Close
Menu

Oil price

oil-prices-hit

Falling oil prices worry employers

, 0

 The Nigeria Employers’ Consultative Association (NECA) has expressed concern over the tumbling global oil price below the $57 on which the 2020 national budget was premised.

Its Director-General, Mr Timothy Olawale, who raised the concern, therefore, called on the Federal Government to ensure that the economy did not recede back into recession.

According to him, if the price stays this low for a long while, it can plunge the economy into a negative growth rate, which when sustained for three consecutive quarters, pushes us into a recession.

“The fluctuation of the oil price is already threatening the national budget benchmark and overall revenue of the government for 2020, with consequential negative implication for the proposed capital projects and other critical expense heads.

“Further concern is the implication for the naira, because oil revenue is the major source of our foreign currency earning.

“The implication is that a lower oil price will affect the FOREX supply to the country and stability of the naira.

“That also has implications for the ability of the Central Bank to meet FX demands in the long term, ” he said.

The Director-General, in a statement, called on government to deliberately create a roadmap for a rapid diversification of the economy away from oil.

According to him, the government needs to create avenues for more economic activities to happen like diversifying the tax revenue of the government beyond oil.

“The government should show clear fiscal discipline by cutting down costs and executing projects that will impact the economy positively as a result of plunging oil price in the international market.

“The shortfall in oil prices should not be a licence to further mortgage the future of the nation with borrowing as the budget is already struggling under the weight of debt service.

“Government should resist the temptation to further tax the already over-taxed private sector.

“This will only further incapacitate the Organized Private Sector and worsen the already precarious unemployment situation in the country.

“Deliberate efforts should be made by government to seek ways to finance some of its infrastructure projects through private sector investments through Public Private Partnerships (PPP), ” Olawale said.

Global oil prices plummeted to levels not seen since mid-2017 on March 6.

This was after the Organization of Petroleum Exporting Countries (OPEC) oil cartel failed to strike a deal to steady the market against the impact of the coronavirus by reining in production.

In 2020 alone, the oil price has collapsed by a third. It reached almost $69 per barrel in January, before the COVID-19 outbreak, before plummeting to one-year lows around $50 a barrel and just over $46 on March 6.

FUEL2

Zimbabwean releases $41m to ease fuel shortages

0

The Reserve Bank of Zimbabwe has started drawing down from the $500 million lines of credit it recently secured to support the procurement of essential commodities.

The bank said that the first disbursement of $41 million has been released for fuel procurement.
The country has been experiencing erratic fuel supplies for several weeks, with motorists enduring long queues at filling stations.
“The bank released 41 million dollar for the procurement of fuel on Oct. 5 and the fuel is currently being supplied and delivered to the various filling stations and supply points across the market,” it said.
It reassured the public that there was sufficient fuel in the country and there was, therefore, no need for panic buying of fuel and other basic commodities.
Relevant essential commodities include fuel, electricity, wheat and raw materials for the manufacturing of cooking oil. (Xinhua/NAN)

 

Crude-Oil-Prices-Rise-3

Nigeria’s oil, gas export fetch $416m in June

0

The Nigerian National Petroleum Corporation (NNPC) made $416.07 million from crude oil and gas export in June, which is 35.78 per cent higher than that of the previous month.
 
The details of the export were contained in the June 2018 edition of the Monthly NNPC Financial and Operations Reports.
 
NNPC noted that the crude oil export sales contributed $274.95 million which translated to 66.08 per cent of the dollar transactions compared with $244.72 million contribution in the previous month.
 
According to the report, the export gas for the month amounts to $141.12 million.
 
The report noted that the corporation undertook the repairs of ruptured gas pipelines which supplies gas to most thermal electricity generating plants in the country.
 
“In all, a total of 744 million standard cubic feet of gas per day (mmscfd) was delivered to the gas fired power plants in the month under review,” it said.
 
This, it said generated an average power of about 2,970MW compared with the May, where an average of 742mmscfd was supplied to generate 2,940MW.
 
“A total of 211.51billion cubic feet (bcf) of natural gas was produced in the month of June translating to an average daily production of 7,056.22mmscfd.
 
“For the period between June 2017 and June 2018, a total of 3,080.90 bcf of gas was produced, representing an average daily production of 7,826.41mmscfd.
 
“During the period under review, production from Joint Ventures, Production Sharing Contracts and Nigerian Petroleum Development Company contributed about 69.35 per cent, 21.77 per cent and 8.88 per cent respectively, to the total national gas production,” it added.
 
The report further noted that out of the 209.55bcf of gas supplied in June, a total of 113.08bcf of gas was commercialised, comprising of 36.23bcf and 76.85bcf for the domestic and export market respectively.
 
This, it said translated to a total supply of 1,207.74mmscfd of gas to the domestic market and 2,561.70 mmscfd of gas supplied to the export market for the month.
 
The supply, the report said implied that 53.96 per cent of the average daily gas produced was commercialised while the balance of 46.04 per cent was re-injected, used as upstream
fuel gas or flared.
 
“The gas flare rate was 10.33 per cent for the month under review, that is 721.83mmscfd, compared with the average gas flare rate of 10.4 per cent, that is, 813.37mmscfd for June
2017 to June 2018,” it said.
 
