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FG May Slash N6tn Fuel Import As Dangote Begins Supply In June

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The Federal Government may cut its approximately N6.2tn yearly fuel import bill if the Dangote Petroleum Refinery begins the sale of petrol as promised by Aliko Dangote, the Chairman of the Dangote Group.

Speaking on Friday at the Africa CEO Forum Annual Summit in Kigali, Rwanda, Dangote gave Nigerians the assurance that, as per the refinery’s planned operations, the country would no longer require petrol imports beginning the next month.

According to a National Bureau of Statistics study, President Bola Ahmed Tinubu eliminated fuel subsidies on May 29 of last year, resulting in a monthly average reduction of the nation’s gasoline imports to one billion litres.

According to Dangote, the $20bn refinery can meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.

He said, “Right now, Nigeria has no cause to import anything apart from gasoline and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre.

  • West Afria’s needs

“We have enough gasoline to give to at least the entire West Africa, diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico.

“We have started producing jet fuel, we are producing diesel, and by next month, we’ll be producing gasoline. What that will do is it will be able to take most African crudes.”

The assurance by Dangote, if realised, would reduce the country’s approximately N6.2tn annual spending on PMS import.

With an average pump price of N670/litre, marketers put the average landing cost of petrol currently at N520/litre, considering the price of the Nigerian National Petroleum Company Limited, which is the only importer of the product.

Operators also put the average difference between the landing cost and pump price of PMS at N150/litre.

With an average monthly consumption of 1 billion litres, Nigeria currently spends approximately N520bn on the importation of PMS every month. This is N6.2tn annually.

Going by the planned June supply of PMS by Dangote, the country is expected to save a substantial amount from the elimination of shipping and other charges attached to importation, according to operators and industry experts.

The difference between the landing cost and the pump price of petrol is N150 per litre, according to operators.

Landing cost is the total cost of delivering the shipment to Nigeria from a foreign country, including all expenses incurred from the point of production to the point of delivery.

Refined petroleum products often arrive in the country via the Atlas Cove, from where it is transferred to jetties via daughter vessels. From jetties, the fuel is moved to various tanks.

Marketers say this difference of N150 between the landing cost and the pump price has to do with the cost of moving PMS from the port to various filling stations across the country. This also includes marine costs, and the Nigerian Ports Authority charges, among others.

The PMS landing cost is different from that of diesel, aviation fuel, and other petroleum products.

In foreign currency, the country spends an average of $4.16bn annually if converted the N6.2tn at the rate of N1,520 per dollar. However, there are arguments that the NNPCL spends more than this on PMS importation.

The actualisation of Dangote’s promise is expected to strengthen the naira.

According to industry reports, Nigeria spends at least $10bn annually on the import of PMS, aviation fuel, diesel and other petroleum products.

Analysts believe that not less than one-third of the country’s annual foreign exchange expenditure goes into fuel imports.

  • Importation Stoppage

A reliable source at the Central Bank of Nigeria said that the anticipated commencement of fuel supply by the Dangote refinery in June would herald a positive shift in the nation’s economy.

According to the source, the move to halt fuel imports will lead to a substantial reduction in the demand for foreign exchange, thereby strengthening Nigeria’s economic position.

The source further noted that, with the demands on forex reducing, the naira would regain strength.”As the dollar demand reduces, the naira will rebound and that is good for the economy,” the CBN source said.

The NNPCL spokesperson, Olufemi Soneye, declined comments when contacted.

Soneye said the NNPCL is no longer a corporation and could not comment on Dangote refinery’s impact.

The Director of Press and Public Relations, Ministry of Finance, Mr. Mohammed Manga, could not be reached for comments on Sunday as calls and messages sent to him went unanswered.

Also, the Director of Corporate Communications, Central Bank of Nigeria, Hakama Sidi Ali, did not respond to calls to her phone. She had yet to respond to a message sent to her line.

But the Director-General of the Centre for the Promotion of Public Enterprise, Dr Muda Yusuf, said the commencement of refining of petrol by the Dangote refinery would be a game changer for the Nigerian economy, especially from the perspective of the effect on the foreign exchange market and domestic energy cost.

