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Ministry Official Alleges Neglect of Calabar Port

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From a money spinner, the Calabar Port is turning into a revenue loser following its littering with wrecks and an abandoned rig worth millions of dollars.

Activities were low. Two “critical” wrecks and the abandoned Delta Queen Rig were seen there.

A senior official of the Ministry of Finance (FMoF), who pleaded not to be named, said the Federal Government and the Nigerian Ports Authority (NPA) should put the port into good use to revamp the economy.

The port, he alleged, has become an avenue for siphoning public fund.

He urgedPresident Muhammadu Buhari to direct the Minister of Transport, Mr Rotimi Amaechi, and the NPA to transform the port because of its importance to the nation.

The official said the port used to ba a money spinner. He told The Nation that between 2008 and last year, NPA generated $117,178,000 and over N2.2 billion from the port.

The breakdown of the amount generated in dollars and naira as exclusively obtained by The Nation is as follows: $26,529,000 and N203,438,000 in 2008.

Between 2009 and 2011, it was $37,522,000 and N898,737,000. In 2012 and 2013, it made $26,946,000 and N581,109,000. Between 2014 and last year, the port realised $26,197,000 and N540,942,000.

The official said: “It is sad that the multi-billion dollar investment at the port was rendered useless by the past management of the NPA.

“The amount generated between 2008 and last year by the agency showed that if the NPA is compelled to pay adequate attention to the port, more revenue would accrue to the government.

“If the several billions of naira collected by the NPA were judiciously invested in dredging the port, the channel will not remain shallow and difficult for big vessels to approach.

“It is sad that up till today, its channel remains shallow, and investors at the port have continued to count their losses,” the official said.

He accused some top past NPA officials of only interested in awarding contracts for dredging and re-dredging of the port without corresponding development of its infrastructure.

He alleged that poor work was done on the dredging of the channel.

The government, the official, lost a lot of revenue through the frequent dredging of the port.

But investigation revealed that the port has a comparative distance advantage to the Northeast than any port in the country.

While the distance between Cross River and Taraba states is 711km and the transit time is nine hours, 58 minutes; the distance from Port/Harcourt, Warri and Lagos to Taraba is 773km, 901km and 1,160km, and it takes 10 hours, 49 minutes; 12 hours, 4 minutes and 14 hours 24 minutes from each of the states to Taraba.

Findings also revealed that the distance from Cross River to Gombe state is 983km and the transit time is 13hrs,58mins; the distance from Port/Harcourt, Warri and Lagos to Gombe is 1,060km, 1,034km and 1,240km respectively, and it takes 14hrs, 15mins; 14hrs, 40mins and 16hrs 39mins from each of the states to Gombe.

Also, the distance from Calabar to Bauchi is 910km and the transit time 13 hours, 14 minutes. Whereas the distance from Port Harcourt, Warri and Lagos to Bauchi is 965km, 939km and 1,145km, and it takes 13 hours, 10 minutes; 13 hours, 36 minutes and 15 hours 34 minutes from each of the states to Bauchi.

Investigation further showed that the distance between Calabar and Adamawa is 865km with 11 hours, 57 minutes transit time. But the distance from Port Harcourt, Warri and Lagos to Adamawa is 927km, 1,055km and 1,314km, and it takes 12 hours, 49 minutes; 14 hours, 4 minutes and 16 hours 23 minutes from the states to Adamawa.

The story is the same from Calabar to Borno and Yobe states.

“There is no gain saying that Calabar Port is very strategic to the economic development of Nigeria particularly the Northcentral, Southsouth and Southeast regions of the country.

“Besides, when functional, it will increase the volume of vessel traffic and cargo throughput in the port, decongest Lagos ports and reduce cost of doing business for Calabar-based businessmen who spend additional transport cost to take delivery of their consignments in Lagos and Onne ports.

“The port is strategically located for imports and exports for distribution to other ports along the West/Central and Southern African coastline. The location of Calabar Free Trade Zone (CFTZ) in close proximity with the port speaks volumes for itself,” the official said.

He identified erosion, the length and the dredging of the 84km channel, the wrecks, the abandoned rig, insufficient tugs and pilot cutters, the deplorable Calabar/Itu/Aba road and the low height limitation of the Ikom bridge as the port’s major challenges, which should be fixed by the government to turn it to profit.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

FG Paying N1.1 Billion Per Day as Subsidy

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petrol Oil

FG Paying N1.1 Billion Per Day as Subsidy

The recent jumped in crude oil prices means landing cost of Premium Motor Spirit (PMS), popularly known as Petrol, has increased but the Federal Government has maintained the old pump price of N161 – N165 per litre.

In a series of reports, the Petroleum Products Pricing Regulatory Agency (PPPRA) open market price, the price fuel marketers are expected to sell, is N183 per litre as of yesterday. A break down showed N160 is the landing cost per litre while the additional N23 is the Petroleum Products Pricing Regulatory Agency (PPPRA) pricing template.

Therefore, with the payment of additional N23 as stipulated in the PPPRA pricing template and the national petrol per day consumption figure at 50 million litres, the Buhari led administration is offsetting about N1.1 billion on petrol consumption daily.

