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Warri, Kaduna Refineries Record zero Production

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refineries
  • Warri, Kaduna Refineries Record zero Production

Two out of Nigeria’s three refineries were completely dormant in November 2016 as they could not refine a drop of crude oil throughout the period.

Aside from the Port Harcourt Refining Company in Rivers State, which recorded a capacity utilisation of 27.09 per cent, the other two refineries, Warri Refining and Petrochemical Company in Delta State and Kaduna Refining and Petrochemical Company in Kaduna State, posted zero capacity utilisation in November last year.

The latest oil and gas report from the Nigerian National Petroleum Corporation showed that the WRPC and the KRPC failed to sustain the capacity utilisation that they recorded in the previous month.

An analysis of the report showed that the WRPC and the KRPC had posted 30.86 per cent and 12.88 per cent as their respective capacity utilisation in October 2016.

While the figures dropped to zero in November, the PHRC was able to increase its capacity utilisation from 24.74 per cent in October to 27.09 per cent in the month under review.

The report indicated that the plant capacities of the WRPC, PHRC and KRPC were 125,000 barrels per day, 210,000bpd, and 110,000bpd, respectively.

Their consolidated plant capacity was put at 445,000bpd, while their consolidated capacity utilisation for November 2016 was 12.78 per cent.

The national oil firm said pipeline vandalism in the Niger Delta and the facilities being revamped were reasons for the abysmal performance of the refineries in November.

It said, “Total crude processed by the three local refineries, the KRPC, PHRC and WRPC, for the month of November 2016 was 232,768 metric tonnes, translating into a combined yield efficiency of 87.08 per cent compared to crude processed in October 2016 that was 442,693MT, translating into a combined yield efficiency of 88.03 per cent.

“For the month of November 2016, the three refineries produced 178,107MT of finished petroleum products and 24,599MT of intermediate products out of 232,768MT of crude processed at a combined capacity utilisation of 12.78 per cent, compared to 23.53 per cent combined capacity utilisation achieved in the month of October 2016.”

It added, “The adverse performance was due to crude pipeline vandalism in the Niger Delta region coupled with ongoing refineries revamp. However, the three refineries continue to operate at minimal capacity, only the PHRC processed crude during the month.”

Following the refineries’ inability to refine crude into petroleum products for local consumption, the national oil firm has to continue with its direct-sale-direct-purchase practice with foreign refiners.

The report stated that in November last year, 1,003.28 million litres of white products were supplied to the country through the DSDP arrangement while 802.75 million litres were supplied in October 2016.

It specifically stated that only Premium Motor Spirit, popularly called petrol, was supplied through the DSDP in both October and November 2016.

The report indicated that petrol and kerosene from the domestic refineries in November 2016 amounted to 191.75 million litres, compared to 210 million litres in the previous month.

Billions of naira had been spent on revamping Nigerian refineries without commensurate results over the years.

But in December last year, the Federal Government declared that it would not spend any more money on the facilities, stressing that it would rather favour private sector investment and subsequent joint ownership and management of the plants for greater efficiency.

The Minister of State for Petroleum Resources, Ibe Kachikwu, stated in Abuja that the government was working hard to bring in private investment capital to strengthen the plants in order to boost the nation’s local refining capacity.

“Government’s money will not be committed to the refineries anymore,” Kachikwu had said.

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.

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Economy

Ogun Records N13.3B Internally Generated Revenue Monthly in Q1 of 2021

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Revenue - Investors King

Ogun State Government has recorded an average of N13.3billion monthly as Internally Generated Revenue (IGR) in the first quarter of 2021.

The government said it is also planning to raise its yearly Gross Domestic Product (GDP) rate from the current single digit by 25 percent.

The Commissioner for Finance, Dapo Okubadejo disclosed this to newsmen in Abeokuta ahead of the state’s investment summit tagged: ‘OgunIseya21: Becoming Africa’s Model Industrial and Logistics Hub’, slated for July 13th-14th, 2021.

Okubadejo who doubles as the State’s Chief Economic Adviser noted that the state’s IGR had experienced an upward movement after last year’s shortfall due to the Covid-19 pandemic and the attendant lockdown.

“We had a significant turnaround in the first quarter of this year. In fact, as of April, we have done almost N40bn in the Internally Generated Revenue. Our target this year is to exceed all the previous records we have set in IGR. That’s why we have put in place, all these transformation initiatives, friendly policies and also facilitate this investment summit to further showcase Ogun State as the preferred industrial destination,” he said.

The Finance Commissioner was supported in highlighting the investment potentials of the summit by his counterparts from the Ministries of Industry, Trade and Investment, Mrs. Kikelomo Longe; Works and Infrastructure, Ade Adesanya; Culture and Tourism, Toyin Taiwo; Budget and Planning, Olaolu Olabimtan and the Director-General, Public-Private Partnership, Dapo Oduwole.