Yusuf noted that, currently about 30 per cent of Nigeria’s import bill is on petroleum products.

“This has been estimated at between $10bn and $15bn annually over the decade. This would amount to a substantial easing of demand pressure on the foreign exchange market,” he stated.

Yusuf added further, “Already we have seen the impact of the domestic refining on diesel and aviation fuel importation. Even the prices have dropped. I therefore expect to see a major impact on the exchange rate.

“However, this positive outlook would depend on how much of the feedstock of crude can be sourced locally by the refinery.  If the refinery has to resort to crude oil importation, the optimism about the foreign exchange impact may have to be moderated.  Because that would imply some significant forex outflows for crude importation.”

He added that Nigeria is likely to see less importation of petrochemical products and other associated by-products from the refining process.

During an energy conference in Abuja recently, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, opined that Nigeria does not need to import fuel, expressing concerns that the bulk of the country’s foreign exchange goes into fuel importation.

“We must find a solution to our forex problem. Nigeria does not need to import fuel. We should free our scarce forex for other sectors of the economy. I am aware that the bulk of our forex goes to the importation of refined oil products.” Lokpbiri stated, expressing optimism that home-based refineries would put an end to fuel importation.

  • Marketers Plan Meeting

Meanwhile, fuel marketers said plans had been concluded to meet Dangote for discussions on possible price cuts as his refinery begins the production of PMS next month.

The marketers, under the aegis of the Independent Petroleum Marketers Association of Nigeria, told The PUNCH on Sunday they would meet with Dangote to negotiate a discount through bulk purchases.

Dangote’s 650,000 barrels per day refinery has been trying to secure crude supplies from the United States following the inability of Nigeria to ramp up production.

The refinery, which is the largest in Africa and Europe when it reaches full capacity, has since commenced the sale of diesel and aviation, but its petrol is yet to hit the market.

In April, Dangote crashed the price of diesel from around N1,500 to N1,000 per litre.

But Nigerians are currently eagerly waiting for petrol, which is the major fuel used by transporters, small-scale businesses and individuals for alternative power generation.

The promise of Dangote to end fuel import may be a relief to marketers and Nigerians, who are yet to fully recover from the recent fuel scarcity that nearly brought the economy to a halt in Lagos, Abuja and other parts of the nation.

Speaking in an interview with our correspondent, the National Vice President of the IPMAN, Hammed Fashola, disclosed that the marketers had requested a meeting with the Dangote Group chairman.

According to Fashola, there will be a follow-up to a letter written to Dangote earlier to fast-track a meeting and reach an agreement before the commencement of the sale of PMS.

Fashola had earlier called on the company to consider working directly with the association instead of individuals.

He noted that IPMAN should be a beautiful bride before Dangote for being in control of over 80 per cent of the filling stations in Nigeria.

The IPMAN leader said, “We have our letter with them, we are expecting their response, and we will surely do a follow-up. The letter was sent about a month ago and we are going to follow up. We are just like a ready-made market for Dangote. It is an advantage for him to have us in his programme. I believe that he would like to have us.”

He added that the association would request a discount during the meeting with Dangote.“You know when you come together as a group, you have that negotiating power on your strength. There is no way we will not negotiate for a discount. That is why we don’t encourage individual company participation,” he stated.

 

Credit: The Punch

BIG STORY

President Tinubu Shrugs Off Slip, Says I “Dobale” For Democracy Because It’s Worth Falling For

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Nigeria’s President, Asiwaju Bola Ahmed Tinubu, has reacted to the trending video of him tripping at Eagle Square in Abuja on Wednesday, saying democracy is worth falling for.

Recall that Tinubu missed a step while climbing the vehicle for a parade at Eagle Square in Abuja during an event for the 2024 Democracy Day. But he quickly regained his balance and continued with the activities for the day.

When speaking about the incident during a day to mark the day, Tinubu joked about the incident and said that he had only “dobale” – paid homage to democracy in the Yoruba style.

