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Nigeria to Lose $68m to Saudi Arabian Airlines for 2017 Hajj Exercise

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Emirates Airlines
  • Nigeria to Lose $68m to Saudi Arabian Airlines for 2017 Hajj Exercise

Nigeria risks loosing $68million to the Kingdom of Saudi Arabia during the forthcoming 2017 hajj, following the allocation of 45 percent of the total pilgrims to a Saudi Arabia-based airline, FlyNas, by National Hajj Commission (NAHCON).

Already, local stakeholders in the sector have raised eyebrow as they described the move as a “rip off that has the capacity to stunt growth in Nigeria airline industry.”

A source also said that already “Airline business is mega box conducted in dollars and 45 per cent simply translated to a big minus to Nigeria because the country will lose so much money.”

In total, 95,000 Nigerian would be performing the 2017 hajj that attracted the lowest fee of N1,500,000 covering flight ticket, royalty, accommodation, intra and inter city travels and host of others.

Investigation revealed that NAHCON’s decision to engaged the services a Saudi Arabia-based airline Fly Nas for 2017 hajj was a lopsided policy that has further worsen unfavorable trade balance with the Saudis.

Commenting further on the implications of such policy, the aviation source said: “Instead of encouraging our indigenous airliners, NAHCON has ended up sending them away from the business circle in favour of a foreign airline. It is high time for the federal government to come to the aide of indigenous airliners before it is too late.”

But NAHCON Chief Media Relation Officer, Alhaji Adamu Hassan Abdullahi, in a telephone chat, confirmed the allocation of 45 per cent of total number of Nigerian pilgrims to Flynas, saying “it was a policy introduced by Saudi authority.”

He dismissed the anticipatory loss as ruse, stressing that “Nigeria is not going to lose $68million as claimed by the service providers.”

Similarly, there had been groundswell of protest across the 36 states pilgrims welfare boards over what they called “unilateral decision of NAHCON to impose carrier on them contrary to what was obtained in the past.

It was also learnt that in recent meeting held at Saudi Arabia by top Nigerian pilgrimage officials, they agreed among other things to fought and exert their independence and block overbearing influence of the regulatory agency.

the source said the process was still one but from the look of things, NAHCON would not do justice to the state pilgrims’ boards, as according to him if care is not taken, the commission will just allocate airlines to states without consulting the states as it does last year.

When contacted, the National Hajj Commission Chief Media Relation Officer, Alhaji Adamu Hassan Abdullahi in a telephone chat noted that the Hajj regulatory agency was not blame for the policy.

“the Saudi Authority imposed Flynas on countries participating in hajj operation, and according to the policy each country must allocate 50 per cent of its total pilgrims to Flynas.”

Speaking further, “NAHCON chairman insisted that it should not be 50/50 and because of the good relationship between Nigeria and Saudi, we are allowed to allocate 45 per cent instead of 50 per cent.”

He said “unlike Nigeria, Niger Republic and Senegal had to allocate all their pilgrims to Flynas because Kabo air that usually operates in the two countries was denied a chance for being a foreign airline, and to be honest with you, Nigeria is not going to lose $68million as claimed by the service providers”.

Consequently, NAHCON image Maker advised the service providers to blame Saudi Authorities and not the Hajj regulatory agency.

He said instead, NAHCON is fighting for Nigerian businessmen, as according to him the commission is in discussion with the Saudi Chamber of Commerce to see how Nigerian businessmen can import goods to Saudi during hajj.

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 Posts 2% Gain for the Week Despite India Virus Surge

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Oil prices steadied on Friday and were set for a weekly gain against the backdrop of optimism over a global economic recovery, though the COVID-19 crisis in India capped prices.

Brent crude futures settled 0.28% higher at $68.28 per barrel and U.S. West Texas Intermediate (WTI) crude advanced 0.29% to $64.90 per barrel.

Both Brent and WTI are on track for second consecutive weekly gains as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand.

In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity.

However, crude imports by the world’s biggest buyer fell 0.2% in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day (bpd), the lowest since December.

