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Increase in Crude Prices: Nigeria’s Dangote claims IOCs sabotaging refinery

Published

6 days ago

June 25, 2024

Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, has accused International Oil Companies in Nigeria of plans to frustrate the survival of the new Dangote Oil Refinery and Petrochemicals.

Edwin said the IOCs were “deliberately and willfully frustrating” the refinery’s efforts to buy local crude by hiking the cost above the market price, thereby forcing the refinery to import crude from countries as far as the United States, with its attendant high costs.

Speaking to reporters on Friday during a one-day training session hosted by the Dangote Group, Edwin further charged that the Nigerian Midstream and Downstream Petroleum Regulatory Authority had given marketers licenses to import unclean refined products into the nation without any discrimination.

Edwin claims that although the Federal Government of Nigeria granted 25 licenses for the construction of refineries, only the Dangote Group fulfilled its commitment.

The vice president mentioned that the refinery had shipped more than 3.5 billion litres of aviation fuel and diesel to Europe in the previous few months, even as he urged the government to provide support. It was stated that around 90% of the fuel produced was exported.

“The Federal Government issued 25 licences to build refineries and we are the only one that delivered on our promise. In effect, we deserve every support from the government. It is good to note that from the start of production, more than 3.5 billion litres, which represents 90 per cent of our production, have been exported. We are calling on the Federal Government and regulators to give us the necessary support to create jobs and prosperity for the nation,” Edwin stated.

He continued by saying that despite the Nigerian Upstream Petroleum Regulatory Commission’s best efforts, crude oil for the refinery with a capacity of 650,000 would not be allocated, “the IOCs are deliberately and willfully frustrating our efforts to buy the local crude.”

According to the Dangote official, the IOCs have occasionally pushed the refinery to pay $6 more than the market price. As a result, the company has been compelled to lower its output and incur higher costs for the import of crude from nations like the United States.

He said, “Recall that the NUPRC recently met with crude oil producers as well as refineries’ owners in Nigeria, in a bid to ensure full adherence to Domestic Crude Oil Supply Obligations as enunciated under section 109(2) of the Petroleum Industry Act. It seems that the IOCs’ objective is to ensure that our petroleum refinery fails. It is either they are deliberately asking for a ridiculous/humongous premium or they simply state that crude is not available. At some point, we paid $6 over and above the market price. This has forced us to reduce our output as well as import crude from countries as far as the US, increasing our cost of production.

“It appears that the objective of the IOCs is to ensure that Nigeria remains a country which exports crude oil and imports refined petroleum products. They (IOCs) are keen on exporting the raw materials to their home countries, creating employment and wealth for their countries, adding to their Gross Domestic Product, and dumping the expensive refined products into Nigeria – thus making us to be dependent on imported products. It is the same strategy the multinationals have been adopting in every commodity, making Nigeria and Sub-Saharan Africa to be facing unemployment and poverty, while they create wealth for themselves at our expense.”

“This is exploitation – pure and simple. Unfortunately, the country is also playing into their hands by continuing to issue import licences at the expense of our economy and at the cost of the health of the Nigerians who are exposed to carcinogenic products.”

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Nigeria’s FX increases by 4.06%, hits $34.14 billion in June

Published

2 hours ago

June 30, 2024

Ifeoluwa Dada

Nigeria’s reserves have increased steadily, reaching $34.14 billion on Friday after increasing by 4.06% from $32.74 billion on June 3, 2024, according to figures released by the Central Bank of Nigeria.

To support the nation’s energy distribution industry, the government obtained a $500 million loan from the World Bank, as revealed by the Bureau of Public Enterprises in May. The World Bank also disclosed that the nation would get $2.25 billion in assistance to stabilize the economy. The most recent loan rounds increased the nation’s reserves that the World Bank provided to the Federal Government.

“This combined $2.25bn package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk. It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services.” The multilateral lender stated in a statement.

As a result, in just one month, the external reserves have increased by nearly $1 billion. Due to the nation’s dollar shortfall last year, the central bank was compelled to flog the naira to boost foreign cash inflow.

Following that, the local currency lost approximately 300% of its value in a year, closing at 1,514.31/$ on Friday at the Nigerian Autonomous Foreign Exchange market.

In the first half of 2024, the naira was the world’s worst-performing currency, according to a Bloomberg analysis released on Friday. It stated that the Central Bank of Nigeria’s attempts to fortify the currency had been hampered by devaluation, a lack of dollar liquidity, and market volatility.

Other than the naira, the world’s poorest-performing currencies in the first half of the year were the pound in Egypt and the cedi in Ghana.

“The naira’s performance is the worst among global currencies tracked by Bloomberg beside that of the pound in Lebanon, which is undergoing an economic crisis and witnessing dollarisation,” the report noted.

Olayemi Cardoso, the governor of the CBN, said that the central bank was “relatively pleased” with the strides achieved in stabilizing the value of the local currency.

“I do believe that we have more or less seen the worst volatility,” Cardoso told Bloomberg TV.

“The losing streak is the longest since July 2017 and takes the decline since the start of the year to 40 per cent.

To increase the quantity of dollars in the nation and stabilize the value of the local currency, the central bank has implemented several measures. International Money Transfer Operators now have access to the official window for selling foreign exchange, the apex bank stated last week.

The central bank stated in a circular that was signed by Dr W.J. Kanya, the acting director of the Trade and Exchange Department, that the action would allow IMTOs to get naira liquidity through the official window, facilitating the prompt settlement of remittances from the diaspora.

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IMF raises Zambia’s debt to $1.7 billion, approves $570 million installment

Published

3 days ago

June 27, 2024

Ifeoluwa Dada

The Extended Credit Facility for Zambia has undergone a third assessment, and the International Monetary Fund (IMF) has announced that its executive board has approved the immediate disbursement of about $569.6 million.

The Fund’s board also approved a request to boost funding from $1.3 billion to $1.7 billion to assist the nation of southern Africa in dealing with a severe drought that has impacted electricity generation and resulted in agricultural losses.

IMF representative, Antoinette Sayeh stated in a statement that while tackling humanitarian issues brought on by the drought, Zambian authorities have achieved progress on structural and economic reforms.

“Going ahead, coordinated macroeconomic policies, continued efforts to restore fiscal and debt sustainability, and consistent reform implementation would be key to addressing the impact of the drought, preserving macroeconomic stability, and bolstering growth,” said Sayeh, the Fund’s deputy managing director.

Rich in copper After a debt restructuring procedure that lasted more than three and a half years, Zambia managed to pull itself out of default this month. The experience served as a lesson for the G20’s Common Framework mechanism, which is intended to assist low-income nations in addressing unmanageable debt loads.

Extended debt restructuring has hindered investment, limited economic expansion, and put a strain on regional financial systems.

To assist pay off external debt and deal with the drought, Zambia’s finance minister requested last week that the parliament authorize an additional 41.9 billion kwacha, or $1.65 billion, in spending.

On the slopes of the magnificent, active Mount Bromo, the Tenggerese people of Indonesia have been performing an age-old ceremony for decades.