- Freighting of Cargoes Rises by 10%, Says NAHCO Chief
Freighting of agricultural and perishable cargoes and other non-consumable products at the nation’s international airports has increased by 10 per cent, Nigerian Aviation Handling Company (NAHCO) Chief Commercial Officer Seyi Adewale has said.
He said the air freight of such cargoes increased from about two per cent to 12.5 per cent in the last few years due to the export promotion policy.
He listed the perishable cargoes to include tomatoes, vegetable and yams.Other non-consumable cargoes include native fabrics, hair extension and donkey skins.
Adewale said the rise in cargo export to the United States, European, Asian,Middle East and African countries in the last few years has forced the cargo handling company to upgrade the security and safety standards of its cargo warehouse.
In an interview in Lagos, Adewale said the firm has stepped up the level of security and safety of its facilities because airlines that ferry air cargo are concerned about the level of compliance of air cargo in line with prescribed global standards.
He said: “Perishables cargo export has grown from as low as two per cent to about 12 per cent in the last few years, representing over 10 per cent increase. Since we handle about 80 per cent of the cargo in and out of the country, this for us is large.”
According to him, most of the shipments go to the US, which constitutes the highest percentage for export.
Giving a breakdown, he said 38 per cent of exports coming through his company’s warehouse goes to US, while 34 per cent go to Europe, which includes the United Kingdom.
Also, while 15 per cent of the cargo go to Africa, nine per cent go to Asia, leaving only two per cent to the Middle East.
Adewale added that perishables like tomatoes, fruit and vegetables amongst others have grown and are still growing.
“People are now exporting yams. They also export dry fish and general goods such as non-consumables like cloths, native fabrics, hair extensions and donkey skins,” he said.
Besides stepping up security and safety of its facilities, Adewale said NAHCO was subjected to a twice- monthly technical audit by International Civil Aviation Organisation (ICAO), United States Federal Aviation Administration (FAA) and the Nigerian Civil Aviation Authority (NCAA).
The audit by the three bodies , he said, was to ensure that any cargo that goes into any aircraft was safe, not harmful and illegal.
Adewale said: “One of the challenges of exportation in Nigeria is the requirements for us to maintain a world class export warehouse.
“We have two X-ray machines. To service these machines on a quarterly basis cost millions of naira and that is if there are no major repairs to be carried out.
“Airlines are more concerned about exports because whatever they are going to put on their aircraft must be right in terms of safety and security. Airlines are conscious about the export facilities, export processes and security.”
According to him, this puts the company on the edge, with at least, two audits monthly by ICAO and other relevant agencies.
He said another challenge is that because the business is growing and the company need to expand, the little money it makes is ploughed back into the business.
“We recently extended our acceptance section to another product packaging section so that we decongest the export warehouse because of the capacity,” Adewale added.
Egbin Decries N388B NBET Debt, Idle Capacity
Egbin Power Plc, the biggest power station in Nigeria, has said it is owed N388bn by the Nigerian Bulk Electricity Trading Plc for electricity generated and fed into the national grid.
The company disclosed this on Tuesday during an oversight visit by the Senate Committee on Privatisation, led by its Chairman, Senator Theodore Orji, to the power station, located in Ikorodu, Lagos.
The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells it to the distribution companies, which then supply it to the consumers.
The Group Managing Director, Sahara Power Group, Mr. Kola Adesina, told the lawmakers that the total amount owed to Egbin by NBET included money for actual energy wheeled out, interest for late payments and available capacity payments.
Egbin is one of the operating entities of Sahara Power Group, which is an affiliate of Sahara Group. The plant has an installed capacity of 1,320MW consisting of six turbines of 220 megawatts each.
The company said from 2020 till date, the plant had been unable to utilize 175MW of its available capacity due to gas and transmission constraints.
Adesina said, “At the time when we took over this asset, we were generating averagely 400MW of electricity; today, we are averaging about 800MW. At a point in time, we went as high as 1,100MW. Invariably, this is an asset of strategic importance to Nigeria.
“The plant needs to be nurtured and maintained. If you don’t give this plant gas, there won’t be electricity. Gas is not within our control.