In the downstream sub-sector, 1,194.93million litres of petrol were supplied into the country through the Direct-Sale-Direct-Purchase (DSDP) arrangements as against the
1,096.45million litres of petrol supplied in May 2018.
 
It noted that the petroleum products (petrol, diesel & kerosene) production by the domestic refineries in the month under review amounted to 205.73million litres compared to 161.91million litres in May 2018.
buharipixx

Buhari eliminates shady oil deals

0

President Muhammadu Buhari says his administration is making progress in the fight against corruption as shady oil deals and the 
brazen theft of billions of Naira are no more.
The president stated this in his address
to the nation as part of activities to mark Nigeria’s 58th Independence
Anniversary in Abuja on Monday.
Buhari also disclosed that the Federal
Government had recorded progress in its efforts toward recovery of
stolen public funds and assets despite vicious and stiff resistance.
“We are making progress in the fight
against corruption and recovery of stolen public funds and assets
despite vicious and stiff resistance.
“The shameful past practice, of the brazen theft of billions of Naira is no more.
“Shady oil deals and public contracts that were never delivered have become things of the past.
“Consequently, and this is very evident across the country, we have done more with less in infrastructural developments.
“Roads, railways, major bridges, schools,
energy and power, air and sea ports, welfare of serving and retired
personnel both civilian and military including payment of legacy debt
such as pension arrears, have been attended to.’’
On the state of the economy, Buhari 
said, “there is now an enabling environment for local and foreign investment in Nigeria.
“We are building a rules-based system – a level playing field that is free from fixers and intermediaries.
“This is the cornerstone to help genuine
investors and honest consumers, and the platform that will allow for the
real reforms that we intend to deliver over the coming years.’’
He noted with delight that the government
was gradually strengthening the economy with a stable Naira and falling
inflation rate.
According to him, his administration is building an economy that is moving away from over reliance on oil.
Consequently, he said, the nation had
witnessed massive return to farms and seen bumper harvest, despite
recurrent floods across the country.

“These positive developments are the
result of our collective pursuit of a common vision through hard work
and dedication, after the missed opportunities and disappointments that
followed the return to democracy in 1999,’’ he
added.

Nigeria: NEPZA PERMITS THE OPERATION OF 3 NEW FREE TRADE ZONES WORTH $2.751 BILLION

, , , , , , , , , 0

The Managing Director
of Nigeria Export Zones Authority (NEPZA). Mr Emmanuel Jime, says the Authority
has granted licenses to three new Free Trade Zone (FTZ).
This announcement by
Jime was in a statement issued recently by the Head Corporate Communications of
the Authority, Mr. Simon Imobo-Tswam.
The Free Trade Zones
are Nasco Town FTZ; valued at $2.086 billion, Quit Aviation Services FTZ;
valued at $215 million, and Tomaro FTZ; valued at $450 million. Details of
these approved zones shall be posted on this blog soon.
The new licensed FTZs
hope to attract an inflow of $2.751billion in Foreign Direct Investment (FDI)
into the country, also targeting direct jobs in excess of 50,000.
This is a welcomed
development especially now that the economy of the country is looking
promising, the Free Zone Scheme will be one of the foil Crum, it has been
suggested that Nigeria economy would expand 2.7 percent in 2018.
The 2.7 percent mean
estimate derived from the survey which featured projection by US- based global
lenders, World Bank and the international monetary fund, as well as
Russia-based investment bank, Renaissance Capital. This also reflected optimism
over improved foreign exchange liquidity
.
“Aside the improvement
in real GDP, the performance across several other macro-indicators suggests
that the economy is on track for a broad-based recover,” said Andrew S Nevins,
a partner and chief economist at PWC.
Nigeria has been
hammered by a lengthy collapse in oil prices that began in mid-2014 and
snowballed into a two-decade low of $28 per barrel in January 2016.
The pain inflicted by
militant attacks in the Niger-Delta, which sent production levels to near decade-low
of 1.2 million barrels, dealt an even steeper blow on the oil-dependent
economy.
These factors tipped
the economy into its first full-year contraction in 25 years and triggered
acute dollar shortages that stifled the non-oil sector, as the latter contracted
0.2 percent to record its worst performance since 1984.
However, the economy
managed to limp off the recession in the second quarter of 2017 after expanding
0.55 percent, on the back of a rebound in oil prices, following an agreement
reached by OPEC members in 2016 to shave some 1.2 mbpd off the market to nip
growing supply glut in the bud and relaxed hostilities in the Niger-Delta.
This year, “we expect
the Nigerian economy should continue its rebound, perhaps reaching 2.5 percent
driven mainly by further improvements”.
Increased flow of
petrodollars has pushed the country’s external reserves of a 34-month high of
$38billion as of December 2017, according to data available on the Central Bank
of Nigeria (CBN) website, adding to positive exchange rate expectations.
“We retain our favorable
outlook for the exchange rate amid sustained stability in global crude oil
prices which should result in further build-up in foreign reserves as well as
CBN’s continued intervention to meet demand at the interbank foreign exchange
markets,” analyst at Cowry Assets Management said in a note to investors.  
Foreign exchange
liquidity has improved following not only increased CBN fire power, but the
creation of the investors & exporters window in April 2017 to boost liquidity
and ensure timely execution and settlement for eligible transactions as
stipulated by CBN. Some $18 billion have been traded at the window since
inception.