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Unemployment To Push More Nigerians Into Poverty – NESG

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Nigerian Economic Summit Group- Investors King

On Friday, The Nigerian Economic Summit Group said that many more Nigerians are expected to fall into the poverty trap amid rising unemployment in the country.

The NESG, a private sector-led think-tank, noted in its economic report for the first quarter of 2021 that the country’s economic growth in the period under review was relatively weak.

It said, “Nigeria’s economic growth trajectory is better described as jobless and less inclusive even in the heydays of high growth regime in the 2000s.

“While the Nigerian economy recovered from the recession in Q4 of 2020, the unemployment rate spiked to its highest level ever at 33.3 percent in the same quarter.

“With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward.”

The group noted that the World Bank estimated an increase in the number of poor Nigerians to 90 million in 2020 from 83 million in 2019.

“This corresponds to a rise in headcount poverty ratio to 44.1 percent in 2020 from 40.1 percent in 2019. The rising levels of unemployment and poverty are reflected in the persistent insecurity and social vices, with attendant huge economic costs,” it said.

According to the report, huge dependence on proceeds from crude oil, leaving other revenue sources unexplored, indicates that Nigeria is not set to rein in debt accumulation in the short to medium term.

The NESG noted that public debt stock continued to trend upwards, with a jump from N7.6tn ($48.7bn) in 2012 to N32.9tn ($86.8bn) in 2020.

It said public debts grew by 20 percent between 2019 and 2020, adding, “This is partly due to the need for emergency funds to combat the global pandemic and alleviate its adverse economic impacts on households and businesses.”

According to the group, Nigeria needs more than an economic rebound, and there is a need to improve growth inclusiveness.

It said, “Nigeria has struggled to achieve inclusive growth for many decades. Since recovery from the 2016 recession, the economy has been on a fragile growth path until it slipped into another recession in 2020 due to the COVID-19 pandemic.

“This suggests that the country needs to attain high and sustainable economic growth to become strong and resilient.

“The relationship between economic growth and unemployment rate in Nigeria suggests that economic growth has not led to a reduction in the unemployment rate – jobless growth.”

The NESG said to reverse this recurring trend, there was an urgent need for collaborative efforts between the government and relevant stakeholders towards addressing the constraints to value chain development in high-growth and employment-elastic sectors, including manufacturing, construction, trade, education, health and professional services, with ICT and renewable energy sectors as growth enablers.

It noted that despite the re-opening of the land borders that the Nigerian government shut since October 2019, inflation reached a four-year high of 18.1 percent in April 2021.

“While we expect improved agricultural production in coming months to partially ease inflationary pressures, this positive impact could be suppressed by recurring key structural bottlenecks including insecurity in the food-producing regions, electricity tariff hike, fuel price increase and hike in transport and logistic costs,” it added.

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IMF Queries FG Strategies On Fuel Subsidy, Unemployment, Inflation

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IMF - Investors King

The International Monetary Fund has raised the red flag over Nigeria’s resumption of petrol subsidy payments, describing it as injurious to the economy.

It also reiterated the importance of introducing a market-based fuel pricing mechanism and deployment of well-targeted social safety nets to cushion any adverse impact on the poor.

In a report produced after a virtual meeting with Nigerian authorities from June 1 to 8, the IMF also expressed concerns over the rising unemployment and inflation rates, even as it admitted that real Gross Domestic Product was recovering.

The IMF team, led by Jesmin Rahman, further hailed the Central Bank of Nigeria for its efforts at unifying the exchange rate by embracing needed reforms.

The Fund said: “Recent exchange rate measures are encouraging, and further reforms are needed to achieve a fully unified and market-clearing exchange rate.

“The resurfacing of fuel subsidies is concerning, particularly in the context of low revenue mobilisation.

“The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 global pandemic. Following sharp output contractions in the second and third quarters, GDP growth turned positive in Q4 2020 and growth reached 0.5 percent (y/y) in Q1 2021, supported by agriculture and services sectors.

“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 percent, owing to high food price inflation. With the recovery in oil prices and remittance flows, the strong pressures on the balance of payments have somewhat abated, although imports are rebounding faster than exports and foreign investor appetite remains subdued resulting in continued FX shortage.

“The incipient recovery in economic activity is projected to take root and broaden among sectors, with GDP growth expected to reach 2.5 percent in 2021. Inflation is expected to remain elevated in 2021, but likely to decelerate in the second half of the year to reach about 15.5 percent, following the removal of border controls and the elimination of base effects from elevated food price levels.”

The IMF also recognised that tax revenue collections were gradually recovering but noted that with fuel subsidies resurfacing, additional spending for COVID-19 vaccines and to address security challenges, the fiscal deficit of the Consolidated Government is expected to remain elevated at 5.5 percent of GDP.

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