The Nigerian National Petroleum Corporation (NNPC) has been deducting the amount before remitting balance of oil sales to the Federation Account, according to a Businessday report.

An anonymous person in the oil marketing industry said: “We are back to the era of subsidy and Nigeria is bleeding badly because of this.

With deregulation, the current price of petrol should not be less than N181, so who is funding subsidy of the product for Nigeria to buy at the current fixed price?“.

Another oil marketers said, “the government does not have the boldness to allow full deregulation of petrol because of the spiral effects on Nigerians, and bearing in mind that Nigerians are in very hard times.

Alao Abiodun, the Head of Energy Research, New Nigeria Foundation, explained that “Because of the loans from the IMF and World Bank that they got with the condition that petrol should be deregulated, I believe the government is trying to manage the problem.”

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Economy

Nigeria’s Big Oil-Refining Revamp Gets Off To A Slow Start

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refineries

Nigeria’s Big Oil-Refining Revamp Gets Off To A Slow Start

A year after shutting down all of its dilapidated refineries to figure out how to fix them, Nigeria still can’t say how much it will cost to do the work or where the money will come from.

Nigerian National Petroleum Corp. said it has finished the appraisal of its largest facility, but hasn’t completed the process at two others. Refining experts said the extended halt means the plants are at risk of rotting away and unlikely to restart on time.

“Things haven’t been looking good lately,” with Nigeria’s plants probably “completely out of action for some 18 months,” said Elitsa Georgieva, Executive Director at Citac, a consultant that specializes in African refining.

The dysfunction of its domestic refineries has long put Africa’s biggest oil producer in an ironic situation. It exports large volumes of crude to plants overseas, then pays a premium to import the fuels its customers produce.

Failed Attempts

Pledges to fix the facilities have been made and broken again and again over the years. For at least a decade, NNPC’s 445,000 barrels a day of refining capacity barely processed 20% of that amount.

The latest effort to fix the refineries was supposed to be different to the failed attempts that came before. The company had totally shut all three plants down by January 2020 to do a comprehensive appraisal, and set the ambitious target of having them all back up and running at 90% of capacity by 2023.

“The refineries have been deliberately shut down to allow for a thorough diagnosis,” said Kennie Obateru, an Abuja-based NNPC spokesman. “They can be fixed based on what the diagnosis reveals.”

The appraisal of the 210,000-barrel-a day Port Harcourt refinery has been completed and NNPC has called for bids for the necessary repairs, Obateru said. The company hasn’t determined how much the work will cost.

“It is when we close the bids, everything is analyzed and presented that we will know how much we need,” he said.

The diagnosis is underway at the 125,000-barrel-a-day Warri facility and should be complete before the end of the year, he said. After that, the study of the 110,000-barrel-a-day Kaduna plant will commence.

Major Challenge

One year into the process, refining analysts are skeptical that all this work can be done by 2023.

“I don’t think anyone has a good understanding technically of what’s wrong with those refineries,” said Alan Gelder, vice president of refining, chemicals and oil markets at Wood Mackenzie Ltd. “They’re probably corroding, which makes it a very difficult proposition.”

NNPC reaffirmed its deadline and said there’s no reason the refineries, which are at least 40 years old, can’t be restored to full operation.

“There are refineries that are over a hundred years old still running, so age is not necessarily an impediment,” Obateru said.

There are parallel efforts backed by private companies to add to Nigeria’s capacity. Aliko Dangote, Africa’s richest person, is building a state-of-the-art 650,000 barrel-a-day refinery, which Citac estimates will start production in 2023.

Bringing NNPC’s Port Harcourt refinery to the same clean-fuel standards as Dangote’s modern plant would cost about $1.3 billion for the equipment, on top of whatever other repairs are required to get the facility running, Georgieva said.

NNPC is talking to oil-trading firms about $1 billion of prepayment deals that could finance the repairs at Port Harcourt, Reuters reported last week. Obateru declined to comment on the report, but said “I don’t envisage that we will have a problem getting people to invest.”

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Economy

Food Inflation Hits Record High of 19.56 Percent in December 2020

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Inflation

Food Inflation Hits Record High of 19.56 Percent in December 2020

Food Index, which measures prices of food items, grew by 19.56 percent in the month of December 2020 amid herdsmen attacks and flooding.

In the latest report from the National Bureau of Statistics (NBS), increases were recorded on Bread and cereals, Potatoes, Yam and other
tubers, Meat, Fruits, Vegetable, Fish and Oils and fats.

On month on monthly basis, the food sub-index rose by 2.05 percent in December 2020, 0.01 percent from 2.04 percent recorded in November 2020.

The average annual rate of change of the Food sub-index for the twelve-month period ending December 2020 over the previous twelve-month average was 16.17 percent, 0.42 percent points from the average annual rate of change recorded in November 2020 (15.75) percent” the report stated.

Headline inflation number increased by 15.75 percent in the month of December 2020, up from 14.89 percent.

The report noted that increases were recorded in all COICOP divisions that yielded the Headline index.

On a month-on-month basis, “the urban index rose by 1.65 percent in December 2020, same as the rate recorded in November 2020, while the rural index also rose by 1.58 percent in December 2020, up by 0.02 percent above the rate that was recorded in November 2020 (1.56 percent).

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