“Our availability is limited to the regularity of gas that we receive. The more irregular the gas supply, the less likely there will be electricity.”
He noted that if the power generated at the station was not evacuated by the Transmission Company of Nigeria, it would be useless.
Adesina said, “Unfortunately, as of today, technology has not allowed the power of this size to be stored; so, we can’t keep it anywhere.
“So, invariably, we will have to switch off the plant, and when we switch off the plant, we have to pay our workers irrespective of whether there is gas or transmission.
“Sadly, the plant is aging. So, this plant requires more nurturing and maintenance for it to remain readily available for Nigerians.
“Now, where you have exchange rate move from N157/$1 during acquisition in 2013 to N502-N505/$1 in 2021, and the revenue profile is not in any way commensurate to that significant change, then we have a very serious problem.”
He said at the meeting of the Association of Power Generation Companies on Monday, members raised concern about the debts owed to them.
He added, “All the owners were there, and the concern that was expressed was that this money that is being owed, when are we going to get paid?
“The longer it takes us to be paid, the more detrimental to the health and wellbeing our machines and more importantly, to our staff.”
Adesina lamented that the country’s power generation had been hovering around 4,000MW in recent years.
Oil Rises on U.S. Fuel Drawdowns Despite Surging Coronavirus Cases
Oil prices climbed on Wednesday after industry data showed U.S. crude and product inventories fell more sharply than expected last week, reinforcing expectations that demand will outstrip supply growth even amid a surge in Covid-19 cases.
U.S. West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.7%, to $72.13 a barrel, reversing Tuesday’s 0.4% decline.
Brent crude futures rose 34 cents, or 0.5%, to $74.82 a barrel, after shedding 2 cents on Tuesday in the first decline in six days.
Data from the American Petroleum Institute industry group showed U.S. crude stocks fell by 4.7 million barrels for the week ended July 23, gasoline inventories dropped by 6.2 million barrels and distillate stocks were down 1.9 million barrels, according to two market sources, who spoke on condition of anonymity.
That compared with analysts’ expectations for a 2.9 million fall in crude stocks, following a surprise rise in crude inventories the previous week in what was the first increase since May.
Traders are awaiting data from the U.S. Energy Information Administration (EIA) on Wednesday to confirm the drop in stocks.
“Most energy traders were unfazed by last week’s build, so expectations should be high for the EIA crude oil inventory data to confirm inventories resumed their declining trend,” OANDA analyst Edward Moya said in a research note.
On gasoline stocks, analysts had expected a 900,000 barrel decline drop in the week to July 23.
“The U.S. is still in peak driving season and everyone is trying to make the most of this summer,” Moya said.
Fuel demand expectations are undented by soaring cases of the highly infectious delta variant of the coronavirus in the United States, where the seven-day average for new cases has risen to 57,126. That is about a quarter of the pandemic peak.
Oil Price Rises To $74.70 Despite Delta Variant
Oil price inched higher on Tuesday despite the fast spreading COVID-19 Delta variant. Brent crude oil, against which Nigerian oil is priced gained, $0.20 or 0.27 percent to $74.70 per barrel on Tuesday at 12:05 am Nigerian time.
Delta variant is spreading in China, the world’s largest importer of crude oil, forcing crude oil investors to start cutting down on their oil demand projections.
“The Delta variant is still spreading and China has started to clamp down on teapots, so their import growth would not be that much,” said Avtar Sandu, a senior commodities manager at Singapore’s Phillips Futures, referring to independent refiners.
Strong U.S. demand and expectations of tight supplies have helped crude oil to recover from a 7 percent slump recorded last Monday to mark their first gains in two to three weeks last week.
Global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, to raise production through the rest of the year.
“There is seemingly a battle within the energy complex between the prevailing supply deficit engineered by OPEC+ and the threat of the COVID-19 Delta variant in regions with low vaccination rates,” said StoneX analyst Kevin Solomon.
“The slow take-up of vaccinations will continue to limit some upside in oil demand in those regions, and there will be intermittent spells in the recovery in the coming months.”
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