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We Won’t Succumb to Blackmail, VON Automobile Tells Senate

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  • We Won’t Succumb to Blackmail, VON Automobile Tells Senate

Automobile manufacturers, VON Automobile Nigeria Limited, yesterday refuted allegations by the Senate, accusing the company of economic sabotage, saying it was absolute falsehood and premeditated blackmail to disparage their accomplishment.

VON Automobile Managing Director, Adetokunbo Aromolaran, made this remark in his speech at an extraordinary session with the media at a guided tour of the company’s facility in Ojo, Badagry Highway, Lagos.

Aromolaran who passionately condemned the claim of the senate published on Sunday, November 20, described it as unsubstantiated, adding; “rather than investigate their story, some media houses made themselves easy tools in the hands of mischievous blackmailers.”

He said: “for the avoidance of doubt, we regard the whole exercise as one of blackmail, the objectives of which will not be realised because they are false.”

He therefore urged the media to always investigate their reports and ignore “calculated blueprints for calumny and cheap blackmail.”

Senator Hope Uzodinma-led Senate Committee on Customs, Excise and Tariff had on October 28, during one of its oversight assignments claimed that it discovered 1,500 units of exotic vehicles concealed in the Volkswagen warehouse, wondering if the vehicles were assembled at a deserted facility with disused equipment, he was quoted.

The Senate Committee consequently labeled VON Automobile as economic saboteur, warning it would organise a public hearing to unravel allegations of sharp practices even when the Nigeria Customs Service public relations officer Wale Adeniyi was quoted as saying he couldn’t verify the development.

VON Automobile Limited is the local assemblers of Hyundai, Nissan and Volkswagen passenger cars with Ashok Leyland and Iveco buses and trucks respectively.

Dismissing the allegations as smirk of a preconceived plan to embarrass VON Automobile, the director described the company as a responsible organisation guarded by ethical values and believe in the rule of law and constituted authority in the discharge of its duty, even when times become frustratingly overbearing, he says.

Mr. Aromolaran who claimed the oversight visit to the plant was presumptuous said: “We were at a loss whether the oversight team was a visit to VON Automobile Nigeria Limited, the vehicle assembly plant or a customs raid on a commodity warehouse.

“Little wonder there was disbelief when they were told no commodities were warehoused on the premises but on insistence, they inspected all warehouses even those not under VON operations and didn’t discover a grain of any commodity – an operation, which in itself, was illegal,” the plant helmsman declared.

The perceived inspection halted VON Automobile plant operations for one week to pave the way for inventory and verification of all documentation of vehicles on the premises and also resulted in the compulsory closure of the factory gates till the examinations was decided, Mr. Aromolaran told the news crew.

According to him, “We had on request by the Nigeria Customs Service officials made available full inventory of vehicles on the premises with evidence of duty payments including those assembled from knocked down components.”

He then wondered why the hue and cry about 1, 500 vehicles at a plant with combined capacity for 45,000 vehicles in one shift.

“Save for economic recession that took a toll on the vehicle market with plummeting sales and subsequent production cuts, a typical inventory of vehicles awaiting delivery should outweigh current inventory holding,” the director reasoned.

The National Automotive Council had lately said a declining Gross Domestic Product growth impacted on vehicle replacement rate, causing a corresponding decline of 37.5 percent in demand for new and used automobiles from 400,000 vehicles to 250,000 vehicles.

Meanwhile, Senator Sam Egwu – led Senate sub-committee on Industries in conjunction with Senator Barnabas Gemade had earlier in November visited the VON Automobile facility in an oversight assignment that did not cause any superficial comments, the plant director elicited.

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.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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