In the United States, the world’s largest oil consumer, jobless claims have dropped, signalling the labour market recovery has entered a new phase as the economy recovers.

The recovery in oil demand, however, has been uneven as surging COVID-19 cases in India reduce fuel consumption in the world’s third-largest oil importer and consumer.

“Brent came within a whisker of breaking past $70 a barrel this week but failed at the final hurdle as demand uncertainty dragged on prices,” said Stephen Brennock at oil brokerage PVM.

The resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of the lost demand has been offset by countries such as China, where recent Labour Day holiday travel surpassed 2019 levels.

“Gasoline demand in the U.S. and parts of Europe is faring relatively well,” FGE said.

“Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season.”

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Commodities

Lagos Commodities and Futures Exchange to Commence Gold Trading

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With the admission of Dukia Gold’s diversified financial instruments backed by gold as the underlying asset, Lagos Commodities and Futures Exchange is set to commence gold trading.

According to Dukia Gold, the instruments will be in form of exchange-traded notes, commercial papers and other gold-backed securities, adding that it will enable the company to deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the Nigerian government to better diversify foreign reserves and create jobs across the metal production value chain.

Tunde Fagbemi, the Chairman, Dukia Gold, disclosed this while addressing journalists at Pre-Listing Media Interactive Session in Lagos on Thursday.

He said, “We are proud to be the first gold company whose products would be listed on the Lagos Futures and Commodities Exchange. The listing shall enable us facilitate our infrastructure development, expand capacity and create fungible products.

“This has potential to shore up Nigeria’s foreign reserve and create an alternative window for preservation of pension funds. A gold-backed security is a hedge against inflation and convenient preservation of capital.”

“As a global player, we comply with the practices and procedures of London Bullion Market Association and many other international bodies. Our refinery will also have multiplier effects on the development of rural areas anywhere it is located,” he added.

Mr Olusegun Akanji, the Divisional Head, Strategy and Business Solutions, Heritage Bank, said the lender had created a buying centre for verification of quality and quantity of gold and reference price to ensure price discovery in line with the global standard.

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Crude Oil

Oil Nears $70 as Easing Western Lockdowns Boost Summer Demand Outlook

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Oil prices rose for a third day on Wednesday as easing of lockdowns in the United States and parts of Europe heralded a boost in fuel demand in summer season and offset concerns about the rise of COVID-19 infections in India and Japan.

Brent crude rose 93 cents, or 1.4%, to $69.81 a barrel at 1008 GMT. U.S. West Texas Intermediate (WTI) crude rose 85 cents, or 1.3%, to $66.54 a barrel.

Both contracts hit the highest level since mid-March in intra-day trade.

“A return to $70 oil is edging closer to becoming reality,” said Stephen Brennock of oil broker PVM.

“The jump in oil prices came amid expectations of strong demand as western economies reopen. Indeed, anticipation of a pick-up in fuel and energy usage in the United States and Europe over the summer months is running high,” he said.

Crude prices were also supported by a large fall in U.S. inventories.

The American Petroleum Institute (API) industry group reported crude stockpiles fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts polled by Reuters. Gasoline stockpiles fell by 5.3 million barrels.

Traders are awaiting data from the U.S. Energy Information Administration due at 10:30 a.m. EDT (1430 GMT) on Wednesday to see if official data shows such a large fall.

“If confirmed by the EIA, that would mark the largest weekly fall in the official data since late January,” Commonwealth Bank analyst Vivek Dhar said in a note.

The rise in oil prices to nearly two-month highs has been supported by COVID-19 vaccine rollouts in the United States and Europe.

Euro zone business activity accelerated last month as the bloc’s dominant services industry shrugged off renewed lockdowns and returned to growth.

“The partial lifting of mobility restrictions, the expectation that tourism will return in the near future, and the lure of the psychologically important $70 mark are all likely to have contributed to the price rise,” Commerzbank analyst Eugen Weinberg said.

This has offset a drop in fuel demand in India, the world’s third-largest oil consumer, which is battling a surge in COVID-19 infections.

“However, if we were to eventually see a national lockdown imposed, this would likely hit sentiment,” ING Economics analysts said of the situation in India.

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