According to him, while celebrating Democracy, “I ‘dobale’ for democracy,” (meaning I bowed for Democracy).

President Tinubu also used the dinner event to call for the unity of Nigeria irrespective of tribe, religion, or political affiliations.

He said the unity of Nigeria cannot be traded.

Reactions have continued to pour in from several Nigerians including members of the opposition since the incident.

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NDIC Puts Heritage Bank’s Head Office, Vehicles, Other Assets On Sale

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In its capacity as the bank’s liquidator, the Nigeria Deposit Insurance Corporation (NDIC) has put the collapsed Heritage Bank’s head office in Lagos and its branches around the nation up for sale.

In an editorial published on Thursday, NDIC announced the sale of 48 bank premises as well as its chattel, which includes automobiles, office equipment, plant, and machinery in 62 other locations across the nation.

“The Nigeria Deposit Insurance Corporation in the exercise of its right as Liquidator of failed Deposit Money Banks hereby invites interested members of the general public to buy the assets (landed property and chattels) of defunct Heritage Banks through public competitive bidding,” part of the advertorial read.

The head office of the bank and its annex located at 143 Ahmadu Bello Way and 130 Ahmadu Bello Way, Victoria Island, Lagos was listed for sale (buildings, chattels, generator, and motor vehicle). Also listed for sale were six other branches in Lagos, four branches in Abuja, four in Rivers States, and the others spread across the country.

Interested parties are invited to come for an inspection and subsequently put in bids on the assets to be submitted to the NDIC office in Lagos.

Bids are expected to come in with 10 per cent of the bid amount in Certified Bank Draft. Successful bidders will be required to pay the balance of the bid price within two weeks of notification.

Earlier, the corporation announced the commencement of the verification and payment of the depositors of the bank with N5m or less in their accounts. This category of customers makes up about 99 per cent of the bank customers.

The Managing Director of the NDIC, Bello Hassan, at a media briefing on the liquidation of Heritage Bank in Abuja last Wednesday, put the total depositors at Heritage Bank at 2.3 million.

Hassan noted that the total bank deposits at Heritage Bank stood at N650bn while its loan portfolio was about N700bn.

In announcing the revocation of the licence of Heritage Bank, the apex bank in a statement signed by the Acting Director of Corporate Communication, Sidi Ali, said, “This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The board and management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.

“This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby, making the revocation of the licence the next necessary step.”

Stakeholders in the sector have gone on to express confidence in the decision of the CBN in the overall interest of the sector.

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BIG STORY

Minimum Wage: Mass Sacking Imminent, FG Warns As Labour Disowns Agreement

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The Federal Government on Wednesday chastised organised labour to consider the broader economic implications of its push for an unrealistic higher national minimum wage.

The admonition was delivered by Mohammed Idris, Minister of Information and National Orientation. Idris warned that the N250,000 minimum salary proposed by labour may damage the economy, cause a mass layoff of workers, and endanger the wellbeing of Nigerians.

The labour unions, on the other hand, denied President Bola Tinubu’s assertions that a deal had been reached on the new national minimum wage during his Democracy Day speech on Wednesday.

Acting President of the Nigeria Labour Congress, Prince Adewale Adeyanju, said as of the time negotiations ended on June 7, no agreement had been reached by the Tripartite Committee on the National Minimum Wage.

Adeyanju is acting on behalf of the NLC president, Joe Ajaero,  who is attending an International Labour Organisation conference in Geneva, Switzerland.

Tinubu drew the ire of the unions after stating that his administration would soon submit an executive bill to the National Assembly to codify the agreements reached in the minimum wage negotiations between Labour, the private sector, the states and the Federal Government.

The parties had engaged in prolonged talks for weeks with the unions insisting on N250,000 minimum wage while the Federal Government and the Organised Private Sector offered N62,000.

However, the state governors said they would not be able to sustain any minimum wage higher than N60,000.

Dismissing the offers made by the Federal Government and the OPS, the labour unions said they would not negotiate what they described as ‘starvation wage.’

