approval for offshore drilling

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After turning down an appeal from more than a dozen people and lobbying organisations, South Africa’s environment ministry has approved TotalEnergies’ plans to drill for natural gas and oil offshore.

There have been a string of lawsuits seeking to stop energy companies from exploring new offshore discoveries at the foot of Africa, with a specific appeal to stop TotalEnergies from drilling in Blocks 5/6/7 off the coast of Cape Town.

The area in question is 10,000 square kilometres in size and is located offshore roughly between Cape Town and Cape Agulhas. It is 170 kilometres from the coast at its farthest point and 60 kilometres from the coast at its closest point. The water depth ranges from 700 metres to 3,200 metres.

Natural gas and crude oil production are quite limited in South Africa, and consequently, the bulk of South Africa’s crude oil is imported, as the country largely counts on its large coal resources.

The request is for the ministry to revoke the environmental authorization given to the French energy company by the Department of Mineral Resources and Energy in April, citing issues like marine noise, oil spills, climate change, and inadequate public consultation. But environment minister, Barbara Creecy on Monday dismissed the concerns in a 144-page ruling.

“I am therefore satisfied that the impacts of noise and light have been adequately assessed and mitigated to ensure low impacts on the receiving environment. As such this ground of appeal is dismissed,” Creecy said in the ruling.

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Nigeria sets $5bn investment target for its startups

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Nigeria’s Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, has revealed a plan to increase investments into the country’s tech start-ups to $5 billion within five years.

Tijani, on Monday in a policy document titled, ‘Accelerating our Collective Prosperity through Technical Efficiency: A Strategic Plan for the Federal Ministry of Communications, Innovation & Digital Economy,’ announced the target.

Describing how the ministry would measure if its plan was working, Tijani said, “Increase capital raised by Nigerian tech startups 50 per cent year-on-year from ~$1bn/yr in 2022 to $5bn/yr in 2027.”

The minister emphasised that a strong digital economy required innovation, entrepreneurship, and access to capital in the current global technology landscape. According to him, the ministry’s main goal in this regard will be to promote the development and sustainability of startups, with a focus on those coming up with ground-breaking solutions for important economic sectors.

Tijani said, “Recognising the critical role of patient capital in the growth of startups, we are committed to increasing the local availability of patient capital. We intend to create an environment for startups to raise the funding they require to thrive locally and promote the domiciliation of startups within our nation.”

According to Tijani, “Digital transformation and innovation are fast becoming a catalyst for economic progress,” and the “intersection of a strong digital economy and our innovative and youthful population presents us with a unique opportunity to chart a course towards prosperity, inclusion, and global relevance.”

In his remarks on AI, the minister said that over the next 20 years, the technology would usher in a new era of technological and economic change. Tijani emphasised that Nigeria needed to develop a comprehensive national strategy to utilise AI’s potential responsibly and inclusively.

He said, “The implementation of the strategy amongst other things is expected to elevate Nigeria as a top 10 location for AI model training and talents globally. In addition, we will position Nigeria as a global leader in accelerating inclusivity in AI dataset.”

According to Africa: The Big Deal, Nigerian startups raised $1.2 billion in 2022 despite a funding shortage, while a Briter Bridges report says African startups raised $5.4 billion in 2022.

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