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Independent Marketers May Divest Fuel Retail Assets



Gas Exports Drop as Shell Declares Force Majeure
  • Independent Marketers May Divest Fuel Retail Assets

Propetrol Limited, an indigenous oil and gas company, has said there will be a lot of divestment of assets within the fuel retail market by independent players who do not have the supporting infrastructure and financial capacity to cope with the current challenges.

The Managing Director and Chief Executive Officer, Propetrol, Mr. Harry Ebohon, said foreign exchange challenge and increasing cost of financing product importation would put so much pressure on marketers’ bottom line.

He said at a press briefing in Lagos that major marketers started the trend of divestment last year when Oando sold a stake in its marketing subsidiary to the trading company, Vitol; Forte sold a part of its business to Mecuria, and Nipco acquired 60 per cent interest in Mobil Oil.

“Propetrol will be positioning to acquire any of these assets that become available in the market,” Ebohon said.

He said the company commenced operations 15 years ago by providing logistic services to downstream petroleum marketers who relied on their trucks to move products to every part of the country.

“But we decided to play a more prominent role in the industry and increase our footprints and investments across the oil and gas value chain,” he said, adding that they later went into retail marketing franchise with Oando.

He said the company invested in the maritime logistic end of the business to ensure efficiency and reliability in supply and distribution of petroleum products.

Ebohon said, “Our vessels are a key indication of tangible investment in this regard. Plans are also on the way to construct a storage facility in Port Harcourt.

“We expect to see some divestments in distribution assets this year. There are over 129 storage facilities in Nigeria today with over 70 in Lagos alone. A lot of them are presently idle and with the financial sector weakness we see in the economy, there will be pressure on some marketers to divest.”

According to him, 90 per cent of the nation’s pipelines are currently non-operational and as such the Nigerian National Petroleum Corporation should be concluding plans for the concession of these pipelines.

“Propetrol will be positioned to take advantage of these opportunities as they play out. Propetrol is also in the forefront of the companies that will move from road transportation of products to rail transportation as our rail infrastructure improves,” he said.

The Propetrol MD said growth would be achieved by entering markets with good growth curves such as the Liquefied Petroleum Gas market where consumption was expected to grow by 60 per cent to one million metric tonnes per annum.

He said, “Today, we are one of the leading indigenous players in the bunker supply sector in Nigeria, providing services to international oil companies, national oil companies, marginal field players, rigs, platforms, and dredging companies, among others.“In consolidation of our market leadership in this niche, we have entered into partnership with international companies to offer even more robust services to our customers in markets where we are not present.

Ebohon said the company would announce some partnerships in the next few weeks, adding, “We are partnering a major international player in the bunkering industry to provide the quality of products and services that the Propel brand has become known for to our international customers in markets where we are not physically present.”

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

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World Bank Lauds Kogi’s 2020 Financial Statement



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The World Bank has heaped praise on the Government of Kogi State concerning the state’s audited financial statement for 2020. The financial institution was said to have described the financial report as a standard to look up to concerning transparency and accountability in the public sector.

In a statement which was dated November 21, 2021 it was said that the bank made the commendation in a letter which was sent to the Accountant General of the state.

As said in the statement, the letter which was taken by the Kogi State Accountant General on November 2025 was signed by Deborah Hannah Isser, the Task Team Leader of the States Fiscal Transparency, Accountability and Sustainability Programme (SFTAS), Nigeria Country Office, Western and Central African Region.

SFTAS is a $750 million programme which has been set up to reward states for meeting any or every one of the indicators which demonstrate improvements in fiscal transparency, sustainability and accountability.

The indicators, which are nine in number were a byproduct of the former Fiscal Sustainability Plan of the federal government where States would be rewarded for meeting up to 22 targets.

The World Bank had previously backed the federal government to give incentives to the states in order to properly execute the 22-point Fiscal Sustainability Plan, which has now gone under a revamp as the nine Disbursement Linked Indicators under SFTAS.