  • N62,000 not acceptable

The Assistant General Secretary of the NLC, Chris Onyeka, said Labour would not accept the latest offer of N62,000 and the N100,000 proposal made by some individuals and economists.

This was as the NLC President, Joe Ajaero, said the unionists were waiting on the President to consider Labour’s proposal.

But speaking at the opening of the 2024 Synod of the Charismatic Bishops Conference of Nigeria in Abuja on Wednesday, the information minister emphasised the imperative of a realistic wage system that safeguards against mass retrenchment while addressing workers’ needs.

Idris restated the government’s dedication to reassessing the minimum wage but cautioned against demands that could disrupt the economy.

He stated, “As I have repeatedly said, the Federal Government is not opposed to the increase of wages for Nigerian workers but we keep on advocating for a realistic and sustainable wage system for the workers – a wage system that will not undermine the economy, lead to mass retrenchment of workers and jeopardise the welfare of about 200 million Nigerians.

“We want the labour unions to understand that the relief that Nigerians are expecting, and that they fully deserve, will not come only in the form of an increase in wages.”

He highlighted the ongoing efforts to alleviate the cost of living, citing initiatives like the Presidential Compressed Natural Gas programme aimed at reducing transportation expenses by 50 per cent.

While advocating wage increases, Idris stressed the importance of holistic relief measures beyond salary adjustments, urging Labour to recognise the significance of programmes like the CNG initiative in enhancing citizens’ purchasing power.

“It will also come as an effort to reduce the cost of living and to ensure that more money stays in the pockets of Nigerians. And this is where programmes like the Presidential CNG initiative come in.

“By replacing or complementing petrol usage with CNG, that programme alone will cut transportation costs by as much as 50 per cent,” he claimed.

The minister called on religious leaders to assist in raising public awareness about government initiatives and efforts.

  • Religious leaders

He stressed the crucial role of the clergy in disseminating information about available opportunities and the government’s ongoing efforts.

“As a government, we need your support, advice, and feedback,” Idris stated.

“Very importantly, we need you to be aware of the efforts being made and the challenges being faced so that you can help us communicate these to your congregations and the general public,” he added.

The minister highlighted the influential platforms of religious leaders, noting their potential to enlighten Nigerians on their rights, responsibilities, and the economic opportunities provided by the policies under the President’s Renewed Hope Agenda.

The agenda, he noted, aimed to promote economic rebirth, strengthen national security, boost agriculture and food security, and transform infrastructure and transportation.

“Information and awareness are critical, and this is where our religious leaders come in. You have very influential platforms that can enlighten Nigerians on their rights, responsibilities, and the abundance of economic opportunities being thrown up by the policies and programmes being implemented under the Renewed Hope Agenda of President Bola Tinubu,” he explained.

In his remarks, the National President of the Charismatic Bishop Conference, Archbishop Leonard Kawas, reaffirmed the organisation’s unwavering support for Tinubu’s administration, emphasising their commitment to collaborative efforts to realise the nation’s collective aspirations.

  • ‘No agreement yet’

In their reaction to the President’s national broadcast, Adeyanju disagreed with Tinubu’s statement that his administration negotiated in good faith and with open arms with Organised Labour on the new national minimum wage.

Tinubu during his broadcast stated, “In this spirit, we have negotiated in good faith and with open arms with organised Labour on a new national minimum wage. We shall soon send an executive bill to the National Assembly to enshrine what has been agreed upon as part of our law for the next five years or less.

“In the face of labour’s call for a national strike, we did not seek to oppress or crack down on the workers as a dictatorial government would have done. We chose the path of cooperation over conflict.

“No one was arrested or threatened. Instead, the labour leadership was invited to break bread and negotiate toward a good-faith resolution.

“Reasoned discussion and principled compromise are hallmarks of democracy. These themes shall continue to animate my policies and interaction with the constituent parts of our political economy.”