Some of the criteria on which judgement will be based on are: improvement in financial reporting and budget reliability, improved cash management, increased openness, citizen participation in the budget process, reduced revenue leakages through the execution of State Treasury Single Account (TSA), a strengthened Internally Generated Revenue (IGR) collection, biometric registration and Bank Verification Number (BVN) used to reduce payroll fraud.

The World Bank commended the Kogi State government for preparing its audited financial statements in line with the basis of the International Public Sector Accounting Standards.

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Nigeria’s Rigid Forex Policy Discouraging Investors, Fueling Inflation – World Bank



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The World Bank has blamed the Central Bank of Nigeria’s rigid forex policy for the drop in Nigeria’s capital importation and rising inflation rate.

The bank disclosed in its November report, Nigeria Development Update.

Explaining modalities for its position, the World Bank stated that there had been constant pressure on the Nigerian Naira with the current forex policy, forcing the central bank to consistently increase its nominal official exchange rate in an effort to ease some of the pressure.

This, it blamed on the rigid foreign exchange management system of the Central Bank of Nigeria, saying the system has also been responsible for the rising inflation rate in Nigeria.

The report read in part, “The government’s exchange rate management policies continue to discourage investment and fuel inflation. Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market.

“Pressure on the naira remains intense, and while the CBN has raised the nominal official exchange rate three times since the start of the pandemic (by 15 per cent in March 2020, five per cent in August 2020, and seven per cent in May 2021), FX management remains too rigid to respond to external shocks. Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation.”

The World Bank further stated that the central bank foreign exchange system needs to be more flexible to withstand external shocks, especially given Nigeria’s mono-product nature. It added that the NAFEX rate does not reflect the true market rate but the central bank managed rate.

It read in part, “While the CBN supplied an average of $2.5bn to the Investors and Exporters forex window in the months just prior to the COVID-19 crisis, it only supplied an average of $0.5bn in the months thereafter.

“The NAFEX rate, which is now the guiding exchange rate for the economy, continues to be managed and is not fully reflective of market conditions. The parallel market premium over the NAFEX rate reached 29 per cent in August 2021 after the CBN cut off its weekly supply of $20,000 per bureau de change. The CBN has intermittently supplied forex to BDCs since 2005, providing ample opportunities for currency round-tripping.”

The institution however advised that Nigeria adopt a more predictable, transparent and flexible foreign exchange management system in order to attract and sustain private investment flows.

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Nigeria’s Non-oil Revenue Now N1.15 Trillion – Minister of Finance



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Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, has said that Nigeria’s non-oil revenue is now N1.15 trillion, representing 15.7 percent above the country’s target. This, she claimed, was a result of the federal government’s efforts at diversifying the nation’s economy.

Mrs. Ahmed disclosed this at the Institute of Directors (IoD) 2021 Annual Directors Conference which was held on Wednesday in Abuja.

According to the News Agency of Nigeria (NAN) the event with the theme: “Creating the Future: Deepening the Corporate Governance Practice through Multi-Sectoral and Multi-Generational Collaborations,” was meant to discuss economic development.

Mrs Ahmed added that the recent development was in line with President’s commitment to further diversifying the Nigerian economy which is heavily dependent on oil. She observed that Nigeria was showing resilience in recovery from recession from coronavirus (COVID-19) pandemic which intensely affected global economies.

The minister said the federal government alongside the private sector had implemented a wide range of monetary measures to stimulate economic recovery, growth and development, job creation and improved standards of living.

She also explained that the government was doing everything to improve and diversify Nigeria’s revenue generation.

Nigeria was quickly able to exit recession and is on her way to path of sustainable growth and we are intensifying efforts to grow and diversify our revenue sources to grow revenue from the current 8 per cent.”

“Our non-oil revenues have grown to N1.15 trillion, representing 15.7 per cent above set target. We are working on the 2021 finance bill and it’s nearing completion. Also, the recent approval of the medium-term national development plan is an important milestone of Buhari’s commitment to delivering sustainable growth and we require strong support and monitoring during implementation,” she said.

Mrs Ahmed reinforced the government’s decision to do something about infrastructure and reduce the cost of production for businesses in the country.

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