But Adeyanju in a statement dismissed the President’s assertion, insisting that he might have been misled by his advisers, noting that two figures- N250,000 from Organised Labour and N62,000 from the government and the OPS- were arrived at and ought to have been submitted to Tinubu.

According to the NLC official, anything to the contrary is not only doctored but won’t be accepted by Labour.

The congress maintained its stance on the N250,000 minimum wage, rejecting the government’s offer of N62,000 as grossly inadequate.

The statement read in part, “The NLC would have expected that the advisers of the President would have told him that we neither reached any agreement with the Federal Government and the employers on the base figure for a National Minimum Wage nor on its other components.

“Our demand still remains N250,000 only and we have not been given any compelling reasons to change this position which we consider a great concession by Nigerian workers during the tripartite negotiation process.

“We are therefore surprised at the submission of Mr President over a supposed agreement. We believe that he may have been misled into believing that there was an agreement with the NLC and TUC.

“There was none and it is important that we let the President, Nigerians and other national stakeholders understand this immediately to avoid a mix-up in the ongoing conversation around the national minimum wage.”

Adeyanju alleged that the labour leaders were intimidated by security agencies during the minimum wage talks.

“Fully armed soldiers surrounded us while we were in a negotiation with the government and despite denials; recent statements by senior officials of the government reaffirmed our fears contrary to the assurances by the government.

“However, we remain assured that the President’s democratic credentials will come to the fore in favour of Nigerian workers and masses,’’ he expressed optimism.

According to the union, the Democracy Day celebration was an opportunity for the President to demonstrate his love for Nigerian workers and the masses by shunning the advice that may be coming from ‘’those whose intentions were continuously focused on hurting Nigeria’s poor and struggling workers.’’

He appealed,  “Mr President should not allow these individuals and groups to sabotage his promise of lifting Nigerian workers out of poverty.

“The President’s advisers obviously did not tell him the truth that the leaders of the trade unions were intimidated and harassed. It is therefore important that Mr President understands that we were threatened severally by his operatives perhaps without his consent.

“Series of media propaganda calculated to intimidate and harass us were, and, are still being waged against the trade unions by senior officials of this government. “

The NLC noted that there was no agreement as regards the duration of the Minimum Wage Act.

“It is also important that Mr President should know that most of his officers are working round-the-clock to set up the leadership of congress and the trade unions.

“We never agreed on a five-year duration of the Minimum Wage Act, though we acknowledge that the President mentioned five years or less.

“We also agreed that inflation should be pegged at a level for a certain amount to be agreed as minimum wage. This is to bring clarity to what the report should contain.

“Once again, we reiterate that it will be extremely difficult for Nigerian workers to accept any national minimum wage figure that approximates a starvation wage. We cannot be working and yet remain in abject poverty.

“We seek justice, equity, and fairness for all Nigerians, and this we hope would also drive the actions of Mr President who promised a Living Wage to Nigerian workers. This is an opportunity to show that he listens to Nigerians as he promised,” the labour movement said.

  • OPS speaks

Also commenting on the presidential broadcast, the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, stated that no consensus had been reached on the national minimum wage.

The NACCIMA President, Dele Oye, who is part of the 37-member tripartite committee, said the panel was still in the middle of negotiation, faulting the contradictory statements being made on the talks.

“No agreement has been reached with Labour; however, it is wrong to make a press statement in the middle of negotiations apart from appealing to all parties involved to work harder to resolve outstanding issues, as the impasse is already creating uncertainty in the ability of businesses to make decisions,” he admonished.

In January, the government inaugurated the tripartite committee on the national minimum wage.

The committee was tasked with the responsibility of recommending a new national minimum wage for Nigerian workers.

Over the past few months, the federal and state governments, organised labour, and representatives of the private sector have been deliberating on a new minimum wage for workers.

However, the demand by organised labour regarding the minimum wage has yet to be met.

On June 3, the Nigeria Labour Congress and Trade Union Congress embarked on an indefinite nationwide strike to protest against the government’s inability to meet their minimum wage demand.

Twenty-four hours later, the labour unions “relaxed” the strike by one week.

 

Credit: The Punch

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